Impact of organisational culture on job satisfaction and retention

What is organisational culture?

Organisational culture is more than just posters on the wall or catchy values. It is shared behaviours, beliefs and everyday practices that shape how people work and interact. From how leaders communicate, to whether employees feel supported, to how diversity is valued, culture is the invisible glue that holds organisations together.

When the culture is positive, employees feel valued, connected and motivated. When it is toxic or unclear, even the most talented employees will struggle to stay engaged.

How organisational culture affects job satisfaction

Employee job satisfaction is influenced by both what people do and how they feel at work. A 2022 Gallup report found that companies with strong workplace culture and employee engagement saw 21% higher profitability and 59% lower turnover compared to those with weak cultures. Organisational culture shapes this experience through:

• Employee engagement: Cultures that encourage participation, feedback and open dialogue create high satisfaction levels.
  
  
• Cultural alignment: When employees’ personal values align with company values, they feel more motivated and engaged.
  
  
• Employee wellbeing: Supportive cultures that prioritise mental health and work-life balance improve happiness and reduce stress.

Organisational culture and employee retention

Employee retention is one of the biggest challenges employers face today. With Gen Z and millennials making up most of the workforce, expectations around flexibility, inclusion and growth are higher than ever. Culture plays a direct role in whether employees stay or go:

• Talent retention: Inclusive, supportive cultures reduce turnover by making employees feel valued.
  
  
• Employee loyalty: Recognition, transparency and respect build long-term commitment.
  
  
• Career development: Cultures that invest in employee growth keep people motivated to stay.

Creating a positive organisational culture

So how can organisations build the type of culture that truly supports job satisfaction and employee retention? Research shows that when employees feel aligned with workplace culture, they are more engaged, loyal and productive. The following are some proven approaches:

• Inclusive workplace practices: Prioritising diversity, equity and inclusion across all levels of an organisation creates a sense of belonging and respect. Inclusive workplaces not only attract diverse talent but also help retain employees by ensuring everyone feels valued.
  
  
• Employee engagement strategies: Surveys, feedback loops and open communication channels encourage employees to share their thoughts and ideas. Engagement also improves when employees know their opinions shape company policies and culture.
  
  
• Recognition and rewards: Recognising contributions, both big and small, reinforces motivation and loyalty.
  
  
• Work-life balance policies: Flexible timings, hybrid working options and realistic workloads are no longer simply perks; they are expectations. Organisations that invest in wellbeing policies often see higher employee retention and reduced absenteeism.
  
  
• Clear career pathways: Employees who see a future for themselves within an organisation are less likely to leave. Structured learning, mentoring and career development plans build loyalty while boosting job satisfaction.

Strong organisational culture is not about free lunches or office perks. It is about creating an environment where employees feel supported, respected and motivated to do their best work.

How GBS’s Applied Business Psychology Programme prepares you

This is where applied business psychology comes in. At GBS, our BSc (Hons) Applied Business Psychology with Foundation Year helps you develop the knowledge and skills to understand, evaluate and improve organisational culture. On our industry-relevant programme, you will learn to:

• Analyse workplace culture: Explore how organisational values, behaviours and policies affect employee engagement, wellbeing and retention.
  
  
• Design engagement strategies: Apply psychological theories to create inclusive workplaces where employees feel motivated and connected.
  
  
• Apply behavioural insights: Use psychology tools to solve real challenges such as high turnover, disengagement and low morale.
  
  
• Support employee wellbeing: Recognise psychological factors that influence motivation and design interventions that promote satisfaction and productivity.

At GBS, our applied business psychology programme is designed to link theory with practice. With flexible classes and a highly supportive teaching environment, you will gain academic knowledge and develop practical skills to make a real difference in the workplace.

Whether you aspire to work in human resources (HR), management, consulting or organisational development, our programme offers you the tools to shape better cultures, improve retention and foster job satisfaction in the modern workplace.

Organisational culture is one of the most powerful forces that shape how people feel about their work and whether they stay with a company. For businesses, investing in positive culture is non-negotiable. For you, learning how to analyse and improve culture can open doors to careers in HR, organisational psychology, consultancy and management. If you are curious about why people behave the way they do at work and how to create change, learn about our BSc (Hons) Applied Business Psychology with Foundation Year course.