Why values have a big impact on employee engagement

An organisation’s values have a big impact on employee engagement. In this post we explain how values affect engagement, why it is important for values to be authentic, and why it is important for leaders to ensure the organisation’s values are aligned with their employees’ values.

Values can be broadly categorised into personal values and societal values.

Personal values are individualised beliefs that influence our preferences, behaviours, and priorities.

Societal values, on the other hand, are the collective beliefs and principles that govern a community or society. They reflect the shared ideals, norms, and expectations of a particular culture or group of people.

In the context of the employee experience we can think of the organisation as the society and these values as defining the organisation’s culture.

This is what makes values critical to employee engagement as there is an interaction between the organisation’s values and culture and every individual employee’s values.

What are organisation values?

Organisations can have two types of values:

Brand Values

Brand values define how the organisation will add value to its customers.

Brand values are important for the customer as they describe what it will be like to do business with the organisation.

Will they deliver low cost? Will they deliver high quality? Will they constantly innovate with their products?

For example, the NHS has 6 core values that provide a sense of what patients should expect.

• Respect and dignity.
• Commitment to quality of care.
• Compassion.
• Improving lives.
• Working together for patients.
• Everyone counts.

Leadership Values

Leadership values should align to the organisation’s brand values. In the NHS example above, it would make sense to assume that all NHS leaders are encouraged to share the same values and use them to guide their decision making and behaviour. And here you can see the challenge…..

Leadership will have their own personal values, which will unconsciously influence what they treat as important, what they will appreciate, and what they will discourage.

These values may or may not be in alignment with the values the organisation is trying to reinforce.

They don’t all have to share the exact same set of values, but the values the organisation defines as being its core values should be shared.

If not, then there will be conflict and disagreement around every decision the senior team makes.

Just imagine…a core value of the organisation is ‘Commitment to quality and care’, yet the Finance Director happens to believe in things being delivered as cost-effectively as possible. What if a particular therapy is going to save lives, but blow the budget?

What is the impact of values?

Values have a profound impact on individuals and organisations.

At the individual level, values help us make choices aligned with our personal beliefs. They influence our relationships, career choices, and lifestyle decisions. Living in accordance with our values promotes self-esteem and a sense of inner harmony.

Moreover, values can guide our ethical behaviour, encouraging us to act in ways that are morally upright and socially responsible.

At the organisational level, shared values shape the norms and cultural practices of the organisation. They form the basis of social cohesion and provide a framework for resolving conflicts and promoting cooperation. This is what shapes and reinforces the organisation’s culture.

People who are comfortable with these norms feel that they ‘fit’ into the organisation’s culture. People who behave in a way that is counter to these behaviours are potentially damaging to the organisation.

Of course there is a risk that you end up with a load of employees who all behave and think in the same way. This is dangerous so we are not advocating that you should aim for this. Striving for diversity is actually more likely to reinforce your culture.

As values define how we behave in practice, they determine how leaders behave towards employees and they determine how everyone behaves towards the organisation’s customers.

Values are more than just words, values can be seen in practice and must be consistent.

Where leadership behaviour is in alignment with what customers and employees expect, the organisation’s values will ultimately deliver performance and growth (assuming the product or service the company is selling is also what customers want).

Conversely, the moment a leader acts in a way that is not in accordance with the values, it will erode the culture and undermine the fundamental values. For example, if any leader criticises an employee’s idea then it will slowly start to create a climate where people feel less safe to voice their opinions and it starts to erode innovation.

How do values affect the employee experience?

2. How leaders behave defines the organisation culture

Ultimately, how leaders behave – what they say and do, and how they say and do it – reinforces the organisation’s culture. The more leaders behave in a way that reinforces this, the stronger the culture will be.

This is because everyone looks to their leaders to learn what to do in different situations. They learn what leaders appreciate and what they will punish.

All employees model these behaviours so it eventually becomes the norm – the way we do things around here.

For example, if leaders tend to send emails outside of working hours then everyone else will begin to think that is expected so they begin to feel obliged to respond to emails out of working hours and send their own emails outside of working hours. A simple behaviour starts to change the way we do things around here.

3. The organisation culture impacts the employee experience

Organisation culture is one of the key components that impacts the employee experience. The others are the nature of work people do and the processes and systems etc., that underpin how things are done.

Leaders are pivotal as they have a fundamental influence over culture, what work looks like and how work is done and the systems and processes that are in place.

Therefore, leaders need to ensure that their leadership behaviour, how work is structured, how people are managed and the processes and systems etc., that are in operation are all aligned back to the organisation’s values.

Your culture will define how you make decisions and how you do things. This organisational behaviour impacts the employee experience.

For example, where the culture is focussed on cost cutting, you will question every decision around what resources to provide and how much to invest.

Whilst this can lead to efficient performance by finding ways around problems without spending money, it can also lead to people feeling they don’t have the resources they need to do their job.

How do values impact employee engagement?

Employee engagement is an outcome, it is what you get when the broader employee experience is positive.

Where people are engaged they will recommend the organisation as a great place to work and they will see a future for themselves.

Employee engagement is a function of how committed people are to their work and how committed they are to the organisation. Where people are both committed to the organisation (culture) AND to their work, they are likely to be highly engaged.

It is possible to have both, one or the other, or neither.

Where employees feel they have a positive experience of work they will be more engaged, more motivated, more loyal and continue to contribute to the organisation.

