Culture vs perks: What kind of business are you building?

Perks have their place, but nurturing company culture and a sense of purpose may be more important, says Peter Cheese, chief executive of the Chartered Institute of Personnel and Development

The culture of your business affects every single aspect of how it operates. It’s “the way we do things round here” and how decisions get made. Your business culture is at the heart of whether you’re innovative or process driven, risk averse or risk takers, serious or playful; the list goes on. It’s the values and behaviours you live and breathe by, and is one of the few things that can ultimately differentiate you in a crowded marketplace.

We know people want to work in organisations with a strong sense of purpose and values, and that environments of mutual trust and a shared vision enable people to speak up, so that good ideas can prosper and bad practice can be stamped out. But are some businesses confusing a purposeful culture with ad-hoc perks? Is free pizza on Fridays really enough to attract, engage and retain top talent or does it need to be underpinned by more meaningful offerings?

Unlike strategy, culture is very hard to imitate and it is critical to organisational performance. As the business guru Peter Drucker observed some time ago, culture can eat strategy for breakfast. Nor is culture static. Research on organisational culture has shown that culture needs regular attention – if left unchecked it will dilute and morph. There’s a common assumption that culture will always be the bedrock of your business and will self-regulate, but in reality there are countless ways it can be undermined.

Let’s consider perks for a moment. Sure a foosball table is fun, but how is it supporting your culture? Is it encouraging team-building or creating cliques? Similarly, it’s a fair gesture to provide staff with free pizza if they need to work late, but is this really a perk or is it a reinforcement that your people are expected to work beyond their hours on a regular basis?

REINFORCE CULTURAL NORMS

When you put them under the microscope, perks can be little to do with culture and instead are often used to put a plaster over big, persistent problems. Of course, considered gestures and fun stuff will always have an important place in any workplace, but the odd freebie in isolation isn’t going to cut it. You need to consider the wider reward package, how it signals what’s important to you as a business and how that supports the culture you want. It is, therefore, vitally important to reward people based not just on the “hard” metrics of numbers met or delivered, but also on behaviours and alignment to values. This is one of the most powerful ways of reinforcing cultural norms.

Foosball table
Perks such as a foosball table may not support company culture

At the time of introducing anything new, you need to think about how it fits with your cultural foundations; is it reinforcing them or eroding them? The simple act of giving people more money, although always welcome, doesn’t necessarily make people feel any more engaged or motivated. A sense of pride, alignment to purpose and responsibility are much more powerful. Introducing financial incentives needs careful thought in terms of the kinds of behaviours being encouraged. The promise of high bonuses can lead to risky and sometimes even reckless behaviour. We need to learn from recent failures and mistakes in this regard, and many businesses are on the long journey to realign to their core values and behaviours to build a better future.

It is vitally important to reward people based not just on the ‘hard’ metrics of numbers met or delivered, but also on behaviours and alignment to values

The best incentives are ones that reflect both individual and collective performance, especially if collaboration is a central element of your culture. For example, if you want a team-based culture, organise team events as rewards rather than offering high-performing individuals cash bonuses. If you want to boost organisational and individual resilience look at rewards that reflect that such as corporate gym membership or a health-conscious kitchen.

Culture also plays a vitally important role in the kind of talent you attract. The people who will thrive in your organisation are those who fit with your culture, those whose personal values have a natural fit with the values of your business. This isn’t about hiring clones; it’s about identifying people who share your vision and what you stand for as a business. When you’re making hiring decisions, you need to ask if your decision is mainly weighted by technical skill or if you’re also looking at the applicant’s cultural fit and your longer-term skill requirements?

DAMAGE TO EMPLOYER BRAND

If people don’t fit your culture, they probably don’t belong at your company. They may bring in the numbers, but if their behaviours don’t fit your culture they can do serious damage to your employer brand, the wider team and the customer experience. Ultimately they will leave as they won’t feel engaged by your business goals, all of which could have been identified early on in the recruitment process by asking the right questions about values, what motivates them, how they cope under pressure and their communications styles.

Once you do have the right people on board, reinforcing your culture has to be a consistent effort. HR has a key role to play in understanding culture and the kinds of processes and interventions that affect it, but culture starts from the top and needs to be owned and invested in by everyone in the business. Most importantly, it needs to be role-modelled by leaders and managers through everything they do from interviews and appraisals, through to how meetings are run, and office space is designed and used.

Work is shifting towards an experience rather than a place

Perks certainly have their place along the way, but before you invest in them, give careful thought to whether they are serving a genuine workforce need. Think about how you can measure the impact of initiatives on business performance to make sure you’re investing in the right things to create a more engaged workforce and a happier, more productive working environment.

Culture isn’t static or set in stone – it will drift and dilute if not paid attention to and reinforced through everything you do. Look out for subtle signs that people just aren’t getting your culture anymore and take action. It can be necessary to evolve your culture over time, but staying true to your core principles and values is essential. A firm culture with clear values and expectations will enable you to attract the right talent for your business and retain them long after the last slice of pizza has gone.