American Journal of Engineering and Technology Management

2017; 2(5): 72-76

http://www.sciencepublishinggroup.com/j/ajetm
doi: 10.11648/j.ajetm.20170205.13
ISSN: 2575-1948 (Print); ISSN: 2575-1441 (Online)

A Critical Review of Organizational Culture on Employee

Performance
Ananta Narayana
Department of Humanities and Social Sciences, Motilal Nehru National Institute of Technology, Allahabad, India

Email address:
ananta.narayana20@gmail.com

To cite this article:

Ananta Narayana. A Critical Review of Organizational Culture on Employee Performance. American Journal of Engineering and
Technology Management. Vol. 2, No. 5, 2017, pp. 72-76. doi: 10.11648/j.ajetm.20170205.13

Received: September 1, 2017; Accepted: October 8, 2017; Published: November 7, 2017

Abstract: The study attempts to examine the effect of organizational culture on employee performance and its evaluation
has been identified by certain researcher’s research. The main aim of research article is to identify and determine strong
relationship between organizational culture and employee performance. Literature review is adopted as methodology to review
the culture of an organization upon employee performance. The owners and top management of an organization generally
tends to have a large impact on establishing a culture. The Organization’s culture results from the interaction between the top
management’s assumptions and shared visions of cultural values and human behavior and what the employees of the
organization learn from their own experiences. Managers relate organizational culture and employee performance to each other
as they help in providing competitive advantage to the organizations. Hence Organizational culture plays a vital role in
enhancing employee performance. Organizational culture must be binding on all members and employees of the organization
as this will encourage uniformity among members of the organization and this enhance commitment, group efficiency and
overall performance of employees.
Keywords: Organizational Culture, Employee Performance, Impact, Employee Commitment, Organizational Goals

communication of roles and responsibilities to all individuals.

1. Introduction Employees know what is expected of them, how
Organizational culture defines the way of employees’ management assesses their performance and what forms of
complete tasks and interacts with each other within the rewards are available. The objective of this study is to
organization. The cultural pattern comprises various beliefs, examine the effect of organizational culture on employee
values, rituals and symbols that govern the operating style of performance and in line with this objective this research
the people within a company. Organization culture binds the study is poised towards providing answers to the following
employees together and provides a direction for the growth questions, does organizational culture have any effect on
of company. Organizational cultures can have varying employee performance and in what way does organizational
impacts on employee performance and motivation levels. culture effects employee performance. The study is based on
Oftentimes, employees work harder to achieve organizational secondary sources and for that critical review of various
goals if they consider themselves to be part of the research papers related to the study has been done.
organizational culture. Different cultural background
operating in one company can also impact employee 2. Review of Literature
performance. Strong corporate cultures indicate that
employees are like-minded and hold similar beliefs and The aim of the literature review is to examine the existing
ethical values. When these beliefs and ethical values align research to explore the links between organization culture
with business objectives, they can prove to be effective in and employee performance. There has been significant
building teams because rapport and trust quickly ensues. The research in the literature to explore the effect of
bonds that the teams build help them avoid conflicts and organizational culture on employee performance in which
focus on task completion. Strong corporate cultures ease some of them are reviewed. Culture is an organization
73 Ananta Narayana: A Critical Review of Organizational Culture on Employee Performance

