The individual is always part of something bigger. We cannot ignore that much of our self-concept is shaped by the groups we belong to, influencing us through shared norms, values, symbols, practices, and even the language we use. Even in the workplace, the groups we form give rise to culture. Consequently, this raises the question of whether embracing a shared culture comes at the cost of individual identity.
Organizations often assume that a strong culture is fully unified. But the reality is that within them, smaller groups naturally develop their own ways of working, thinking, and relating, built upon the identities that distinguish them. How these microcultures create harmony or friction and impact how teams succeed is not always straightforward.
Microcultures are the distinct subcultures that emerge within the broader organizational culture. They develop their own norms, practices, symbols, and even artifacts—inside jokes, memes, or something as simple as a shared Excel template can become defining markers of a group’s identity. These microcultures form naturally, aligning with social identity theory: people seek out groups where they find shared meaning, connection, and belonging.
Instead of searching for quick solutions to the challenge of aligning employees with organizational culture, it helps to recognize the many ways microcultures shape the workplace, like how they influence rules, how employees navigate conflicting loyalties, and what happens when their values diverge from those of the broader organization. Some evolve to drive innovation, while others resist change. Even in organizations with strong oversight, certain microcultures persist in unexpected ways, and the shift to virtual work adds another layer of complexity.
Being aware of these dynamics and their underlying elements provides a starting point for viewing workplace culture in a more nuanced way and inspires the ability to recognize, respect, and learn from microcultures.
The Intersection of Personal and Social Identity in the Workplace
Our social groups shape our sense of belonging and add layers to who we are. As we move beyond national or ethnic affiliations, we find our identity in smaller, more intimate circles: the traditions of our families, the bonds with our closest friends, or even the teams we cheer for.
In the workplace, our affiliations provide a sense of purpose, self-worth, and belonging, and as individuals, we, in turn, influence the groups we belong to. This dynamic interaction creates an organic culture—one that naturally arises from our shared experiences, similarities, and commonalities (see Figure 1). However, for organizations to function effectively, some formalization is necessary. We need structure, rules, and guidelines—things like mission, vision, values, governance structures, and processes—to ensure consistency and alignment across the organization.
But here’s where it gets tricky: the moment we formalize this culture, it can become static. It’s no longer the fluid, evolving, ever-changing entity it once was. A formal culture has to be adhered to, enforced, and clarified. This leads to the assumption that people can simply conform to this collective identity when they enter the workplace.
When organizations artificially create culture, they’re essentially trying to force an answer to the question: “Who am I when I am here?” The greater the gap between “Who am I?” and “Who am I at work?” the weaker the alignment between the employee and the company’s culture.
In addition, a high workload, intergroup conflicts, constant change, or rigid procedural structures make it nearly impossible for individuals to embrace the bigger company identity. Instead of feeling connected to the whole, employees retreat into their more familiar microcultures, whether those are teams, departments, or informal social groups.
The Power and Risks of Microcultures
The various subgroups influencing our work identity can range from formal work groups and departments to more informal networks, like lunch buddies or even hobby groups. Imagine a group of employees from different departments who meet for a daily coffee break simply because they all drink decaf. Even this seemingly trivial connection contributes to a unique microculture. A microculture could be a workgroup, a department, or even smaller subgroups, like the group of people who share coffee breaks.
Microcultures allow organizations to maintain a unified culture while fostering diversity and inclusion. They provide employees with a sense of belonging beyond the overarching corporate identity, making workplaces more engaging and dynamic. Strong microcultures can boost morale, enhance collaboration, and even drive innovation as they create spaces where employees feel psychologically safe to express ideas and challenge norms.
However, there is a risk. Given the number of groups we belong to, our social identity becomes a complex and sometimes intricate puzzle. This multiplicity of roles often leads to role conflicts. Imagine an HR professional deeply invested in supporting their employees. They work closely with individuals from various departments, each with different values, priorities, and experiences. Now, suppose this HR professional wants to give raises to all employees based on merit, but the financial department has a strict budget and is hesitant. This creates a potential conflict: the HR professional’s desire to reward the team clashes with the financial constraints imposed by the company. But it goes deeper. The HR professional happens to be close friends with a member of the finance team, and they share a passion for veganism. Outside of work, they bond over their shared values, but within the office, their professional identities create friction between them.
