Are you growing the next generation of leaders at your company, or is your top talent walking out the door?

Eroding employer loyalty and weakening company culture means employees are less engaged than ever. Forty-four percent of employees are thinking about their careers in terms of months rather than years. The solution to this problem won’t come from the top down. Organizations need to go straight to the source—employees—and use their continuous feedback to catalyze true cultural change.

The link between employee engagement, culture & business success

Disengaged “quiet quitters” comprise 50% of the U.S. workforce. Put another way, at the average company, half the employees are doing the bare minimum–– is this the case at your company?

Unmotivated, disinterested and frustrated employees can have a ripple impact on organizations. It’s not just productivity that takes a hit. These employees weaken team morale, ultimately creating a toxic work environment that sends your top performers out the door.

A strong, cohesive company culture–one where employees feel ownership in their work and a deep connection to their organization’s purpose–does the opposite. According to Sherzod Odilov, Associate Client Partner, Culture, Change & Communications , “Employees are excited to do their best work, contribute ideas and innovate; driving business success. These professionals are also more loyal, helping your business to retain top performers.”

Increasingly, organizations recognize the link between employee engagement, company culture and business success. Nearly two-thirds of executives at the world’s most admired companies attribute 30% or more of their organization’s market value to culture—and one-third attribute 50% or more.

Building a strong company culture is a contemporary business imperative. But what senior leadership perceives as a thriving workplace environment may be different for employees. Understanding your employees’ daily experience of company culture is essential to maximizing its potential—and this starts with feedback.

3 steps to leverage feedback in the workplace for culture change

Here’s how the importance of feedback in the workplace should be used to build a stronger company culture—one where people thrive, feel connected to your organization’s purpose, and are excited to grow their career. It comes down to listening, acting and rewarding.

1 Actively listen

You can’t fix what you don’t know is broken. Yet some businesses continue to rely on one-off surveys or end-of-year reviews to gauge employee sentiment. Limiting feedback to these interactions is a missed opportunity. To truly understand what your employees feel, think and need, leadership needs to listen actively throughout the year. Doing so boosts employee engagement and fosters a company culture that prioritizes innovation—two keys to business success.

“When we listen to what employees are saying, we create a feeling of psychological safety that supports creative thinking,” says Sarah Jensen Clayton, Senior Client Partner, Culture, Change & Communications. “They’re less likely to worry about what happens if an idea fails, and instead feel supported to experiment. They try new things, make mistakes, and try again—that’s how breakthroughs occur.”

To foster a culture of innovation at your company, start by building a continuous feedback loop between managers and direct reports. These face-to-face conversations can take place during daily chats and weekly one-on-ones. Asking open-ended questions encourages employees to share their perspectives and can help managers explore friction points in greater depth than a pulse survey.

Some organizations have assigned talent teams to assess whether team members feel aligned with company processes, mission, and goals. For example, on a recent Korn Ferry webinar, leaders from one of Fortune’s World's Most Admired Companies explained that they use a deliberate, global feedback approach. Questions like the following guide their process: What is important to employees from a value perspective? Is the workplace experience delivering the necessary elements to build an employee's best day with the company? What needs to be true for workers to bring their best potential to the job?

Cultural Transformation

Is your culture working for or against you?

2 Act with purpose

We all know the feeling of being asked for our opinion only for nothing to change. We may feel ignored, dismissed or just plain disengaged. Why put effort into offering ideas and solutions if nothing ever comes from them? That’s how employees feel when companies solicit their feedback and then fail to share results or an action plan.

“Creating an environment where employees feel comfortable speaking up means showing that you take what they say seriously,” says Jensen Clayton. “When employees see their feedback reflected in how your business operates, that’s a powerful message about how much you value your people. And your people are your company’s greatest asset for growth.”

As you begin to analyze feedback in the workplace, consider categorizing it into “quick wins” and “long-term plans.” Look for two or three pieces of feedback you can take action on immediately. This signals to employees that their opinions matter and are being taken seriously. It also gives your organization time to develop a more comprehensive plan for feedback that requires a longer change process. Inevitably, there will be suggestions that can’t become reality. Rather than ignoring them, demonstrate that you have really considered the feedback and explain why the desired outcome won’t be possible. Look for alternative solutions or “meet in the middle” options.

3 Customize recognition and rewards

Employees are more engaged when they can see how their work fits into their organization’s big-picture goals. It’s not always easy to draw a direct line between daily tasks and a company’s purpose, however. “This is where employee recognition can make a difference,” says Odilov. “When you reward the people who are actively building your culture, you’re making a clear statement that being a culture driver–not a detractor–matters.”

Openly celebrating employees reinforces company values, showcases achievements that might otherwise go unnoticed by coworkers, and signals to all employees that their efforts matter. Jensen Clayton adds, “Employee recognition helps your people feel connected to one another and your company. The key is to do it for the right reasons and in real-time—don’t wait until the end of the year. Let people know they matter right away.”

Recognition can come in many forms and is not one-size-fits-all. Some employees may thrive when receiving public praise from a member of senior leadership or derive greater value from peer recognition. Others may shy away from the spotlight and prefer recognition in a one-on-one with their manager. The key is to be detailed, specific and prompt.

The reason for recognition matters, too. Recognition is traditionally linked to performance metrics like sales goals or tenure achievements. Don’t overlook opportunities to recognize the many actions and habits contributing to company culture, like mentoring new hires, going above and beyond on a project, or organizing an employee event.

Finally, consider that promotions and pay raises are their own form of recognition. If you extend promotions to individuals who undermine a positive work environment, you’re tacitly condoning this behavior. Promoting employees who actively contribute to a positive company culture signals that these efforts matter.

What’s next for your culture?

Every organization has a culture—whether it’s intentional or not. In an evolving talent market, don’t leave yours to chance. Employee feedback is a treasure trove of possibility. Make the most of it by listening, acting and rewarding.

For more information on how you can transform your culture, or to speak with one of our experts, contact us today.