How Organizational Values Impact Business and Why It Matters?

Volodymyr Bilyk
19 August 2021

Organizational values are one of those conceptual things that subtly influence every other element of the company. So, in a way, company values define decision-making and how the company handles itself externally and internally. 

Because of that, clearly defined organizational values are critical for maintaining an effective employer’s brand.

In our previous articles, we have explained the importance of company culture and the ways mission, vision, and values define the company. This article will go into detail regarding company values and why they are critical for success.

What are Organizational Values?

what are organizational values?

In one way or another, organizational values (aka company values) refer to a set of guiding principles that provide a framework for realizing the company’s mission and vision.

  • On the one hand, company values describe the manner of interaction with clients;
  • On the other hand, values outline the ways employees handle themselves and treat each other.

Both aspects combine when it comes to attracting candidates. As part of employer branding, company values provide a conceptual backbone for the brand presentation. 

Clearly defined, well-presented, and relatable organizational values are critical at the consideration and application stages. 

When done right, they provide a gateway for the candidate into the company’s mindset. This impression is impactful for decision-making. 

What is the Real Purpose of Organizational Values?

You can break down the purpose of organizational values into several integral elements. Let’s take a look at them one by one. 

Differentiate from The Competition

Differentiate from competition

Company values play an instrumental role in shaping a company’s value proposition for potential clients and employees. They make it tangible and relatable.

In one way or another, dealing with the company is not just about pragmatic value. It is also about being treated with respect in a mutually beneficial partnership. Organizational values inform and guide that aspect.

  • After all, any company can write about things in the abstract. For example, how they deliver high-quality service in time and bring the business to the next level. 
  • Or in the case of recruitment: “the company is more than just a job. It is a place for self-realization”. These are good ideas, but to work, they need fleshing out.

In contrast, you can emphasize practical things that make the company stand out from the competition. For example: 

  • Can-do approach when it comes to handling challenges; 
  • Team synergy in setting goals, breaking them down into objectives, and gradually achieving results;
  • Continuous learning – a mindset for taking something valuable from every experience and implementing it into subsequent works. 

This approach to organizational values is more descriptive from the outside. When you read it – you can understand what the company is about, whether you share such values, and determine whether you want to collaborate with them.

Generate Candidate Engagement

generate candidate engagement

We’ve touched on this in the previous section, but it is important to reiterate. Employer branding defines the perception of the company as a workplace. 

This perception is critical for candidate attraction. You can’t just make people want to work for you because you offer a higher salary and better job security. 

  • It matters, but that’s not the only reason candidates want to work for this company and not the other one. 
  • There are always bigger companies who can offer bigger and better compensation and benefits packages. 
  • That’s why emphasizing organizational values help attract suitable candidates who share your values and can potentially fit into the company.

Culture fit is one of the most critical aspects of establishing an effective recruitment process and guaranteeing hiring success. But you need the entry point, and company values play that role.

That’s where the employer value proposition kicks in.

  • EVP generates engagement while values perpetuate tit.  

Here’s an example:

  • The job posting attracts a candidate. He’s considering applying but is hesitant before he knows more about the company. “What’s in for me?” he asks.
  • He looks through the website and reads the values section. It clicks, he shares some of the values, and now he thinks he would like to work for this company. So he clicks “apply.” 

In this scenario, the candidate identifying with the organizational values moved him from consideration to decision. 

Similarly, clearly defined company values simplify candidate assessment for culture fit. This approach saves time and effort in determining suitable candidates for the roles.

Boost Employee Motivation

Boost employee motivation

Handling employee motivation is tricky. There is an entire cottage industry dedicated to various methods of managing motivation and recognition. 

But at its core, employee motivation comes down to the organizational values and how they perpetuate engagement and motivation on a conceptual level. 

Here’s how it works: 

  • Given that company values set guiding work principles, they also provide a foundation for work drive to manifest its vision and mission.
  • In a nutshell: the reason for working determines the quality of work.

That’s why the practicality of organizational values matters. You can write about “changing the world” and “challenging yourself” all you want, but these are abstract things you can’t really apply in the trenches. 

However, you can formulate values in more practical terms. For example:

  • Thinking outside the box – to encourage not to stick to the formula;
  • Can-do approach – to perpetuate the initiative;
  • Synergy – to facilitate the collaborative effort.

This way, it is more tangible and directly refers to the day-to-day work employees are doing.

Guide Decision-Making 

Guide Decision-making

Organizational values provide a conceptual backbone that expresses the company’s mission and vision in practical terms.

As such, values directly manifest themselves in employee’s decision-making. While values are by no means an instruction, they can suggest courses of action in various scenarios. 

For example, emphasizing rationality as a company value. 

  • The decision-making process is based on logic and necessity in a particular task and the general goals.
  • Obviously, decision-making needs to be rational, but it is also essential to accentuate it on the level of company values. Thus, its very presence provides a balancing act for decision-making. 
  • So, if there is a stalemate or even conflict in the back of your mind, you know you can roll back and look at things rationally and determine a reasonable solution. 

In a way, values as decision-making tools are an expression of trust by the company. You can explain with a sentence like this: 

  • “Here are the ground rules. We trust your skills, experience, expertise to make the right judgments within this framework.”

In conclusion

Organizational values play an essential role in defining the company’s perception both internally and externally. 

Values illustrate the way company handles things and moves towards its goals. As such, it is critical to put effort into expressing company values in a way that helps to understand what’s the company is about and why it is worth working with. 

  • In our next article, we will showcase how to determine organizational values and make them truly effective.

If you need help with fine-tuning your company’s values or want to overhaul the way organizational values are presented – our employer branding consultants can help.

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