In moments like these, employees are torn between their personal values and professional duties. This is the role conflict that arises from belonging to different groups, each with its own set of values, goals, and identities. The workplace is full of these competing dynamics, and sometimes, navigating them feels like juggling multiple versions of ourselves.
The reason is that microcultures are never neutral. Every microculture, no matter how positive, naturally creates a distinction between insiders and outsiders—an us vs. them dynamic. In the workplace, this often means that the broader organization itself becomes the “them.” Microcultures form around shared values, practices, or grievances, which can sometimes put them at odds with company-wide policies, leadership decisions, or the overarching corporate culture. Moreover, the meaning of concepts, goals, and behaviors can shift significantly from one microculture to the next.
When microcultures are healthy, they strengthen teams, enhance engagement, and improve retention. But when they feel threatened—whether by restructuring, policy changes, or leadership decisions—the fallout can be catastrophic. If left unaddressed, these tensions can lead to communication breakdowns, high turnover, low morale, decision-making paralysis, and workplace divisions.
Stop Fixing, Start Understanding
The instinct in organizational culture work is often to jump straight to solutions: to standardize, formalize, and proceduralize. But microcultures don’t work that way. They can’t be managed through another corporate initiative, another checklist, or another best practice borrowed from a different company. The biggest mistake organizations can make is assuming that what worked once will work again or that a single approach will fit all microcultures.
So before trying to “fix” microcultures, stop. Observe. Listen. Shift from doing to being aware.
Rather than forcing integration, start by understanding how microcultures naturally emerge and function. Instead of prescribing engagement tactics from the top, pay attention to where people already feel engaged. What keeps teams together? What unspoken norms make them thrive? And where do microcultures resist, disengage, or turn toxic?
The modern workforce exists in a delicate balance between personal identity and social belonging, between choice and collective expectations. Organizations that fail to recognize this reality risk alienating employees rather than fostering connection. The most effective leaders won’t be those who impose uniformity but those who navigate complexity with curiosity, adaptability, and a deep respect for the different identities that shape their organizations.
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Editor’s Note: This article was originally published in Performance Magazine Issue No. 32, 2025 – Employee Performance Edition.
Return-to-Office (RTO) mandates gained momentum throughout 2024, with major corporations advocating for in-person work under the premise of boosting productivity and strengthening workplace culture. Heading into 2025, tensions were rising, employee backlash was growing, and yet another wave of resignations seemed inevitable.
This shift comes after nearly five years of remote and hybrid work becoming the norm. During this period, employees embraced flexibility and autonomy, while organizations adapted by developing new work models to meet evolving needs. Yet, as companies like Amazon, X (formerly known as Twitter), and JPMorgan enforced stricter RTO policies, requiring employees to be in the office full-time or for a set number of days per week, one question remains: Are these mandates genuinely focused on strengthening workplace culture?
RTO Policies: Culture-Driven or Control-Based?
A Society for Human Resource Management (SHRM) survey found that the stated top drivers of RTO include the need for in-person teamwork (75%), workplace culture and engagement (69%), leadership preferences (65%), restoring normalcy and routine (54%), and concerns about productivity (41%). Similarly, a Resume Builder study revealed that among the companies increasing office days, 86% believe it will boost productivity, 71% see it as essential for company culture, 57% aim to improve employee well-being, and 55% seek to enhance retention.
Despite these justifications, many employees remain resistant to RTO, seeing it as a disruption to flexibility rather than a cultural benefit. Making matters worse, a research study published in the S&P Global Market Intelligence Research Paper Series found that many managers admit they based RTO decisions more on intuition rather than data, further weakening employee buy-in. The consequences are already visible.
