Building a Positive Company Culture with Competency Management

Using competency management is key to fostering a positive company culture and aligning employee skills with your organization’s values and goals.

Whether you’re a long-established organization or a startup that is just beginning to form your mission and values, it’s essential to the vitality of your business that company culture be maintained and, if necessary, completely overhauled.

One of the most comprehensive ways to enable all current and future employees to be on the same page with your positive company culture initiative is through a competency management system. With a way to track, manage, and build competencies, your organization will have the tools necessary to cultivate the workforce that will most support and enhance your company culture.

What is Company Culture?

Your company culture is your business’s “personality.” It’s made up of your company’s ethics and values, as well as your mission, expectations of your workforce, and the overall work environment. In essence, company culture describes the atmosphere or “vibe” of an organization and is created by factors such as its mission, vision, leadership, diversity, and more. Companies renowned for their positive cultures, such as Google, often emphasize making workers feel valued and respected, while others like Slack ground their operations in core values such as empathy, craftsmanship, and diversity. This proactive approach to defining and living by company values is a common thread among organizations that successfully cultivate strong, positive cultures.

It’s also important to recognize that great employers aren’t necessarily great for everyone. As different companies excel in various areas like focusing on success, company stability, or fostering a diverse workplace, what constitutes a ‘great place to work’ can vary significantly among individuals and demographics. Therefore, it’s more important to be great *at the things that matter the most to you* as an organization. By first defining what’s important to your company and what you stand for—considering your goals, strategy, and the desired skills, values, and behaviors of your team—you can then cultivate a culture that reflects these priorities.

How Does Company Culture Affect Your Organization?

A more efficient and precise hiring process, higher performance, and high quality deliverables are just a few benefits of a positive company culture. Here are some ways that company culture can influence your company’s daily operations:

The ability to retain top talent. If your company strives to hire top talent, having a positive company culture is no longer discretionary; it’s essential. A recent study showed that 41% of candidates search for information about company culture before they apply. This might mean searching your company website, checking out glassdoor.com reviews, or learning about your company through current and past employees. The internet makes it incredibly easy for potential hires to find out what it’s really like to work at your organization. When your company has a reputation for having a positive company culture, the candidate pool often expands, giving you more top talent to choose from. Moreover, with a positive company culture, employees feel valued and empowered, especially when they have avenues for continued learning and the ability to move within the company or advance in the future.

Organizational performance and productivity. You’ve heard the saying, “you reap what you sow.” If a company creates a stressful and anxiety-inducing company culture, employees can’t perform well. Or, if they do perform, it may be at a price. In an excerpt from the Harvard Business Review states,

“In a large-scale study of over 3,000 employees conducted at the Karolinska Institute, results showed a strong link between leadership behavior and heart disease in employees. Stress-producing bosses are literally bad for the heart.”

Studies like these show that not only are employees less productive in a poor company culture, they’re more likely to get sick. This drives up the cost of healthcare for the company, ultimately affecting your organization’s bottom line. Conversely, employees who work in a positive company culture tend to be more productive. As Fortune highlighted, “97% of employees at the Best Workplaces in Consulting & Professional Services say their peers “are willing to give extra to get the job done.”

Furthermore, companies that cultivate a positive company culture often have long-term plans that include career development for their employees. When employees are confident in their current position and their career path, they tend to be happier, more motivated, and exhibit greater loyalty.

Top talent won’t stay with an organization that upholds a poor company culture. Research shows that workplace stress can lead to a 50% increase in voluntary turnover. And the cost of replacing talent adds up. It’s estimated that replacing one employee can cost upwards of 20% of that employee’s salary.

Clear Company Culture Means an Efficient Hiring Process

Having a clear company culture makes the hiring process easier for potential hires and your HR department alike. It allows people who are interested in working for you to understand whether or not your company is a good fit for them. A clear company culture also enables those in your HR department to quickly distinguish between candidates who will uphold all aspects of the company culture and those who just aren’t right for the company. According to Forbes, 89% of hiring failures are due to a poor cultural fit.

Having a clear company culture makes it easier for potential hires and your HR department alike. It allows people who are interested in working for you to understand whether or not your company is a good fit for them.

Hiring for Culture Over Competencies

In the hiring process, it’s likely that you’ll come across candidates who are a perfect fit culturally but their competencies may not be up to par. Suppose candidate X shares your organization’s values and vision while candidate Y is less of a cultural fit. But candidate Y is the most qualified for the position from a skills standpoint. It could still be more beneficial for your company to choose candidate X. For instance, Zappos famously implements an interview policy where they conduct one interview for skills and another purely for cultural fit. They believe that when employees are hired specifically for cultural fit, there is a higher likelihood that they’ll stay with the company long-term. Zappos has also made it a point to define their values and make them known company-wide so that all employees are on the same page.

Staff who align with your company culture are more likely to inspire and motivate others, perform better and are more productive while they continue to build their core competencies within your organization. Having a competency management system in place allows you to choose the right candidates for your organization, regardless of skills gaps.

Building Competencies through Training and Learning Management

Building a great, sustainable positive company culture requires deliberate effort and care. You need to identify, measure, develop, and celebrate the elements that make it a success. Ultimately, it’s the behaviors, attitudes, and skills – workforce competencies – that drive greatness within your culture. Your workforce’s collective knowledge and abilities or expertise in specific subject areas are what define your organization’s core competencies. These core competencies, which should be integrated into job descriptions, recruitment, learning and development plans, employee recognition, performance reviews, and succession planning, can distinguish you within your industry and give your company a competitive advantage. With a comprehensive employee management system, which includes a competency management plan, you can test, access, and maximize your organization’s core competencies. With such a plan in place, employees always know where they stand, what skills they should currently have, and what they’re expected to learn next.

An effective competency management system includes employee performance management software and e-learning tools to support competency-based assessments and training, coaching and development, succession planning, and leadership development. For example, one organization, after a skills audit revealed that some employee skill sets weren’t up to industry standards, invested in their workforce by setting up a competency management system. This system included continued learning for all staff, enabling employees to build their skill sets, which in turn gave them confidence and empowered them in their positions. Because the learning management system was competency-based, employees built skills individually while strengthening the entire organization, fostering a sense that they were valued and contributing to a common goal. One critical aspect of a competency management plan is a learning management system (LMS).

An LMS can provide training courses and assessments to bridge employee skills gaps and can create a pathway for success within your company – which helps build a positive company culture. To ensure this culture is effectively built and maintained, it’s helpful to clearly define the company values and the behaviors that reinforce them. Then, align these behaviors with the values, where managers act as role models, educators, and coaches. This process may need to be refined over time to adapt to company growth or changes such as new leadership or strategic shifts. With an LMS in place, you have the freedom to create your ideal workforce while cultivating an inspired company culture.

Learn more about Avilar’s learning management system for small business – WebMentor LMS™. To schedule a demo, contact us today.