Rethinking Culture Will Boost Employee Engagement

Rethinking Culture Will Boost Employee Engagement

Company culture is one of the most powerful drivers of employee engagement, and one of the most misunderstood. The evidence is striking. A landmark MIT Sloan analysis of 1.4 million employee reviews found that a toxic culture is roughly 10 times more predictive of attrition than compensation; in that study, low pay ranked about sixteenth among the reasons people quit. Culture, in other words, does more to keep or lose your people than almost anything else, including salary. And it shows up in engagement, too: employees who feel a strong sense of belonging are about three times more likely to be engaged, and those who feel genuinely connected to their culture are far less likely to be job-hunting.

So ‘rethinking culture’ is worth doing. The trouble is what that phrase usually comes to mean: new perks, a values poster, a foosball table, a fresh slogan. Real culture is something harder and more valuable than any of that, and the way you actually change it is not what most ‘culture initiatives’ assume. Here’s what genuinely moves it.

You can’t decree culture

Start with the most important and least comfortable truth: culture is not something you can announce. It isn’t the values on the website or the benefits in the handbook; it’s the accumulated pattern of how people actually behave, above all how leaders behave and what the organization genuinely rewards, tolerates, and punishes. A company can post ‘respect’ and ‘collaboration’ on the wall while promoting the abrasive top performer and ignoring the quiet one who lifts everyone around them, and everyone learns, instantly, what the real culture is. That’s why culture change is real work rather than a rebrand: you change it by changing behavior and consequences, not by changing the messaging. If your culture and your stated values don’t match, people believe the culture every time.

First, remove toxicity, then build safety and respect

Because toxic culture is the single strongest predictor of people leaving, the highest-return cultural work is usually subtraction, not addition: finding and fixing the disrespect, exclusion, unethical behavior, and abusive management that drive good people out. Roughly 95% of employees say feeling respected at work matters, and a lack of it is corrosive. Once the toxicity is addressed, the thing to build is psychological safety, the shared sense that it’s safe to speak up, take a risk, disagree, and be yourself, which research repeatedly identifies as the common denominator of healthy cultures. It’s also under strain: only about 41% of employees now feel they can be their full selves at work, down from around 66% in 2020. Trusting people with autonomy and flexibility, communicating openly, and making it genuinely safe to raise concerns do more for culture than any perk.

Make your values real

Defining your values still matters, but only as a starting point; the entire value is in whether they’re lived. A clear, shared understanding of what the company stands for helps people connect their work to something larger, and it should align with what the brand genuinely is rather than a marketing aspiration. But stated values that leadership visibly doesn’t follow do more damage than having none, because they teach people the organization doesn’t mean what it says. So the real test isn’t whether you’ve written the values down; it’s whether your decisions, your promotions, and what you reward and tolerate reflect them. Recognition is a powerful tool here: when you consistently and genuinely recognize the behaviors that embody your values, you reinforce the culture you want in the most credible way there is, by celebrating it in action.

Measure it honestly, give it time, and mind the fundamentals

Track cultural health so you’re working from evidence rather than assumption: retention, engagement, belonging, and the quality of manager relationships, gathered through surveys and genuine listening (used to understand and support people, not to surveil them). Then be patient, because culture shifts slowly through consistent behavior, not overnight through an initiative. Two honest caveats keep this grounded. First, culture sits on top of the fundamentals, not instead of them: for underpaid and frontline workers especially, fair pay and predictable scheduling are the floor (the same MIT Sloan work found that more predictable schedules reduce frontline quitting), and no culture initiative substitutes for them. Second, the manager is central; with roughly 70% of the variance in team engagement attributable to managers, and only about 44% of them formally trained, developing your managers is often the most direct way to change the culture their teams actually experience.

The bottom line

Rethinking culture genuinely will boost engagement, but only if it means substance rather than slogans. Remove the toxicity that drives people out, build the psychological safety and respect that all healthy cultures share, live your values instead of just publishing them, develop the managers who shape each team’s daily experience, and use recognition to celebrate the behaviors you want more of. Keep it grounded in fair pay and honest fundamentals, measure it, and give it time. Do that, and culture stops being a poster on the wall and becomes what it should be: one of the few durable advantages a company has, a place people actually believe in and don’t want to leave.

See it in action

Rewardian helps teams design recognition and incentive programs that drive engagement, performance, and retention. Request a demo to see how.