Several studies have examined the impact of RTO mandates on employee satisfaction, corporate culture, and business outcomes. The same research study found that RTO mandates negatively impact employee satisfaction in areas such as work-life balance, perceptions of top management, and overall corporate culture. In fact, the decline in employee perception of corporate culture challenges the claim that RTO policies strengthen it.
Moreover, the study found no significant improvements in firm performance, whether measured by profitability or stock market valuation, following the implementation of RTO policies. If the goal of RTO is to drive better business outcomes, the evidence does not support its effectiveness.
Beyond culture and performance, another analysis from the same research series reveals that RTO mandates also directly impact talent retention. On average, companies enforcing RTO see a 13% increase in turnover, with women leaving at nearly three times the rate of men. More senior employees are also more likely to exit, and it now takes firms 23% longer, or approximately 12 extra days, to fill positions post-RTO.
These results highlight the growing concern that RTO policies may cost firms their most valuable talent instead of strengthening their culture.
Productivity Focused on Performance, Not Presence
Delving into productivity, despite the push for RTO, data does not support the notion that in-person work equals better productivity. According to Microsoft’s Work Trend Index, 85% of business leaders say that the shift to hybrid work has made it difficult to assess employee productivity. Yet, there is a significant disconnect between leaders’ confidence in their teams’ productivity (only 12%) and employees’ self-assessment (87% feel productive).
Furthermore, many managers struggle with remote work dynamics, expressing doubts about their ability to effectively oversee employees outside the office. This so-called “productivity paranoia”, as mentioned in Microsoft’s Work Trend Index, has led organizations to focus on tracking visibility rather than actual impact. However, in organizations with worldwide ecosystems, I believe managing productivity through visibility is an outdated management mindset that no longer holds up.
To move past performative work habits, such as the “green status effect” or “productivity theater“, organizations need to shift toward results-driven performance management systems. Frameworks like the balanced scorecard (BSC) or objectives and key results (OKRs) provide structured ways to set clear expectations. When productivity is measured by outcomes, employees are empowered to be more accountable, engaged, and focused on achieving results.
Similarly, leaders must recognize that simply mandating a return to the office won’t automatically improve culture or engagement. Instead, intentional efforts are required to foster a strong company culture that boosts productivity, engagement, and job satisfaction, regardless of the teams’ work settings.
Some companies have successfully redefined their work models to balance flexibility with cultural cohesion. Airbnb’s flexible work model is a great example of how a company can adapt to the evolving work landscape without sacrificing culture or productivity. Airbnb has embraced flexibility by allowing employees to work from home or the office—and even relocate within their country without a pay cut. Rather than enforcing rigid office attendance, the company prioritizes meaningful in-person interactions through regular team gatherings, offsites, and social events designed to foster collaboration, connection, and creativity. These interactions are not about physical presence for its own sake but about creating valuable connections and deepening the sense of belonging.
Similarly, Dropbox’s Virtual First model strikes a balance between a remote-first approach and strategic in-person collaboration. While the company primarily operates remotely, it schedules quarterly sessions for team-building, brainstorming, and strategic planning. This approach ensures that creativity and community-building remain strong, even in a distributed workforce.
The aforementioned models show that with strategic in-person touchpoints, companies can maintain a strong culture without sacrificing flexibility. The evidence so far suggests that RTO mandates have not produced the cultural and productivity improvements many leaders expected. While it is still too early to predict the long-term impact of these policies, one thing is clear: returning to the traditional office model disregards the progress made in workforce management in the past five years.
A one-size-fits-all approach no longer aligns with the modern workforce. Organizations that recognize this shift and offer employees the flexibility to choose how they work best will be better positioned for long-term success. Moreover, fostering a strong company culture requires more than just physical presence—it demands intentional efforts to build engagement, trust, and a sense of belonging.
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Editor’s Note: This article was originally published in Performance Magazine Issue No. 32, 2025 – Employee Performance Edition.
Being a jack of all trades and a master of none used to put professionals at a disadvantage. But in today’s dynamic employment landscape, individuals with a diversified skill set are sharing the stage with specialists. Enter the age of the skills-first approach.