If any part of the employee experience is out of alignment then it will have a fundamental effect on employee engagement.

It stands to reason then, that if employee engagement is a function of the employee experience and the employee experience is a function of the organisation’s values, then values must ultimately impact employee engagement.

What if the organisation does not have a clear set of values?

So far we have assumed that the organisation’s values are clearly defined and communicated, but what if the organisation either doesn’t have a clear set of values, or they haven’t been communicated?

In simple terms, it leads to confusion. In our experience, where the organisation’s values are not clear then employees do not have a clear roadmap of what is acceptable and what is not. It means they can only make assumptions and inferences based on what leaders say and do, and how they say and do it.

If your boss has a really strong focus on detail and tends to frequently check whether or not you have completed a task, then you will tend to assume that they value detail and like to feel that they are abreast with everything all of the time – in other words they are a control freak! But what if you have colleagues whose manager doesn’t do this and instead allows them a lot more freedom? Who is right?

Where there is a lack of clarity of values then the result tends to be confusion amongst employees. Employees may feel that their values are not aligned to the organisation’s, but they don’t know why.

Conversely, if your values are clear then employees may still be dissatisfied, but at least they can then make an informed choice about whether or not they want to be part of the organisation.

Should organisations listen to employees when defining their values? Do employee values matter as much as the organisation’s values?

So far, we have suggested that organisation culture is defined by its leaders, i.e. top down. But is there a place for defining the organisation’s values based on what employees need?

Well, yes, and no.

Organisation’s that pay attention to what is important to employees and incorporate those into their core values are likely to be seen as being values-led. It will also provide employees with a sense that they have been heard, that the organisation cares about their values in deciding the way it does things.

The danger with this approach though is that it can lead to organisations including every possible value. This is where organisations end up with really generic sounding values. As a result they’re not authentic and leaders don’t live the values. People don’t see the values being brought to life so they just become meaningless words.

The organisation also risks ending up with dozens of values many of them potentially contradictory.

For example, many employees will value lots of flexibility whilst others may value a high degree of certainty. Which value do we go with?

In addition, leaders are unlikely to truly own the organisation’s values if they don’t wholeheartedly believe in them.

There will come a point where leaders are faced with a choice around how to behave in a situation and how they choose to behave is likely to be based on their own personal values rather than values defined by consensus.

For organisation values to be genuine then, rightly or wrongly, then need to reflect leadership values. Or leaders need to absolutely commit to behave in accordance with the desired values.

This presents a challenge though, perhaps the biggest challenge when it comes to thinking about employee engagement……

To feel engaged, employees must feel their values align with the organisation’s values

For employees to feel engaged they need to feel that their values are aligned to the organisation’s values.

Employees need to feel that they get what they need from the organisation to ensure they are prepared to give the organisation what it needs.

Where employees feel that the organisation’s values align with their own they are more likely to be engaged.

However, if an employee feels their own values are not shared by the organisation it creates a misalignment and this can lead to disengagement.

How should organisation’s ensure alignment between organisation values and individual values?

Organisations can tend to assume that all employees want the same thing. Indeed, this is one of the downsides of many employee engagement models – they are based on an assumption that most employees value most of the same things.

Whilst many employees will share some fundamental values, not everyone shares exactly the same values to the same extent.

For example, most people value fairness and respect at work. However, some employees will value a high level of autonomy others won’t; some will value lots of recognition whereas others won’t.

It is these differences that can have a real impact on engagement at the individual level.

The trick is to think about what employees need in addition to how much they feel they get.

Many employee surveys focus on evaluating how much people feel they get at work, but they don’t assess how much people feel they need those things.

For example, Gallup’s Q12 is based on their own research that explores the things that impact employee engagement. One of the questions in the Q12 is “I have a best friend at work”. Whilst this sounds really nice, we argue that not everyone needs to have a best friend at work.

Our suggestion is that organisations should do two things:

Firstly, organisations should define a core set of values – the things that are the most important that all employees should strive to adhere to.

Secondly, they should do more work to understand what employees need from their work and from the organisation and then build this into their employee engagement surveys and initiatives.

Here’s a simple diagnostic to identify the relative importance of values. This list is by no means exhaustive, but you will get the idea.

Try our values diagnostic for yourself:

What can leaders do to ensure organisational values and employee values are aligned?

The organisation’s leaders need to define the core values for the organisation. These are the things that define leadership behaviour and culture.

Whilst it may be useful and appropriate to seek input from employees around what they want the organisation culture to be like, the organisation’s values must ultimately be decided upon by senior leaders to ensure they can deliver on those values.

However, leaders should make the effort to understand each individual employee’s own personal values and adapt to ensure those needs are met.

Effective leaders are good at giving people what they need rather than what the leader wants. They are able to recognise how their own values are influencing their leadership behaviour and modify their behaviour to ensure it aligns with their employees’ own values and needs.

Finally, leaders must act when people behave in a way that is contradictory to the organisation’s values.

The moment that someone is seen to be allowed to behave in a way that is counter to the organisation’s values, or behave in a way that insults someone else’s values, it will send an enormously powerful signal to the organisation that those values are actually not that important.

This is why values must be grounded in actions and not just words, policies or statements.

In Conclusion

Only when organisations have authentic values, consistent leadership style and the ability to ensure the needs of individual employees are met will they begin to see true employee engagement.