Do Employees really understand and embody your core values?

Studies show that there is a critical gap in the understanding of organizational core values, which results in a lack of embodiment of your guiding principles.

The need for Core Values

“Effectiveness without values is a tool without a purpose.” — Edward de Bono, a famous author & inventor [1]

Core values are the guiding principles that serve to guide both the employee and the company in achieving their mutual goals in a manner based on an ethical and ideological framework [1]. They help define how a company should behave in business, and perhaps beyond if they have an additional mission to serve the community [2]. They are usually expressed in the corporation’s mission statement.

Core values help companies determine if they are on the right path and fulfilling their goals by creating an unwavering guide [2]. Our study measured how well core values are understood and embodied in various organizations.

Our Study & Results

We collected survey results from 592 employees across four companies, with the following questions:

Do you understand our company’s core values?
On a scale of 0 to 10, how well do we embody our core values?
In what way do we embody our core values very well?
In what way do we not embody our core values well enough?
Which of our core values do you feel most aligned with? Why?
Which of our core values should we be paying more attention to?
Do the actions of your managers and leaders align with our core values?
Are you willing to confront someone who clearly is not following our core values?

When asked if they understood their company’s core values, 92% of respondents said yes. The Likert question, “on a scale of 0 to 10, how well do we embody our core values?” produced a median score of 8. The results suggest that employees are aware of their organizational values, but there is room for improvement.

Measuring Misalignment

To gain insight into how well core values are understood, we looked at responses from two open-ended questions: “Which of our core values do you feel most aligned with? Why?” and “Which of our core values should we be paying more attention to?” For one company, our qualitative analysis found that 69% of employees did not understand the organization’s core values even when 83% had responded “Yes” to the question “Do you understand our company’s core values”? This misalignment strongly suggests that the core values are not well understood. Here we provide five tips to make your core values more practical and inspirational, as shown below.

Five ways to ensure your organization has core values are practical, inspirational, and employees stick to the core values. [3]

Create core values that make your organization stand apart from the rest
Make core values short and easy to understand
Communicate, support, and reinforce your core values with your employees regularly
Encourage employees to follow the core values
Recognize employees who achieve goals that align with your core values

Case Study

Happily.ai helps companies communicate to, reinforce, and recognize employees whose actions align with company core values. Leadership Medals are customized and awarded to employees regularly and become an achievement displayed in their profile.

We compared companies that used and did not use Leadership Medals to study the differences in understanding, alignment, and embodiment of organizational core values.

Company A customized Happily Leadership Medals to match their core values and encouraged their leaders to award employees who performed actions aligned with core values.

Company B does not have clearly defined core values, did not customize Happily Medals, and does not regularly reinforce its core values. We find this to be the case for most organizations.

We studied how core value alignment (see “Measuring Misalignment”) ties in with each company’s eNPS (employee Net Promoter Score) score, an indicator for engagement and ambassadorship. Company A and Company B’s core value alignments are 96% and 32%, and eNPS scores are 27 and 10.

Company A awarded 313 and Company B awarded 6 leadership medals over the past 6-months.
Over this period, 66% of Company A’s employees received medals, while only 1% of Company B’s employees received ones.
Company A’s core value alignment is present at a rate of 3x higher than Company B.
Company A’s eNPS score is 2x higher than the industry benchmark score of 13 [4], while Company B scored below.

DNA of the organization’s culture

Core values are the DNA of your organization’s culture [3]; they are essential to help employees and organizations drive and thrive in the same direction. Quantitative measurements of how well core values are understood, as done in most engagement surveys, do not provide an accurate representation of how well core values are understood. Only by including qualitative analysis we can determine how aligned employees are to organizational values.

At Happily.ai, we help organizations reinforce their core values using Leadership Medals, and we encourage company leaders to participate in awarding their employees for actions that align with core values. And we do it in a way that is fun and engaging for everyone!