The skills-first approach is a transformative solution to employment challenges across the board. Removing traditional qualifications, such as academic requirements, could create a more inclusive labor market and empower individuals regardless of country, race, and gender—all while addressing global unemployment and labor shortages.
At the corporate level, embracing a skills-first approach allows companies to expand their talent pool and match candidates to the specific skills required for a job posting, as reported by LinkedIn in “Skills-First: Reimagining the Labor Market and Breaking Down Barriers 2023.” Moreover, the shift could increase a company’s chances of reaching financial targets by 63%, according to findings from the World Economic Forum (WEF) in “Putting Skills First: A Framework for Action.”
Here are the action areas for organizations based on the World Economic Forum’s proposed initial framework for systematically implementing skills-first practices:
Identify current and future skills needs and gaps and map skills to work tasks.
Articulate skills needed in job descriptions, and leverage and recognize innovative skills assessment methods.
Co-develop and co-deliver skills-based training programs with industry, learning providers, and government.
Boost lifelong learning and access to skills-based learning opportunities.
Create skills-based pathways for development and redeployment.
The WEF’s data also shows that a skills-first approach could enable over 100 million people to fully utilize their capabilities across different global economies. Furthermore, the WEF suggests that a wide variety of individuals will benefit, including those whose jobs are becoming obsolete as a result of advances in technology as well as people from different walks of life, including migrants and refugees who are struggling to be recognized in their host countries, parents and caretakers who have taken breaks to support their families, and people with disabilities who have face discrimination when it comes to showcasing their skills.
The spreading movement appears to be a relevant response to the findings of the WEF’s Future of Jobs Report for 2023, which underscores the urgency for businesses to address the skills gap as they compete to fill “the jobs of tomorrow.”
The game plan for workers is clear: Gain competencies for their preferred job or industry or choose from today’s most in-demand skills and build a “portfolio of skills”. According to LinkedIn’s data, since 2015, the skills that employees need for a specific job have changed by about 25%, and by 2027, that figure is projected to double.
Adopting a skills-first strategy will trigger changes in different areas of an organization, from talent development to performance measurement. It will amplify the call for a holistic approach to implementing employee performance management systems.
It is important to keep in mind that while employers are seeking candidates with abilities akin to a Swiss Army knife, it is equally important for these individuals to continuously learn and ensure that each of their tools is finely tuned to function effectively.
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Editor’s Note: This was originally published in Performance Magazine Issue No. 28, 2024 – Employee Performance Edition.
“An organization’s ability to learn and translate that learning into action rapidly is the ultimate competitive advantage.” This insight from General Electric (GE) Chairman and CEO Jack Welch captures a fundamental truth in today’s fast-paced business environment—where a strong performance culture rooted in continuous improvement can drive innovation and adaptability. Several studies consistently show the tremendous benefits of such a culture across various areas of business, from performance to innovation, and trends further validate this.
Personalized development plans are the result of performance culture, empowering employees to grow within inclusive, diverse, and tech-enabled ecosystems. Leading firms are also leveraging hybrid learning models tailored to individual and organizational needs, making education an integrated, adaptive journey crucial to business agility and innovation.
Meanwhile, employees in high-performing organizations are encouraged to adapt and reinvent themselves by fostering an attitude of constant learning. Through the development of a growth mindset, curiosity, and an openness to failure and experimentation, experiment-and-learn environments promote personal development and progress. An example of this culture is Google’s 20 percent time policy, which encourages staff members to dedicate time to their own ideas. This approach contributed to the creation of innovations such as Gmail and Google Maps, among others.
Similarly, Microsoft CEO Satya Nadella’s transformation of company culture in 2014 from competitive to learning-focused further illustrates the impact of this approach. By encouraging continuous learning, fostering a growth mindset, and empowering cross-functional teams through initiatives like Microsoft Learn and Hackathons, Nadella’s leadership has led to a resurgence in both innovation and profitability.
While these trends reveal ideas that can help build a performance culture, the biggest challenge is determining what such a culture actually looks like and how to sustain it, rather than having it be just a one-off initiative. To gain clarity, an organization should rethink its approach to performance culture and continuously improve it to make sure that the right people, behaviors, and systems are in place.