ideology, or “the traditions and beliefs of an organization that reflects its ultimate long term objective which is
distinguish it from other organizations and infuse a certain accomplished by conducting integrated operational and
life into the skeleton of its structure” [29]. Culture is an behavioral activities [18]. A firm’s performance improves if
active living phenomenon through which people jointly it has a clear sense of purpose and commitment towards its
creates and recreates the worlds in which they live [30]. mission [18]. The performance of an organization is
Culture is conceptualized as shared beliefs and values within dependent on the degree to which the values of it are widely
the organization that helps to shape the behavior patterns of shared [13]. Ogbonna widely argued that shared and strongly
employees [18]. Organizational culture has been defined as held values enable management to predict employee’s
the “normative glue” that holds an organization together [43]. reactions to certain strategic options and by reducing these
Organization culture as the drive that recognizes the efforts values, the consequences maybe undesirable [31]. Denison
and contributions of the organizational members and found, in his study of organizational culture, that companies
provides holistic understanding of what and how is to be with a participative culture reaped a return on investment,
achieved, how goals are interrelated, and how each employee which averaged nearly twice that of firms with less efficient
could attain goals [13]. Hofstede summarizes organization cultures. His conclusion was that cultural and behavioral
culture as collective process of the mind that differentiates aspects of organizations were intimately linked to both short-
the members of one group from the other one. Thus the term performance and long-term survival [8]. Deal defines
above concept asserts that organizational culture could be the organizational culture as values, beliefs and behaviors that
means of keeping employees in line and exhilarating them differentiate one organization from another. Performance of
towards organizational objectives [15, 16]. Schein outlined any organization sets it apart from other organizations. The
the organizational culture as overall phenomenon of the term performance is often used to describe everything from
organization such as natural settings, the rite and rituals, efficiency and effectiveness to improvement [7]. Previous
climate and values of the company [36]. He further defined literature studies obviously show evidence of positive
organizational culture as a dynamic force within the relationship between organization culture and its
organization which is revolving, engaging and interactive and performance. Satisfaction and positive attitude can be
it shaped up by the employees and managements gestures, achieved through maintaining a positive organizational
behaviors and attitudes. Earlier studies indicated a link environment, such as by providing good communication,
between organizational culture and employees’ performance autonomy, participation, and mutual trust resulting superior
[37]. Magee argued that organizational culture is inherently employee performance [1]. Mc Gregor explains that the
connected to organizational practices which in turn influence satisfaction and attitudes of the employees are important
employees’ performance [23]. Hellriegel & Slocum contend factors in determining their behaviors and responses at work
that organizational culture can enhance employees’ and through these behaviors and responses, organizational
performance if what sustains it can be understood. Thus, the effectiveness can be achieved. Thus the satisfaction and well
culture of an organization acquaints employees with the being of employees can result in organizational effectiveness
firm’s history as well as current methods of operation that through silent productivity related behaviors of employs [28].
guide employees on expected and acceptable future Druckman argues that loyalty and commitment both interpret
organizational behaviors and norms [14]. Effective human an emotional bonding between the individual and his or her
resource system is based on supporting values that create a cultural group and, as such, imply a willingness to put forth
positive impact on employees’ attitudes and behaviors which exertion and make sacrifices on behalf of that group [10].
in turn influence their performance [11]. From numerous O’Reilly suggests that employee’s commitment to an
“culture surveys” it has been claimed that employee organization will be more dedicated because they care about
performance can be improved by developing and creating their organization’s fate, and their caring heightens the power
certain kinds of organizational cultures [35]. Organizational of organizational norms to control their behavior [32]. Daft
culture is theoretically related to performance and has that Organizations Culture can play an important role in
positive influence on it [24]. Bowen & Ostroff observed the creating such an environment that enables learning and
role of culture in nurturing, sustaining and enhancing innovative response to challenges, competitive threats, or
employees’ performance in organizations [27]. new opportunities. Thus, creating and influencing an
Organizational culture aids coordination of assignments and adaptive culture is one of a manager’s most important jobs
minimizes inefficiency in resource utilization. Employees [6]. The authors Meyer, Stanely, Hercovitch & Topolnytsky
need a supportive organizational culture to attain their conducted meta-analyses to assess relations among affective,
individual objectives [17]. Organizational culture functions continuance, and normative commitment to the organization
as the internal integration and coordination between a firm’s [26]. They found that the three forms of commitment are
operations and its employees, where it fails to fulfill these related yet distinguishable from one another as well as from
functions to a satisfactory level, employees may be job satisfaction, job involvement, and occupational
influenced negatively [12]. A positive culture supports commitment [26]. Motowidlo & Van Scotter proposed two
adaptation and enhances employees’ performance by dimensions of employee performance. Task performance (or
motivating, shaping and channeling their behaviors towards technical job performance) is the behaviour associated with
the attainment of corporate objectives [6]. A firm’s mission maintaining and servicing an organization's technical core.
 American Journal of Engineering and Technology Management 2017; 2(5): 72-76 74

