NEW YORK, NY – As the Great Resignation continues to impact companies in the post-pandemic world, companies are now more eager than ever to ensure that they are hiring and retaining employees who fit their organizational culture. New research from Columbia Business School explores how culture fit measuring systems can make it easier for executives to instill strong company values, strengthen employee productivity, fine-tune hiring, and employee retention.
As organizations become more decentralized, companies have opted to use culture-fit measuring systems, such as HighMatch and Good&Co, which systematically measure and select applicants who are aligned with the organization's values. Using data from a Chinese agri-business company with more than 10,000 workers, Wei Cai, Assistant Professor of Business at Columbia Business School, finds that newly-hired employees selected using a culture-fit measurement system do not initially outperform employees who were not selected using the system. However, as they work in the company for a longer time, their performance begins to diverge.
The study, Formalizing the Informal: Adopting a Formal Culture-fit Measurement System in the Employee Selection Process, also finds that newly-hired employees selected with a culture fit measurement system have significantly higher work performance in an office that features strong organizational values, compared to employees who join offices with cultures that are poorly aligned with organizational values. Additionally, results using a culture fit measurement system can be negatively influenced by candidates who trick the system, by providing answers that they think the system will reward.
“Hiring is complex, time-consuming, and expensive – so it’s imperative that businesses try to get it right. This research shows that systems that measure culture fit can be a game-changer: they can help identify employees who will become high-achievers over time,” said Professor Cai. “But businesses that adopt this method, however, must account for the potential problem of candidates tricking the system.”
Professor Cai analyzed hiring data for more than 4000 new employees hired from 2011 to 2017. These employees were hired across over 200 different offices. The research compared work evaluation scores of employees in two groups: employees who were selected through the company’s culture-fit measurement system, and employees who were selected without it.
Professor Cai found that as employees’ tenure with the company progressed, those who were selected with the culture fit management system scored 10 percent higher than their counterparts in year two of employment compared to those who were not selected using the system. By year three, work evaluation scores widened to 16 percent. Additionally, Cai found that office culture matters: employees hired into an office with a strong, clear workplace culture already in place scored higher on their workplace evaluation score.
Additional Key Takeaways:
- The implementation of a formal culture-fit measurement system in the employee hiring process can potentially alleviate difficulties in instilling organizational values by improving the employee selection process.
- The implementation of a formal culture-fit measurement system during the employee hiring process may trigger applicants’ gaming behavior. The study found that applicants with misaligned values may try to hide their true type and maximize their score on the culture-fit test. If their efforts are successful, the adoption of a formal culture-fit measurement system in the employee hiring process may be subject to inaccurate measurement of culture-fit and may result in selecting a different type of employee than intended.
- The culture already established within an office is an important factor in determining the success of implementing a formal culture-fit measurement system in the employee selection process.
To learn more about the cutting-edge research being conducted at Columbia Business School, please visit www.gsb.columbia.edu.
About the researcher
Wei Cai joined Columbia University in 2020. Her research interests revolve around management accounting, organizational culture, and diversity and inclusion. Her research broadly...Read more.