According to the Global Performance Audit Unit (GPA Unit)—a division of The KPI Institute specializing in strategy and performance management system (PMS) maturity assessments—what makes developing a high-performance culture tricky is that it extends beyond strategy and performance management systems. The GPA Unit states that, “With no actual framework to lay down its fundamentals, the performance culture is a holistic impersonation of the strategy and performance management system. While more than many organizations associate a high-performance culture with the proper working environment, there is much more to the concept than a friendly office, random perks, and casual benefits.”
A performance culture is characterized by solid employee engagement, continuous learning and development, an aligned performance management system, inclusive environment and workforce diversity, effective leadership and relationship management, sustainable work-life balance, and a commitment to the principles of governance, responsibility, and high accountability.
In addition, the GPA Unit emphasizes that people analytics and data-driven strategies have been providing useful insights into the core components required to transform culture from a collection of superficial perks to a more strategic aspect of an organization.
Measuring culture with KPIs – KPI results can help identify strengths and weaknesses in the existing organizational culture and facilitate decision-making to drive improvement.
Actively using culture surveys – Simple yet meaningful culture surveys can collect employee sentiment and feedback, becoming the perfect internal assessment tool.
Building on talent data and HR analytics – People analytics equips leadership with insight on talent recruitment and development, employee performance, and retention.
Relying on the performance management system to strengthen alignment – A structured and coherent performance management system will ensure that the performance culture is aligned with the strategic mission and values of the organization while maintaining focus, agility, communication, collaboration, and well-being.
This approach suggests that a performance culture does not mold employees who are simply focused on performing tasks but are also growing in ways that support the organization’s long-term strategic goals.
Assessing Performance Culture Maturity
How can an organization determine whether its performance culture is sufficient and sustainable enough to achieve continuous improvement? The GPA Unit recommends the use of the Performance Culture Maturity Model Framework v1.0 to ensure a systematic, scalable approach to building and evaluating organizational and individual competencies. Using this system also allows organizations to identify its culture’s strengths and weaknesses and nurtures the right cultural elements.
The expected behavior of this framework focuses on establishing a cycle of continuous learning, measurable development milestones, and strategic alignment of skills with core business objectives. One of the framework’s key dimensions exemplifying this is Education and Knowledge. By integrating this dimension, organizations move through stages of maturity from ad hoc learning efforts to an optimized, fully integrated culture of performance.
As organizations mature, best practices such as continuous feedback loops, knowledge-sharing platforms, and leadership-driven learning initiatives become embedded in their DNA. For example, as organizations progress, the expected behavior transitions from static skill development programs to dynamic, adaptive learning ecosystems that respond to industry demands. This shift encourages employees to engage in cross-functional knowledge-sharing initiatives, develop expertise aligned with market needs, and accelerate personal and organizational growth.
The other dimensions of the framework are Integrated Performance Capability, Communication and Leadership Support, Creativity and Education, Education & Knowledge, Benefits & Recognition, and Happiness & Well-Being.
The journey toward a mature performance culture isn’t a quick fix—it’s a continuous evolution fueled by a commitment to learning and an openness to change. When employees are empowered to develop their skills and contribute their insights, they become not just participants but catalysts of transformation.
And the worst part is, workers are somehow becoming more exhausted and burnt out. This challenge is exacerbated by the fact that in the era of constant change, most workers do not fully understand what is expected of them. In today’s fast-paced and complex work environment, the concept of a “top performer” has become increasingly elusive, leaving many individuals feeling overwhelmed in trying to understand and achieve this seemingly impossible goal.
Improving employee performance management practices alone would not solve the global issues surrounding mental health and productivity nor the widening skill gap. What it can do, however, is bring clarity and structure to the chaotic workplace landscape, offering a framework for understanding and addressing some of these challenges.
Here are a few best practices to ensure that such appraisal systems are balanced, encouraging, and—ultimately—successful.
