HRM3706 Performance Management
STUDY UNIT 3 – Creating a high-performance culture
3.1 Introduction
Creating and nurturing the right organisational culture plays a key role in ensuring that an environment
conducive to performance is established and maintained in an organisation.
The reality is that even the most “perfect” product or service can still be improved, or totally new products and
services invented, in addition to more cost-effective, efficient and effective ways of doing things. When
exceptional performance is achieved, this performance is then reinforced and rewarded in appropriate ways
so that “pockets of excellence” over time become the norm and do not remain exceptions. This could also
mean that processes, systems and products are redesigned for great speed, quality and impact.
3.2 Defining organisational culture
Griffin, Phillips, Gully and Carrim (2019: 501) define organisational culture as “a system of shared values,
norms and assumptions that guide members’ attitudes and behaviours”.
Schwartz (2018) describes culture as “the collection of beliefs on which people build their behaviour”.
Hence, organisational culture is about what people think and how they behave as the individual and collective
members of the organisations.
It is the heart and soul because it is inside the organisation, but it is intangible because you cannot see it,
although you can feel it. Organisational culture is what you do not see, but you know it is there.
Organisational culture referred to the way things are done in an organisation, and the collective beliefs and
behaviour of people in the organisation. Thus, explicit values and principles guide the behaviour of managers
and employees in an organisation. When the culture is strong, people conform to the values and it simply
becomes a way of living and working in the organisation.
Organisational culture keeps the organisation going and the spirits of its people focused on striving towards its
goals. This is particularly prevalent in companies that became successful because of prominent and strong
leaders with a clear philosophy, values and approaches to doing things. When new employees join the
organisation, they simply adapt to the prevailing organisational culture.
3.2.1 Factors contributing to organisational culture
Organisational culture focuses on the basic attitudes, values and expectations of people. According to Jones
(2019), three main factors contribute to organisational culture:
1. Company founders. Organisational culture is typically traced back to the founders of the organisation.
The founders often possess dynamic personalities, strong values and clear visions of how their
organisation should operate. Their attitudes and values are transmitted to managers and employees.
This is often perpetuated long after the founders are gone.
E.G. In South Africa is the vision and influence of Raymond Ackerman, founder of Pick n Pay. Today,
the vision and beliefs of Pick n Pay as a successful retailer are visible in every store throughout the
country and indeed other countries.
2. Organisational experience. Culture often develops out of an organisation’s experience with the
external environment. They then find a niche area or interest from its industry, marketplace or
broader environment.
E.G. Digital companies such as Amazon, Google and Facebook were clearly influenced by the explosion
and growth in the information technology market and the broader technology-driven business
environment.
3. Internal interaction. Organisational culture also develops out of contact between groups of individuals
within the organisation. These shared experiences become part of the behaviour and actions of
individuals and departments within the organisation. In essence, people assign similar meaning to
various events and actions. Audit firms are dominated by auditors, and their thinking, behaviour and
Page 1 of 6
Summary by L Petzer
, experiences will most definitely impact on the culture of the organisation and the way in which they
interact with one another and with the rest of the organisation.
Given the prominent and unique factors contributing to organisational culture, it is evident that while there
may be similarities between different types of organisations, each organisation still has a unique culture. It
remains important to analyse the organisational culture and to write up the unique history and journey of the
company to gain a proper understanding of the culture of the organisation and how it affects performance.
3.2.2 Features of organisational culture
Employees learn about organisational culture the moment they join the organisation. Organisational culture
manifests itself in key features or elements as identified by Jones (2019):
❖ Symbols or metaphors. Companies often rely on symbols, objects or images that bring meaning
beyond their inherent content. Raymond Ackerman used the metaphor of the four legs of a table as
the four priorities of Pick n Pay.
❖ Stories. Leaders transmit information about the culture of the company by virtue of stories. These
stories illustrate key aspects of the culture. Sometimes stories involve critical incidents in the history of
the company, many of them shaping the history and indeed the future of the company.
❖ Jargon. Companies often develop their own jargon or unique language that managers and employees
will understand and associate with. This brings people together in a unified way and is used effectively
as a way of introducing newcomers to the organisation.
