5 Signs of a Dysfunctional Company Culture

Company culture has become a point of focus not only for job applicants who are looking for the best place to work, but also for employers who are struggling with employee engagement and retention. A company’s culture is essentially the “personality” of the company. It includes elements such as values, ethics, goals, expectations and more, defining the work environment in which employees must perform each day. There is no one right type of company culture, because what works for one company and its employees may not work for others. Some companies may thrive with a very regimented and traditional management style, while others may find success with a more casual workplace vibe.

Company culture is important to the success of the employees because they are more likely to be productive when they enjoy their workplace. Of course it’s a lot easier to enjoy your workplace when the needs and values of the company are consistent with your own. And when you bring together a group of employees with similar needs and values they tend to get a long and work together well.

The benefits of a strong company culture are quite clear. On the opposite side of the spectrum, the costs of a poor company culture are quite clear as well. When company culture is lacking, it can result in low employee engagement, higher employee turnover, diminished customer service, decreased reliability and even reputation damage to the company. Employers who encounter these issues often don’t even realize that they may be the result of a dysfunctional company culture. As more younger generations enter the workplace, the same old management styles may not be as effective as they were in past decades. Below are five signs of a dysfunctional company culture as well as ways to improve it.

1. Lack of Clear Values
It’s extremely difficult for employees to fit in with a company when there are no core values for them to refer to. Most employers have a vision for their workplace that includes the behaviors and values their ideal employees would embody. Not communicating or outlining these expectations basically sends the message that anything goes – like letting kids make their own rules at home – which is not a great foundation for a strong company culture.

2. Chain of Command
The ‘chain of command’ is a widely-used term designed to bring some organizational structure into the workplace, but it can easily turn into an authoritarian nightmare for employees. Insisting on following the chain of command can stifle employees or subject them to endure abuse from bad managers for fear of getting reprimanded if they try to go over their head to complain. Employees should be able to trust the leaders within their organization, and if one leader is indeed toxic or abusive, they should be able to report it to another leader without fear of retaliation.

3. No Collaboration
Employees want to feel like their input is valid, and that they are making real contributions in the scope of their job. A very common dysfunctional culture is when things like teamwork and collaboration are shunned in favor of doing things a certain way. This close-minded approach not only makes employees feel like they aren’t valued by their employer, but it can also hinder the company from the significant growth and innovation that typically results from trying new alternatives and ideas.

4. Micromanagement
Some leaders get caught up in managing every aspect of their employees’ jobs in an effort to try to increase productivity. However, this management style typically results in the exact opposite. Employees should have the space to manage their workload however they see fit, and as long as they maintain the expected levels of quality and productivity, the micro details should not matter.

5. No Transparency
Many leaders view transparency as a weakness, believing they might be viewed as less of an authority figure if they let their employees in on too much. And while it certainly is possible to have too much transparency, it’s equally as unfavorable as having none at all. At the very least, employees should be aware of some of “why” behind what the company is doing, in order to build their trust and commitment to the company and ensure that everyone in the company shares the same vision and goals.