Balance Competing Priorities
Businesses must balance competing priorities in order to succeed, that’s a given. In order to ensure the consistency and fairness of evaluations when business priorities are translated into key performance indicators (KPIs) for employees, leaders need to make sure that they know where their priorities lie and what they’re willing to compromise on. These decisions and trade-offs will ensure that proper weight is allocated to KPIs and employee goals.
Here are some common organizational trade-offs businesses face that—if not clarified—might result in flawed employee performance management practices.
Predictability vs Responsiveness: Organizations must balance the need for stability and adherence to established plans with the demand for adaptability and quick reactions to changing circumstances.
Task Focus vs Relationship Focus: Organizations must decide whether to prioritize efficiency, productivity, and achieving specific tasks or emphasize the cultivation of strong interpersonal connections and collaborative relationships with stakeholders and team members.
Performance vs Potential: Organizations must decide whether to evaluate employees based on their current performance or their potential for growth and development. Focusing on performance can help identify top performers and reward them accordingly, but it may also overlook employees who have the potential to excel with additional training and support.
Autonomy vs Control: Organizations must balance the need to give employees autonomy and independence with the importance of maintaining control and oversight. Allowing employees to make decisions and take ownership of their work can increase motivation and job satisfaction, but it may also lead to inconsistency and a lack of standardization and maybe even inadequate first deliverables during the learning curve.
Figure 1 illustrates how the trade-offs can be monitored and measured using the appropriate KPIs.
Figure 1. Objectives and KPIs for Common Organizational Trade-Offs
When measuring employee performance, we typically look at metrics such as the quantity, quality, and timeliness of work. However, we often invest too much effort in avoiding subjectivity during evaluation, which might lead to employees feeling like they are just “numbers” and that the diversity of personalities and individual strengths do not matter as everyone is evaluated based on the same numerical standards. Moreover, organizations should not forget that there is so much more to people than their achievements. Embracing subjectivity in a balanced way will lead to a more relationship- and communication-based performance evaluation without neglecting objective performance metrics.
The KPI Institute recommends complementing quantifiable KPIs by assigning competencies and desired behaviors to objectives. Defining specific competencies for each role involves considering both internal factors (e.g. job descriptions and discussions with employees in those positions) and external factors (e.g. competency catalogs). Meanwhile, desired behaviors are shaped internally by the company’s vision and organizational values and externally by the socio-cultural context, demographics, and examples provided by professional associations or publications in the field.
Figure 2 shows how a goal can be measured through objective metrics (Individual KPI) with subjective components (Desired Behavior).
Figure 2. Objective Metrics With Subjective Components
Offer Stability and Consistency
Frequent changes to expectations and evaluation criteria lead to ambiguous definitions of top performance, sowing confusion and frustration among employees who struggle to discern what is genuinely valued and rewarded. Consequently, performance reviews may become inauthentic or—worse—employees may lose trust in the evaluation process, undermining its credibility. Employees thrive in an environment where they understand expectations and can rely on stable guidelines for evaluation.
Thus, it is critical to adhere to an employee performance management system (EPMS) that is supported by all the necessary tools, processes, training, and monitoring and review procedures. This approach benefits both managers and employees as it ensures clarity in performance evaluation, from setting inclusive performance standards to linking the results to talent management, which also involves providing employees with development opportunities. Consistency in these practices fosters a sense of security and trust among employees and a culture of continuous growth and employee engagement.
Employee performance management need not be perfect. Instead, organizations must aspire to align it harmoniously with the company’s values. Through a holistic approach to employee performance management, organizations will be more capable of balancing the needs of the business with the realities of life.
For more articles on employee performance management, click here.
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About the Author
Bori Péntek, a management consultant specializing in organizational development and human resource management, uses an approach that merges strategic planning and performance management at the organizational level with responsible HR strategies. With diverse experience in recruitment, HR, and operations management across sectors like sustainable construction, research, and instructional design, Bori is passionate about fostering employee well-being through conscious leadership and internal corporate social responsibility.
Editor’s Note: This article was originally published in the print edition of Performance Magazine Issue No. 28, 2024 – Employee Performance Edition.
