In recent years, companies of all sizes have come to realize that having a codified set of core values for employees to know and live up to makes a lot of business sense. Having an explicit set of values helps employees find clarity in ambiguous situations and serves as a guide for how to behave with colleagues and customers. Well-crafted corporate values that are widely adopted have the power to unite employees and define the corporate brand.
There is a growing body of research that shows that value-driven companies who “walk the talk” enjoy better brand and business performance as well as public admiration. Companies like Zappos, Apple and AirBnb serve as clear examples of how corporate values impact most every aspect of a company’s offering; from product, to marketing to customer service to financial management.
In fact, the correlation between corporate values and performance is so strong that nearly 90% of American companies report that they have a set of clearly defined corporate values. This is corroborated by Fond’s own survey data which indicates that 92% of responders’ companies have a core values statement (see below). So why don’t we declare victory and move on to the next topic?
Alas, having corporate values and knowing corporate values (let alone living up to them) are entirely different things. In a poll conducted during Fond’s recent webinar on employee engagement best practices, nearly 100 responding HR professionals put a spotlight on this important distinction.
The question posed to this group was, “What percentage of your employees can recite all of your company’s core values?”. The answers are rather eye-opening:
Only 22% responded that 60% or more of their employees know their company’s core values. Half of that number (11%) could say that 80% of their employees know all the core values. Let that sink in for a moment: Only about 1 in 10 HR leaders believe that 80% or more of their employees are able to recite core values. At the other end of the scale, 54% of responders believed that between 0 and 40% of their employees knew their company’s core values with 29% of them in the 0 – 20% likelihood range.
This finding shows that most American companies have done only half the job. They were successful at distilling their values into a set of tangible ideas and that is certainly an accomplishment. It might be tempting to think that the absence of employee awareness can be traced to a communications problem. That should be easy to solve; add more posters to common areas, reference corporate values at company meetings, cite values in internal corporate communications. Why not ask the CEO or CHRO to send another memo on the topic? How hard should it be to place this content in front of a captive audience?
American business has largely not achieved its goals in this area because it’s not just about creating and communicating corporate values. In reality, success is all about having employees internalize and live these values. The task is to transform abstract ideas into daily behaviors and that is accomplished through recognition and reinforcement of desired behaviors, not solely by reading or gaining factual knowledge. That’s where modern reward and recognition systems step in to fill the gap.
With these systems, managers and employees are asked to “catch” employees doing the right things and publicly recognize and reward those achievements. This is a very effective way to educate employees on core values and demonstrate with great specificity what that means on a day-to-day basis. It’s also a way to show that the company really values those behaviors inasmuch as the recipient can earn a monetary reward (a token or a substantial amount) but more importantly gain public acknowledgement and appreciation for their actions. This not only drives the message home for the employee receiving the recognition, it serves as a positive example to all other employees and a reinforcing learning event. In 2016, Gallup reported that just 23% of U.S. employees strongly agree that they can apply their organization’s values to their work every day, and only 27% strongly agree that they “believe in” their organization’s values. That’s why customizing your recognition system around your corporate values is a key way to transition your employees from theory to practice.
Changing human behavior is never a minor undertaking, and that is the underlying challenge when we ask employees to act a certain way at work. It takes a concerted effort to drive any behavioral change and achieving meaningful adoption of your corporate values is no exception. But the prize is huge; highly engaged employees who exemplify corporate values outperform their less engaged peers on nearly every productivity and retention measure. Employee engagement is a big driver of corporate performance and constitutes a competitive advantage as real as any product feature, brand image or other “traditional” advantages a company may enjoy. Instituting a system that communicates, reinforces and celebrates the right behaviors differentiates the companies who see employee engagement as a strategic imperative – not just another program from HR. Short of that, you could always put up a few more core values posters in the lunchroom.
This article was authored by Marc Barach, VP of Marketing at Fond.