Have you ever worked for an organization where it felt like no one cared about you and your contribution was always minimized? The message emanating throughout such an institution consists of fear and intimidation. Each employee dreads every workday, and very few go beyond what is required to do their jobs.

Three workplace parameters form four specific organizational cultures. These four cultures, in turn, set the stage for the development of a financial model of organizational culture (FMOC). This model enables organizations to predict financial performance based on their culture, with the goal of developing a course of action to improve the organization’s culture and, more importantly, financial performance.

Organizations with cultures that focus on their people and invest in their future will, in the long run, achieve a higher level of financial success than cultures that view employees as mere costs to be reduced in times of trouble.

Three Workplace Parameters

An organization has three common elements: people, a goal or purpose, and a struc­ture (created by its members) that defines and limits individual behavior. Put simply, without these elements, there is no organization. Of the elements of an organization, people constitute the most important factor, because without them, the other two elements cease to exist.

Once the three elements are brought together to form an organization, a culture develops that influences every aspect of the production process. The culture is defined by three workplace parameters:

1. The attitudes and practices of management can be assessed by the overall degree of trust or lack of trust between managers and non-managers. The right managerial attitude can breathe life into a management philosophy or culture that will boost the chances of organizational success by establishing a workplace environment in which individuals want to consistently perform at their best.

2. The organizational environment can be assessed by the internal politics and level of favoritism within the organization. A highly politicized work environment will undermine productivity. Any organization that fails to base performance and compensation on merit will drift into mediocrity and possibly face extinction in a competitive environment. Merit must be rewarded, and favoritism must be discouraged.

3. The tasks being performed within an organization can be assessed by asking whether a task has meaning for an individual. In many organizations, employees do not understand how their work contributes to the organization’s goals and vision.

The Financial Model of Organizational Culture (FMOC)

Everything else remaining equal, the FMOC links the culture of an organization with its financial status. The model also provides management with a methodology to improve the financial status of their organization by adopting a philosophy that fosters a type “A” or “B” organizational culture.

The FMOC Model, the “People Factor” and Employee Training

At the core of the FMOC lies a common thread that binds each of the three critical workplace parameters together. This common thread ultimately determines whether an organization will possess an A, B, D or F culture and therefore its level of financial success.

The people element is the most important factor in any organization. The quality and attitudes of the people in an organization set the stage for its accomplishments. An organization that invests in its employees will achieve a higher level of financial success.

Put simply, the employees make the difference between organizational success or failure. What influences the quality of the employees is the training provided to them.

Management’s Commitment to Training

From a practical perspective, leaders’ commitment to training hinges on whether they believe that it will produce or improve products and/or services. Training significantly adds to the output value of a product or service when it’s directly linked with the strategic objectives set by management. If training is linked to organizational strategy, it encourages managers to support the training.

Another variable that influ­ences management’s support for training is the degree to which the training has been proven to enhance employee pro­ductivity and performance. Using these variables, we can develop an equation to capture management’s commitment to training:

M=a+b

Where:

• M is management’s support for training (up to 1, or 100%)
• a is the degree to which training is linked with the strategic objectives set by management (on a scale from 0 to 0.5)
• b is the degree to which training has been proven to enhance employee productivity and performance (on a scale from 0 to 0.5)

In sum, to understand organizational per­formance, we must understand the people factor. The quality of an organization’s people at all levels determines organizational success or failure, because an organiza­tion is nothing more than the system(s) that its members created, and the superiority of any creation ultimately depends on the abilities of its creator(s). At the core of any organization’s success is the quality of its members.