Contextual performance (or interpersonal job performance) is h. Positive organizational culture provides satisfaction,
a function of one's interpersonal skill knowledge that positive attitude, mutual trust, autonomy, good
supports the broader social environment in which the communication which results superior employee
technical core must function [27]. Organizational culture too, performance.
plays an important role in generating commitment and i. Organizational culture helps to keep employee
enhancing performance [7, 21, 33]. In particular, studies in motivated and loyal to the management of the
various industries and countries showed that innovative and organization, they make employees eager to contribute
supportive cultures had strong positive effects on to the organizations success and feel them sense of
commitment and job satisfaction, while bureaucratic cultures accomplishment.
had a negative impact [3, 4, 5, 19, 20, 21, 22, 34, 41, 45, 46, j. Organizational culture enables employees to perform at
47]. Yousef also investigated the role of organizational their best to earn recognition & appreciation from their
commitment as a mediator of the relationships between superiors which in turn increases the quality of their
leadership behaviour with job satisfaction and performance, work & enhances their performance.
specifically in a multicultural, non-western country. Results k. Organizational culture plays an important role in
from various organizations in the United Arab Emirates creating environment of learning, innovative response
suggest (in support of many western studies) that those who to challenge competitive threats & new opportunities
perceive their superiors as adopting consultative or which ultimately enhances employee’s performance.
participative leadership behaviour are more committed to l. Organizational culture should be affective,
their organizations, more satisfied with their jobs, and their continuance, and normative job satisfaction, job
performance is high [47]. According to Tanase organizational involvement, and occupational commitment.
culture is an Issue of Escalating importance when structural m. Organizational culture plays an important role in
changes like downsizing, merging & restructuring occurs generating commitment and enhancing performance.
which leads to increase in complexity and unpredictability of
the fast changing external environment. He continues that 4. Recommendations & Conclusion
understanding, assessing and managing organizational
culture can help the organizations to achieve both stability 4.1. Recommendations
and adaptability [42]. Organizational Culture as a more or
less shared way of being, thinking and acting of a collective Every individual has different culture and beliefs that
of people in coordination with reciprocal expectations & that he/she works with and when he/she joins an organization that
provide some predictability with certain specific in each has a completely different culture and beliefs from his own,
organization [40, 44, 38, 25]. he/she should be allowed to internalize himself first with the
organization’s culture and values to know whether he/she can
manage with them or not. It is the ability of the employee to
3. Findings cope with the organizations culture that will determine how
Findings of the study are as follows: he/she will perform on his job. Organizational culture must
a. Organizational culture provides employees with a sense be binding on all member and employees of the organization
of guidance, direction & expectations that keep as this will encourage uniformity among employees of the
employees on task & make them understand about their organization and thus enhance commitment and group
role and responsibilities. efficiency. In cases where an organizational culture must be
b. Organizational culture creates a positive impact on changed, employees must first of all be notified and made to
employee’s attitude & behavior and in turn employees learn the modification of the old culture as this will affect
accomplish task prior to established deadlines. their performance positively.
c. Organizational culture helps to unite employees of 4.2. Conclusion
different demographics, promote better understanding,
better coordination & less conflict. In this study it was tried to look at the effect of
d. Organizational culture aids coordination of assignment organizational culture on employee’s performance with
& minimizes inefficiency in resource utilization. evidence of various related literatures. A good organizational
e. Organizational culture enables internal integration & culture always considered the employees as an integral part
coordination between companies operation & its of the growth process of the organization. An organization
employees so that employees can influenced positively. fosters the employee commitment towards the organization.
f. Organizational culture enhances employee’s performance Employees align their goals and objectives with
by motivating, shaping & channeling their behavior organizational goals and feel responsible for the overall well-
towards the attainment of organization’s objectives. being of the organization. As their efforts are in turn
g. Organizational culture shows clear sense of purpose & appreciated by the management and suitably rewarded, and
commitment towards organization mission which they have immense job satisfaction. In such organizational
enhances employee’s performance towards goal cultures, the employees are committed to achieving their
attainment. goals and thus have a positive effect on the overall
75 Ananta Narayana: A Critical Review of Organizational Culture on Employee Performance

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