How to Reduce Turnover by Assessing Cultural Fit
In Part I and Part II of this “Why Job Fit Matters” series, I discussed why both employees and employers need to care about fit. In Part III, I outlined how employers can measure and determine an employee’s fit with the job. Today, I’ll explain how to reduce turnover by assessing an employee’s cultural fit.
First: what is cultural fit? In the context of the workplace, we are generally referring to person-organization fit: the compatibility between a person’s personality and values and an organization’s culture (Kristof-Brown, Zimmerman, & Johnson, 2005).
A common misunderstanding of company culture is equating it to perks. This has meant that companies will often try to resolve a dysfunctional culture by adding perks and are then left wondering why their employees are still unhappy. Although perks are often indicative of culture, they’re not the entire story.
So if it’s not perks, what exactly is culture?
Culture has been defined in various ways. A common definition of culture is a set of shared beliefs including values, norms, and patterns of behavior (Rousseau, 1990). A similar definition is the “shared perception of daily practices” including customs, habits, and traditions based on the values of company founders and leaders (Hofstede, Neuijen, Ohayv, & Sanders, 1990).
In general, culture can be summed up as an organization’s shared values as manifested in its behavioral practices.
Paying attention to fit based on values is crucial when you consider surveys reveal that 67% of employees believe “it is very important or essential to my ideal job” that their employer has similar values.
Let’s take a closer look at what these values and behaviors entail.
A seminal study on culture was conducted by Professors O’Reilly, Chatman, and Caldwell in 1991. They found that organizational culture can be categorized along seven factors:
- Innovation (e.g., experimentation, risk taking)
- Stability (e.g., rule oriented, predictable)
- Respect for People (e.g., fairness, tolerance)
- Outcome Orientation (e.g., achievement focused, high expectations)
- Attention to Detail (analytical, precise)
- Team Orientation (e.g., collaborative, people oriented)
- Aggressiveness (e.g., competitive)
Their key findings were that the fit between an employee’s values and the organization’s values predicted attitudes such as higher job satisfaction and higher organizational commitment and behavior such as lower turnover.
The practical takeaway?
Ensuring a mutually good fit involves a comprehensive analysis of your company’s values and behavioral practices (not just the perks) and then accurate measurement of both the existing employees’ values and job candidates’ values.
Start with an assessment of your core values and then specify what that value looks like in practice. For example, the value “respect for people” can mean minimizing interpersonal conflict at one company and challenging each others’ ideas at another.
Research and popular opinion converge on the importance of mutual fit in hiring decisions.
The bottom line?
Fit matters because when there isn’t a good one, employees will go elsewhere until they find it.
This is Part IV of a four-part series on “Why Job Fit Matters.”
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