Why should you create a positive work culture?

‘Being a great place to work is the difference between being a good company and a great company.’? — Brian Kristofek, President and CEO, Upshot

Many businesses rely on a fierce, intense culture to achieve financial success. However, research in positive organisational psychology indicates that such an environment not only harms productivity in the long run but also that fostering a positive workplace yields significant advantages for all stakeholders, including employers, employees, and financial outcomes.

While it's commonly believed that stress and pressure drive employees to excel, cutthroat organisations overlook the concealed expenses associated with this approach.

First, healthcare expenditures at high-pressure companies are nearly 50% greater than at other organisations. The American Psychological Association estimates that more than $500 billion is syphoned off from the U.S. economy because of workplace stress, and 550 million workdays are lost each year due to stress on the job. 60% to 80% of workplace accidents are attributed to stress, and it’s estimated that more than 80% of doctor visits are due to stress. Workplace stress has been linked to health problems ranging from metabolic syndrome to cardiovascular disease and mortality.

The stress of belonging to hierarchies itself is linked to disease and death. One study showed that the lower someone’s rank in a hierarchy, the higher their chances of cardiovascular disease and death from heart attacks. In a large-scale study of over 3,000 employees conducted by Anna Nyberg at the Karolinska Institute, results showed a strong link between leadership behaviour and employee heart disease.

Stress-producing bosses are bad for the heart.

Second is the cost of disengagement. While a cutthroat environment and a culture of fear can ensure engagement (and sometimes even excitement) for some time, research suggests that the inevitable stress it creates will likely lead to disengagement over the long term. Engagement in work—which is associated with feeling valued, secure, supported, and respected—is generally negatively associated with a high-stress, cutthroat culture.

Disengagement is costly.

Studies by the Queens School of Business and the Gallup Organisation found that disengaged workers had 37% higher absenteeism, 49% more accidents, and 60% more errors and defects. Organizations with low employee engagement scores experienced 18% lower productivity, 16% lower profitability, 37% lower job growth, and 65% lower share price over time. Importantly, businesses with highly engaged employees enjoyed 100% more job applications.

Lack of loyalty is a third cost. Research shows that workplace stress leads to an increase of almost 50% in voluntary turnover. People go on the job market, decline promotions, or resign. The turnover costs associated with recruiting, training, lowered productivity, lost expertise, and so forth are significant. The Center for American Progress estimates that replacing a single employee costs approximately 20% of that employee’s salary.

Due to these considerations, numerous companies have introduced various benefits, ranging from remote work options to on-site fitness facilities. Nevertheless, these organisations often overlook the insights provided by research.

A Gallup poll showed that, even when workplaces offered benefits such as flextime and work-from-home opportunities, engagement predicted well-being above and beyond anything else. Employees prefer workplace well-being to material benefits.

Well-being stems solely from a positive culture.

‘A hallmark of a healthy creative culture is that its people feel free to share ideas, opinions, and criticisms. Lack of candour, if unchecked, ultimately leads to dysfunctional environments.’? — Ed Catmull, President of Pixar

Creating a positive and healthy culture for your team rests on a few major principles. Research done by Harvard Business Review on the qualities of a positive workplace culture boils down to six essential characteristics:

• Caring for, being interested in, and maintaining responsibility for colleagues as friends.
• Providing support for one another, including offering kindness and compassion when others struggle.
• Avoiding blame and forgiving mistakes.
• Inspiring one another at work.
• Emphasising the meaningfulness of the work.
• Treating one another with respect, gratitude, trust, and integrity.

As a Manager/ CEO, how can you foster a positive work culture?

Research studies done? by Harvard Business Review suggests the following 4 tips:

1. Foster social connections

Numerous empirical studies validate that positive social interactions in the workplace yield numerous beneficial outcomes. These include reduced sickness rates, faster post-surgery recovery, decreased levels of depression, enhanced learning and memory retention, improved pain tolerance, heightened mental sharpness, and enhanced job performance. Conversely, research by Sarah Pressman at the University of California, Irvine, found that the probability of dying early is 20% higher for obese people, 30% higher for excessive drinkers, 50% higher for smokers, but a whopping 70% higher for people with poor social relationships. Toxic, stress-filled workplaces affect social relationships and, consequently, life expectancy.

2. Show empathy.

As a manager, your influence significantly shapes your employees' emotions. A revealing brain-imaging study discovered that when employees recollected an unkind or unsympathetic manager, there was heightened activity in brain regions linked to avoidance and negative emotions. Conversely, recalling an empathic manager produced the opposite effect. Moreover, Jane Dutton and her colleagues in the CompassionLab at the University of Michigan suggest that leaders who demonstrate compassion toward employees foster individual and collective resilience in challenging times.?

3. Go out of your way to help.

Have you ever had a manager or mentor who went out of their way to assist you, even when it wasn't required? It's likely that you still hold loyalty towards that person. Jonathan Haidt's research at New York University's Stern School of Business reveals that when leaders demonstrate not only fairness but also self-sacrifice, their employees feel moved and inspired to reciprocate with increased loyalty and dedication. Consequently, they are more inclined to extend helpfulness and friendliness to their colleagues, thus initiating a positive feedback loop. Daan Van Knippenberg from the Rotterdam School of Management demonstrates that employees under self-sacrificing leaders exhibit higher levels of cooperation due to increased trust in their leaders. Additionally, they tend to be more productive and perceive their leaders as more effective and charismatic.

4. Encourage people to talk to you – especially about their problems.

It's unsurprising that when employees trust that their leader genuinely cares about their well-being, their performance improves. This trust fosters a sense of safety rather than fear. According to Amy Edmondson's research at Harvard on psychological safety, cultivating a culture where leaders prioritize inclusivity, humility, and openness to staff input or assistance leads to enhanced learning and performance results. Instead of fostering a culture of fear and potential repercussions, feeling secure in the workplace promotes a willingness to experiment, which is crucial for fostering innovation. Kamal Birdi of Sheffield University has shown that empowerment, when coupled with good training and teamwork, leads to superior performance outcomes whereas a range of efficient manufacturing and operations practices do not.

When you know a leader is committed to operating from a set of values based on interpersonal kindness, he or she sets the tone for the entire organisation

In his book "Give and Take," Adam Grant illustrates that leaders' kindness and generosity strongly correlate with the effectiveness of teams and organisations. While harsh work environments are associated with poorer employee health, positive work climates contribute to lower heart rates, blood pressure, and stronger immune systems among employees. A positive work climate cultivates a favourable workplace culture, enhancing commitment, engagement, and performance. Content employees contribute to a more pleasant work environment and elevate customer service quality. Consequently, a workplace characterised by happiness and compassion enhances employee well-being and productivity and positively impacts client health outcomes and satisfaction.

In conclusion, a positive workplace proves more enduringly successful by fostering increased positive emotions and well-being. This, in turn, enhances interpersonal relationships and magnifies individuals' capacities and creativity. It serves as a protective shield against negative experiences like stress, improving employees' resilience in facing challenges and bolstering their overall health. Additionally, it attracts and retains employees, fostering loyalty to the leader and the organisation while eliciting their optimal strengths. When organisations cultivate positive and virtuous cultures, they achieve notably elevated levels of organisational effectiveness, encompassing financial performance, customer satisfaction, productivity, and employee engagement.

What are you doing to train your managers to enable positive work cultures?

We have developed leaders at Honasa Consumer Ltd. , Wholsum Foods (Slurrp Farm and Millé) , Benori , Tata 1mg and others. Reach out and let us bring our Emerging Leaders Program to your organisation.

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