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SME Culture and Employee Performance

How a Great SME Culture Drives Employee Performance

With so much emphasis on employee wellbeing and social responsibility, establishing a positive company culture has never been so important. It also happens to be a strategic objective with different types of challenges, depending upon the size and type of business.

In a large company with different departments and locations, different types of culture can become established, leaving the challenge of changing and aligning culture across the whole company. In SMEs, the danger lies more in relying upon close personal working relationships or dominant personalities to define the company culture.


Why company values matter

Values matter as much to employees as they do to customers. Many companies proudly emphasise their own list of company values on their website and social media - but do they really live them?

If you think of values as an 'add-on' to what the company does, no amount of well-meaning words will make a difference to your staff or the company's success. The right corporate culture sets the standards for behaviours and makes it easier for companies to attract the right people to work for them.

The Chartered Management Institute (CMI) supports the idea that there is a clear relationship between employee engagement and organisational values. If companies can create a positive culture, employees will likely demonstrate higher levels of performance, more development in their knowledge and skills, and increased team morale.

Research has indicated that there are proven benefits of setting the right company culture. HR Magazine reported on research conducted by BreatheHR and the CMI that shows poor company culture causes damage and good company culture helps small businesses to flourish. Some statistics from the article are as follows:

  • Poor company culture costs the UK economy £23.6 billion each year
  • Effective leadership could improve UK productivity by 23%
  • 44% of employees cited improved morale and relationships as a benefit of positive company culture.





A positive company culture: getting strategic

The first step to cover is: what kind of culture do you need to drive future success? This question can be answered by analysing the demands of the market in which the company operates.

Does your business operate in a fast-paced industry where it needs to demonstrate its innovation? In that case, a culture that embraces employee empowerment will increase confident decision making across staff teams and encourage positive responses to change.

On the other hand, a company that operates in a market where history or heritage is important to customers may opt to encourage a culture where employees emphasise quality and develop skills in traditional production methods.

In general, though, a successful company culture strategy will incorporate the following elements:

  • A clear definition of what your company stands for (values, vision and mission). Documenting this in a well-established EVP available to prospective and current employees
  • How leaders will set expectations on behaviours and act as role models - this is particularly important in SMEs, where bosses have such a direct impact upon working relationships
  • A plan on how to recruit people who will fit with your company's culture
  • A plan on how to retain those same people through reward, recognition, and wellbeing initiatives
  • A vision of what a positive working environment looks like (the physical environment, flexible working, etc)
  • How people will communicate with each other
  • How the company will consult with employees as they drive forward their corporate culture.


When it comes to establishing an EVP (Employee Value Proposition), expert input will ensure a comprehensive and thorough result that will attract and retain the right employees for the business.

Our EVP Development resource provides businesses with a specialist approach to achieve this and is why we include it as part of our Talent Partnerships.