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HR and organizational culture

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By Kim Jong-nam

Occasionally, corporations undergoing the diagnosis process will receive scores that reflect poorly upon their HR policies. However, even when faced with these scores, some corporations refuse to consider addressing or changing these policies because they believe either that changes to HR will not have a direct impact on the organizational culture, or that it is more important to change people than to change policies or principles, or that it will be too costly and time-consuming.

Alternatively, some even believe that the scores don't really mean anything because employees will always assess HR negatively regardless of whether that is in fact true. These companies could not be more mistaken. Recruitment, promotion, evaluation, salary, training and career development are all important parts of how people are managed and how effective the organization's systems are. HR can affect organizational culture so significantly that the latter sometimes can't be improved without changing the former.

HR policies are a kind of rulebook that explains why something in an organization is happening in a certain way. These policies, be they explicit or implicit, shed light on what an organization's values and norms are and what you can expect leader behaviors to be. HR policies tell people how to interpret what happens in an organization and thus contribute to the creation of shared meaning. All the policies are simultaneously the result of organizational culture and its antecedents.

Let's look at three examples to see just how big an impact HR policies can have on organizational culture, according to organizational experts.

1) When diagnosing an organizational culture, many people highlight problems related to the performance management system such as unclear evaluation criteria, irrational evaluations, subjective evaluations, unfair evaluations, absence of feedback, insufficient compensation, etc. This can have a negative impact on the organizational culture because employees usually think that the performance management system will help them identify what goals they should set, what behaviors they need to exhibit, how to collaborate with their colleagues, and how they should resolve problems that the organization is facing. In other words, a performance management system clearly represents organizational values, beliefs, and characteristics. A performance management system is actually a method to disseminate values to employees. Can we truly say that we can change an organizational culture and leave the performance management system untouched?

2) When choosing a company to work for and deciding whether to stay in that company, many millennial and Gen Z employees regard their career development possibilities as one of the most important factors. Many corporations don't touch their career development systems even if they were mentioned by employees in the culture diagnosis. The career development system is a crucial signal to new hires when they are forming their initial impressions of the company and trying to understand its inner workings and whether or not they will be able to align themselves with their new organization. A career development system tells employees what a career means in their organization and what kind of development and growth will be possible there. Furthermore, these HR policies or practices, in addition to creating individual meaning, can also create collaborative or collective meaning or understanding, which is itself organizational culture ― the ultimate resource.

3) Many organizations regard employee compensation and benefits as a necessary but burdensome obligation on the company that has little to do with organizational culture. However, many employees think of compensation as an important indicator of their own success and development thus far in the organization. According to culture experts, employees tend to think that an organization's compensation system is closely linked to the level of emphasis on performance in that organization's culture. If an organization wants to become performance-oriented, attract potential employees' attention, and motivate their employees to exhibit desirable behaviors, the compensation system should not be ignored. If the compensation system does not match the company's intended message about performance, employees will become confused and demotivated and may eventually exhibit learned helplessness due to the unattractive compensation system. This is especially true for struggling employees.

Knowingly or unknowingly, people and organizations send and receive endless signals to each other. In exchanging this information, social values and norms are naturally formed and manners of interaction are decided. HR policies and practices can explain why employees have certain behaviors or understandings. Organizational characteristics are very important to employees, who judge whether their organization has characteristics that they desire to experience through the signs and messages that the policies imply. Human Resources management is intimately connected to organizational culture because specific functions like recruitment, promotion, evaluation, salary, training, and career development create a mental and emotional contract between employees and their organization.

Just like human beings, organizations will inevitably reveal their intentions, behaviors, and characteristics through their policies, which employees interpret in the context of their own growth and development. If an organization appears to be violating the mental and emotional contract, employees tend to feel betrayed and deceived. That is why if an organization diagnoses its culture and finds something wrong in its HR, it needs to show employees that it is addressing this issue in order to remain trustworthy in their eyes. Again, just like human beings, when an organization chooses to remain consistent, objective, communicative and cooperative, they will be loved and their loyal employees will choose to stay.

Kim Jong-nam is the founding CEO of META ( and a global organizational development consultant who works both virtually and in person.

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