❖ Values or statement of principles. Organisational culture is transmitted by means of explicit
statements of principles or values.
❖ Behaviours. Values in turn are transmitted to clear behaviours and actions. For instance, if customer
experience is a strong value, most employees will go out of their way to exhibit behaviours in their
daily conduct consistent with the value or principle of customer service.
The above features of organisational culture are prevalent at all organisations. Some will be more visible than
others depending on the nature of the organisational culture journey at the organisation. It may also depend
on how embedded the legacy of the founder(s) is and whether successors have managed to continue aligning
to the legacy or have used new stories to change and develop the culture of the organisation.
3.3 High-performance cultures
The type of organisational culture determines the level of performance.
✓ World-class company competing with the best in the world will have an explicit high-performance
culture.
✓ Average organisations will have average organisational cultures
✓ Poor performing companies will have weak organisational cultures
3.3.1 Characteristics of high-performance cultures
It is important to have a clear understanding of the characteristics of high and low performance cultures
Characteristics of low and high-performance cultures
Key factors Characteristics of low performance cultures Characteristics of high-performance cultures
Role of leadership Leaders are managing, but not visible in Leaders are leading high performance in their
driving high performance visibility and behaviour
Organisation Performance values such as excellence and Performance values such as excellence and
values innovation are listed but not lived innovation are visible and actively lived
Performance goals Key performance indicators are documented Key performance indicators are documented,
and targets and reported on at the end of the year supported and reported on at regular intervals
Focus on talent The majority of managers and employees are The majority of managers and key employees are
not identified as top talent and therefore identified and supported as top talent and
struggle to excel in their roles therefore tend to excel in their roles
Role of HR HR is the function that keeps on reminding HR is supporting line management with
line management to submit performance communication and other support; line
evaluations management takes full responsibility
Frequency of Performance appraisals occur once a year Performance appraisals occur at regular intervals
performance and mechanisms are in place for instant feedback
appraisals
Page 2 of 6
Summary by L Petzer
STUDY UNIT 3 – Creating a high-performance culture
3.1 Introduction
Creating and nurturing the right organisational culture plays a key role in ensuring that an environment
conducive to performance is established and maintained in an organisation.
The reality is that even the most “perfect” product or service can still be improved, or totally new products and
services invented, in addition to more cost-effective, efficient and effective ways of doing things. When
exceptional performance is achieved, this performance is then reinforced and rewarded in appropriate ways
so that “pockets of excellence” over time become the norm and do not remain exceptions. This could also
mean that processes, systems and products are redesigned for great speed, quality and impact.
3.2 Defining organisational culture
Griffin, Phillips, Gully and Carrim (2019: 501) define organisational culture as “a system of shared values,
norms and assumptions that guide members’ attitudes and behaviours”.
Schwartz (2018) describes culture as “the collection of beliefs on which people build their behaviour”.
Hence, organisational culture is about what people think and how they behave as the individual and collective
members of the organisations.
It is the heart and soul because it is inside the organisation, but it is intangible because you cannot see it,
although you can feel it. Organisational culture is what you do not see, but you know it is there.
Organisational culture referred to the way things are done in an organisation, and the collective beliefs and
behaviour of people in the organisation. Thus, explicit values and principles guide the behaviour of managers
and employees in an organisation. When the culture is strong, people conform to the values and it simply
becomes a way of living and working in the organisation.
Organisational culture keeps the organisation going and the spirits of its people focused on striving towards its
goals. This is particularly prevalent in companies that became successful because of prominent and strong
leaders with a clear philosophy, values and approaches to doing things. When new employees join the
organisation, they simply adapt to the prevailing organisational culture.
3.2.1 Factors contributing to organisational culture
Organisational culture focuses on the basic attitudes, values and expectations of people. According to Jones
(2019), three main factors contribute to organisational culture:
1. Company founders. Organisational culture is typically traced back to the founders of the organisation.
The founders often possess dynamic personalities, strong values and clear visions of how their
organisation should operate. Their attitudes and values are transmitted to managers and employees.
