Clear and well-defined company values can help your employees work towards a common goal, support your company's vision and shape its culture. Getting them wrong can negatively impact employee morale and your business as a result.
We've helped global companies retain their top talent and keep their employees engaged through reward and recognition programs since 2001.
In this article, we'll draw on our 20 years of experience to explore the relevance and effect of company values on employee engagement, how to use them effectively to improve employee performance and how to promote them for maximum impact.
What are Company Values?
A definition of company values are that they are the guiding principles, fundamental beliefs and philosophies of your organisation. They define what your company stands for (and sometimes what they don't). They act as a guide for your employees to achieve a common goal and shape your company culture.
According to Harvard Business Review, there are four types of company values.
- Core values - the deeply ingrained principles that guide all of a company's actions.
- Aspirational values - those that a company needs to succeed in the future but currently lacks.
- Permission-to-play values - those that reflect the minimum behavioural and social standards required of any employee.
- Accidental values - those that arise without being cultivated by leadership and take hold over time.
In our experience, we'd advise caution or even avoid Permission-to-play values altogether. If you want engaged employees, you should aim much higher than the bare minimum (as should your team). The core values of your company are the most important and should be the aim of your focus.
In some cases, people even refer to company values as core values. Aspirational and accidental values can be suitable in some cases, but these can be difficult to embed into your culture. By focusing on your core values, you can focus on your company right now and make these realistic and actionable for your team.
Examples of Company Values
Company values don't have to be unique or complex. If you think of some of the worlds leading organisations, chances are they'll share some similar values (e.g. Customer focus).
Often a simple noun can provide the most clarity and be the most effective, as shown below by these company values examples below:
- Customer Success
- Inclusion and Diversity
- Supplier Responsibility
- Diversity and inclusion
- Corporate social responsibility
- Trustworthy Computing
Why are Company Values Important?
Nearly every successful organisation has clearly defined company values that are shared and actioned by their teams. Many studies have shown companies with strong company values have better customer and employee satisfaction rates and perform better financially.
By clearly stating what your organisation stands for, you enable your staff and prospective employees a better understanding of the vision and ethos of the company, making the company a more attractive brand to customers and suitable candidates with shared values.
Promoting these behaviours can help create an enjoyable environment and drive motivation and engagement.
How Company Values Impact Employee Engagement
Engagement is an indicator of how committed, focused and enthusiastic employees are.
Disengaged employees are more likely to make less of an effort and to leave the company, which can contribute to a high turnover of staff. Studies have shown that 54% of respondents who didn’t know their company’s core values reported being engaged.
In comparison, 88% of those that did know the core values reported engagement.
Core values can boost the employee experience by creating a culture built on principles the employees can believe in and therefore boost morale, satisfaction and fulfilment in their work.
For company values to have any real impact then action is required. Just having company values alone won't change anything. For them to have a real impact, they need to be introduced and adopted by leaders within your company and lived by the employees.
Here are a few suggestions of how to introduce this.
- Involve your employees when creating your values.
- Communicate them often with your employees
- Make them visible company-wide
- Make emotional connections between each value and your employees
- Recognise employees who perform the values
In 2010, Standard Chartered shared their success story of how their company values helped their employee engagement with impressive results of 4.21 out of 5 in an employee engagement survey and a staff churn rate of less than 1.5%.
"This year, we have stepped up by embedding our values further into our processes for managing individual performance. For example, we have established a clearer link between performance and reward and how our people live our values." - Standard Chartered Annual Report 2010
How Company Values Can Improve Employee Performance
Your employees are crucial to your business.
As Richard Branson said "Employees come first. If you take care of your employees, they will take care of the clients.” Having a well-communicated set of company values can improve employee performance and therefore an overall performance boost to your business.
Four recognised key factors can affect an employees performance:
- Skills, knowledge and experience
- Cognitive ability
- Behavioural and personality suitability
- Motivation - which is closely linked to how an employee's values and interests align with a company's culture and core values.
Company values can play a key role in promoting the behaviour that you wish to see from your employees. When they know the values and behaviour needed to perform at their best the pathway is set for them.
When employees are recognised and rewarded for aligning to these values it boosts their motivation. A great way to do this is through peer-to-peer recognition, where everyone has the opportunity to reward and recognise each other's efforts.
When the employee feels they are making a real difference and their efforts are celebrated it creates a much deeper emotional connection with your company and better relationships with management.
How to Make Your Company Values Effective and Relevant
Creating core values of an organisation that are effective in creating a vibrant, productive and positive company culture they need to be relevant to your company and should be achievable by your employees.
Copying what the large organisations are doing might not be right for you. An MIT report on The Value of Corporate Culture reported:
"The value we find more commonly advertised is innovation (mentioned by 80% of them), followed by integrity and respect (70%). When we try to correlate the frequency and prominence of these values to measures of short and long term performance, however, we fail to find any significant correlation. Thus, advertised values do not seem to be very important, possibly because it is easy to claim them, so everybody does".
We would argue this is due to innovation being more of an aspirational value.
Integrity and respect are often permission-to-play values that should be expected as the minimum.
Just because this report found no benefit to performance for these values it does not mean they hold value in themselves as part of a wider vision for the biggest companies in the world.
To have effective and relevant company values they need to align with employee values. Involving your employees in the process of creating them is a good way to make their voices heard. Here are some ways your team can make your company values effective.
Start with a mission statement
A mission statement sets the objective for what your company hopes to achieve. Write a brief sentence on the impact your company can have on people. For example, here at Ovation Incentives, our mission statement is to "Simplify running international incentive programs for our clients, no matter where they are in the world." Your company values should support your vision.
Make values relevant to your company
The values you have don't have to be unique, but they should be relevant to your company and unique to your experience. Think about what applies to your company and employees. Embrace who you are and what you stand for.
Keep values simple and memorable
If no one understands or can remember what your values are they'll be pointless. Keep it simple. A short bullet point list of 5-10 values or short sentences should be plenty.
Your values should evolve as you do
Companies and people change over time. You should review your values regularly to make sure they are still relevant to who you are as a business and as a collective. Get feedback from your team as they grow over time.
Company Values in Employee Recognition Programs
Rewards and Recognition for your employee's efforts can go a long way and lift them, particularly on a bad day.
Employees involved in values-based reward and recognition programs feel more appreciated for their work every step of the way. When employees are recognised and rewarded for behaviour that exemplifies a company’s core values they are more than twice as likely to be focused on reinforcing and driving business goals. 33% more likely to be focused on empowering employees and 29% more likely to be focused on creating a positive employer brand.
With this in mind, value-based rewards should be a key element in any employee recognition program.
Let's face facts, implementing the right company culture is hard. It takes time and there are many factors at play. Getting your values right is a step in the right direction, but to succeed your team needs to live them. Lead by example and if you reward and recognise your team for displaying the behaviour that aligns with your values you'll be in a great position to keep hold of your best employees and attract new ones who fit your culture.