What’s the ROI of a Happy Company Culture?


Employees want to work in the right culture, but how does one gauge the value of a happy and healthy company culture? It can be difficult to accomplish, and often requires HR to present upper management with ways to calculate a culture’s value and suggestions on how to maximize that value.

Creating and maintaining a culture that values employee happiness will positively impact a company’s bottom line, drive productivity, acquisition and hiring decisions and even influence whether employees behave in ethical ways.

We’ll first discuss how culture is company-dependent. There is no one-size-fits-all approach to developing or improving it. We’ll then discuss how you can calculate the value of that culture and ways to make sweeping changes to your work environment, if necessary.

No two companies are the same
A young, evolving technology startup that employs recent graduates may find better value in purchasing a pool table and cold brew coffee than an established corporation that mainly hires Gen Xers and Baby Boomers. Understanding workplace dynamics is one of the first steps in grasping how a company’s culture impacts its key performance indicators (KPIs).

Leaders have organizational culture on their mind, and believe it’s linked to a company’s success.

Research indicates culture does impact employee performance
Lindsay McGregor and Neel Doshi of Harvard Business Review attended a strategy meeting with countless leaders of Fortune 500 companies. They interestingly noted that by the end of the 90-minute meeting, they heard the word “culture” 27 times. This indicates one thing – leaders have organizational culture on their mind and believe it’s linked to a company’s success. Yet, they may not know how to develop, maintain or change a company’s culture. This results in many executives being passive co-conspirators in the formation of their company’s culture for the better or worse.

Shawn Achor, a leading researcher of employee happiness, states that “a decade of research proves that happiness raises nearly every business and educational outcome: raising sales by 37 percent, productivity by 31 percent, and accuracy on tasks by 19 percent, as well as a myriad of health and quality of life improvements.”

Calculating the value of culture
Here’s the million dollar question: What is your company’s culture worth?

There may be numerous ways to calculate culture, but we found a cool, easy way to do so with McGregor and Doshi’s six-question scaled survey and mathematical system. This process can calculate how motivated employees are at work by using simple math.

As an example, McGregor and Doshi used their system to measure the total motivation of different airline carriers’ employees, assuming the companies all portrayed similar characteristics or offered similar services (same plans, same terminals, to name a few). What they found was Southwest’s total motivation was significantly higher than United’s.

If you were a leader in United, this could act as solid evidence to take steps to make internal improvements.

How to develop a happy company culture
It doesn’t happen overnight. It takes dedication and focus on the part of HR, a company’s C-Suite and managers – really all employees. Take these five steps:

  1. Define or clarify your company’s core values. Set transparent expectations for employees by offering clear definitions of these values. Communicate the values company-wide and frequently.
  2. Determine how to recognize if employee happiness issues exist. One way is to conduct regular engagement or eNPS surveys. Listen to what employees really value and want to see change or expanded.
  3. Study this data and identify how to make the company culture more positive, representative of the company’s core values and employees happier.
  4. Make changes and regularly report to all employees how things are going. Be transparent if there are obstacles, but make your positive intentions clear.
  5. Once changes are implemented, which may include putting in place a rewards and recognition and/or perks program, measure its impact by comparing it to previously accrued statistics. Tie these stats to the company’s KPIs (like employee retention, absenteeism, engagement) and this will help you determine your progress.

Want to learn more about how to build a company culture driven by employee happiness? Download our free ebook, Employee Happiness 101. Or request a demo of Fond’s Perks and Rewards platform, now!

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