Guest contributor Beth Steinberg has more than 17 years of human resources experience helping leaders and companies -- both emerging and Fortune 500 -- with complex organizational and growth issues. She is currently an Organization Development Consultant living in Silicon Valley.
Traditionally, investors measure a company's value primarily by its financial metrics (margins, debt level, growth rates, etc.). While this is obviously important, financials alone are not the only indicators of long-term success.
In fact, one primary indicator that is often unaccounted for in a company's stock price is company culture.
As employees, we see more than people on the outside see, and culture can have a significant impact on company success. What components can impact employee satisfaction and productivity? Many of these elements are hard to measure, but there are a few management practices that can significantly impact the culture of a company.
1. Transparency and open communication
This concept seems basic, but often systems and processes at companies are not known to employees. The more employees understand how and why things are done, the greater their trust in the company becomes. The philosophy behind a company's management (compensation practices, performance management criteria, resource allocation, and project "green lights") should be as clear and as consistent as possible. When practices are not clear, it leaves employees wondering what went into the decision-making process.
Lack of transparency by a company's leadership can impact organizational trust, consequently impacting employee effectiveness and productivity.
The culture of Zappos, for example, thrives on open communication. The CEO and COO of Zappos have a blog in which they discuss what's happening at the company, as well as share their general ideas about the company. Since Zappos is a privately held company, they may have more latitude to do this, but the spirit of open dialogue and open communication is still a great model to emulate.
Conversely, when CBS Interactive, a unit of CBS
2. Team focus
When employees share information and work to support one another, they tend to take more responsibility for their roles, as well as feel better about the company for which they work. Companies that stress the importance of team through bonus programs and other metrics tend to foster employee camaraderie and better working relationships.
For example, when I worked at Hewlett-Packard
3. Challenging work/Job design
Employees want to know that their work matters to the overall success of the company. Therefore, it is important that jobs are designed in a way that their value and impact is clear to the employee. Technology companies are a great example of this -- at Facebook, engineers take part in "Hackathons," where they can work on new projects that may end up being product features. At Google
4. Culture of accountability
Clear roles, responsibilities, and accountability are a key element in functional company cultures. For example, Cisco Systems
Another tech company, Network Appliance
On the other hand, management "passing the buck" sets an example that can be very destructive. Any company where the management team does not feel responsible for employee layoffs is probably a terrible investment. The manner in which the CEO of the Peanut Corporation of America handled the recent lawsuit over a salmonella outbreak is an egregious example of not taking accountability for a company's actions.
In a perfect world, human resources should align with projects and revenue growth. Adding and subtracting headcount is often a very complicated issue. Too many employees can result in high fixed costs and the potential dilution of responsibilities, while too few can result in burnout and resentment.
New products and projects can take a larger investment in people initially, but should eventually align with sales and revenue growth. When the growth does not follow, layoffs and reorganizations usually occur.
From 2006 to 2008, Electronic Arts
6. Open feedback systems
Driving employee engagement through feedback and development will result in happier, more motivated employees. Most employees crave feedback and really want to know how they are doing, but traditional performance management systems typically do not work. They are seen as a "check off," but the process is often too arduous to be truly meaningful.
In spite of their best efforts, even good managers put one-on-one time with employees on the back burner. The new generation of our workforce ("Net Geners") truly thrive on feedback and development.
So, when you think about the long-term success of any company, look beyond the financials to culture and innovative ways to engage employees. Driving engagement can be the key to a company's long-term success and a strong sense of fulfillment among its employees.
For more Foolish observations on company culture:
Motley Fool Guest Contributor Beth Steinberg owns shares of Google. Google is a Motley Fool Rule Breakers recommendation. Electronic Arts is a Motley Fool Stock Advisor selection. The Fool has a disclosure policy, outlined here.