This is often perpetuated long after the founders are gone.
E.G. In South Africa is the vision and influence of Raymond Ackerman, founder of Pick n Pay. Today,
the vision and beliefs of Pick n Pay as a successful retailer are visible in every store throughout the
country and indeed other countries.
2. Organisational experience. Culture often develops out of an organisation’s experience with the
external environment. They then find a niche area or interest from its industry, marketplace or
broader environment.
E.G. Digital companies such as Amazon, Google and Facebook were clearly influenced by the explosion
and growth in the information technology market and the broader technology-driven business
environment.
3. Internal interaction. Organisational culture also develops out of contact between groups of individuals
within the organisation. These shared experiences become part of the behaviour and actions of
individuals and departments within the organisation. In essence, people assign similar meaning to
various events and actions. Audit firms are dominated by auditors, and their thinking, behaviour and
Page 1 of 6
Summary by L Petzer
, experiences will most definitely impact on the culture of the organisation and the way in which they
interact with one another and with the rest of the organisation.
Given the prominent and unique factors contributing to organisational culture, it is evident that while there
may be similarities between different types of organisations, each organisation still has a unique culture. It
remains important to analyse the organisational culture and to write up the unique history and journey of the
company to gain a proper understanding of the culture of the organisation and how it affects performance.
3.2.2 Features of organisational culture
Employees learn about organisational culture the moment they join the organisation. Organisational culture
manifests itself in key features or elements as identified by Jones (2019):
❖ Symbols or metaphors. Companies often rely on symbols, objects or images that bring meaning
beyond their inherent content. Raymond Ackerman used the metaphor of the four legs of a table as
the four priorities of Pick n Pay.
❖ Stories. Leaders transmit information about the culture of the company by virtue of stories. These
stories illustrate key aspects of the culture. Sometimes stories involve critical incidents in the history of
the company, many of them shaping the history and indeed the future of the company.
❖ Jargon. Companies often develop their own jargon or unique language that managers and employees
will understand and associate with. This brings people together in a unified way and is used effectively
as a way of introducing newcomers to the organisation.
❖ Values or statement of principles. Organisational culture is transmitted by means of explicit
statements of principles or values.
❖ Behaviours. Values in turn are transmitted to clear behaviours and actions. For instance, if customer
experience is a strong value, most employees will go out of their way to exhibit behaviours in their
daily conduct consistent with the value or principle of customer service.
The above features of organisational culture are prevalent at all organisations. Some will be more visible than
others depending on the nature of the organisational culture journey at the organisation. It may also depend
on how embedded the legacy of the founder(s) is and whether successors have managed to continue aligning
to the legacy or have used new stories to change and develop the culture of the organisation.
3.3 High-performance cultures
The type of organisational culture determines the level of performance.
✓ World-class company competing with the best in the world will have an explicit high-performance
culture.
✓ Average organisations will have average organisational cultures
✓ Poor performing companies will have weak organisational cultures
3.3.1 Characteristics of high-performance cultures
It is important to have a clear understanding of the characteristics of high and low performance cultures
Characteristics of low and high-performance cultures
Key factors Characteristics of low performance cultures Characteristics of high-performance cultures
Role of leadership Leaders are managing, but not visible in Leaders are leading high performance in their
driving high performance visibility and behaviour
Organisation Performance values such as excellence and Performance values such as excellence and
values innovation are listed but not lived innovation are visible and actively lived
Performance goals Key performance indicators are documented Key performance indicators are documented,
and targets and reported on at the end of the year supported and reported on at regular intervals
Focus on talent The majority of managers and employees are The majority of managers and key employees are
not identified as top talent and therefore identified and supported as top talent and
struggle to excel in their roles therefore tend to excel in their roles
Role of HR HR is the function that keeps on reminding HR is supporting line management with
line management to submit performance communication and other support; line
evaluations management takes full responsibility
Frequency of Performance appraisals occur once a year Performance appraisals occur at regular intervals
performance and mechanisms are in place for instant feedback
appraisals
Page 2 of 6
Summary by L Petzer
