Your All-In-One Culture Audit Guide: What Is It & How to Conduct an Audit
89% of highly engaged employees describe their organization’s culture as positive. This shows the clear link between engagement and a strong company culture.
Conducting a culture audit can bring significant financial benefits to your organization. Did you know that companies with strong workplace cultures can achieve up to four times higher revenue growth than those with weaker ones? On the flip side, disengaged employees can cost your company around 18% of their annual salary. They contribute less and cost more due to lower productivity, higher absenteeism, and increased turnover. Taking steps to assess and improve your company culture isn’t just good for morale—it’s good for your bottom line.
When your team feels valued and engaged, they’re more likely to go the extra mile. This leads to increased productivity and innovation and higher employee retention rates, as team members are more satisfied and committed to their work. This reduces turnover costs and contributes to a cohesive and motivated workforce.
Contents
What is a culture audit?
What are the 3 components of a cultural audit?
What are the benefits of a workplace culture audit?
Popular culture audit frameworks
How to conduct an effective culture audit in 7 steps
Tips for successful culture audits
A real-world example of a culture audit success: KPMG UK’s cultural transformation
What is a culture audit?
Think of a culture audit as a deep health check for your organization. It’s a way to assess your work environment, values, and behaviors to see how well they reflect your mission and objectives. Essentially, it highlights what’s working, where there’s room for improvement, and how closely your day-to-day reality aligns with your aspirations as a company.
When you conduct a culture audit, you’ll typically focus on key areas like leadership styles, communication practices, employee engagement, and how policies affect the workplace. It also examines whether the values you promote—like collaboration, innovation, or inclusivity—are truly lived out by your teams.
This gives you clear, actionable insights into how your company culture impacts critical outcomes such as productivity, retention, employee satisfaction, and even your ability to innovate. With this information, you can make evidence-based decisions to strengthen your workplace and set yourself up for long-term success.
Illustrative example of a culture audit
Let’s say innovation is one of your company’s core values. During a culture audit, you might discover that employees hesitate to take creative risks because the current reward system favors short-term results over experimentation.
This misalignment can stifle the innovation you want to encourage. With this insight, you could adjust policies, implement training programs, or foster open communication to better align your culture with your goals.
Once you have conducted a culture audit, you’ll need to take steps to develop a culture that aligns with your business’s core values and vision.
AIHR’s Organizational Development Certificate Program will help you to develop the skills needed to design your organization’s culture. This online, self-paced Certificate Program includes how to implement a culture design process and lead a culture change initiative.
What are the 3 components of a cultural audit?
When conducting a culture audit, there are three main elements you’ll need to examine:
1. Employees and teams
How are your employees feeling? Are they motivated, satisfied, and connected to your company’s mission?
By assessing employee attitudes and team dynamics, you’ll uncover how behaviors contribute to or detract from your desired workplace culture. For example, are teams building each other up or dealing with frequent conflict? These insights give you a clearer picture of what’s happening on the ground.
HR tip
Use anonymous surveys to gauge how employees feel about being recognized and included—this often reveals engagement levels.
2. Processes and practices
Your organizational processes should reflect the culture you’re striving to create.
If you value innovation, for example, do your work practices encourage risk-taking and creative thinking? Misaligned or overly rigid processes can send the wrong message and hinder culture-building efforts.
3. Workplace environment
Both the psychological and physical environment matter. From how your office is designed to how employees are supported emotionally, the workplace environment plays a vital role in reinforcing your cultural values.
For example, open workspaces can encourage collaboration, while strong mental health policies build trust and engagement.
What are the benefits of a workplace culture audit?
- Early problem detection: Identifies issues like misaligned values or communication gaps early, enabling proactive solutions to create a healthier work environment.
- Enhanced engagement and retention: Aligning practices with employee values helps you boost motivation, commitment, and loyalty.
- Improved performance: A positive culture enhances productivity, collaboration, and overall organizational success.
- Better decision-making: Provides data-driven insights to help you refine policies, processes, and practices.
- Goal alignment: Ensures your workplace culture supports the company’s mission and strengthens internal and external cohesion.
- Leadership development: Highlights areas for improving your organization’s leadership behaviors and management practices.
4 popular culture audit frameworks
1. Denison organizational culture model
The Denison model links organizational culture to performance by evaluating how well a company’s practices align with its goals.
Elements of the model
- Mission: Analyzes clarity and alignment of purpose, vision, and strategies with goals.
- Adaptability: Measures the organization’s responsiveness to external challenges and ability to innovate.
- Involvement: Assesses employee empowerment in decision-making, innovation, and teamwork.
- Consistency: Evaluates the alignment of values, systems, and processes to ensure stability.
The model is best for: Organizations looking to strengthen the connection between cultural practices and outcomes like customer satisfaction, employee engagement, and financial performance.
2. Competing values framework (CVF)
Developed by Robert Quinn and John Rohrbaugh, CVF helps organizations balance focus and stability by identifying key cultural drivers.
Elements of the framework
- Internal vs. external focus: Determines priority on collaboration or competitiveness.
- Flexibility vs. stability: Evaluates adaptability versus control.
- Four cultural typologies:
The model is best for: Organizations diagnosing cultural dynamics and aligning them with strategic goals, especially in fast-changing environments.
3. Organizational culture assessment instrument (OCAI)
Based on CVF, OCAI measures cultural profiles to analyze strengths and weaknesses.
Elements of the model
- Survey-based assessment: Captures employee perceptions of current and desired culture.
- Gap analysis: Identifies differences between existing and the ideal culture.
- Cultural profiles: Maps traits to CVF typologies (adhocracy, clan, hierarchy, market).
- Action planning: Provides steps to close gaps and align culture with goals.
The model is best for: Organizations needing actionable insights for cultural improvement, particularly during transformation or realignment.
4. Edgar Schein’s organizational culture model
This foundational model views culture as a multi-layered construct, focusing on visible and invisible elements.
Elements of the model
- Artifacts: Tangible expressions of culture, such as dress codes or policies.
- Espoused values: Stated goals, strategies, and philosophies like mission and values.
- Underlying assumptions: Deep, unconscious beliefs shaping behavior and decisions.
The model is best for: Organizations addressing systemic issues or looking for cultural transformation by exploring root causes of behaviors and dynamics.
How to conduct an effective culture audit in 7 steps
Conducting a culture audit doesn’t have to feel overwhelming. Drawing from respected frameworks like the models discussed above gives you the tools to identify what’s working and where improvement is needed.
Here’s a step-by-step walkthrough to help you analyze and refine your workplace culture, complete with useful examples from each model.
Step 1: Define your company culture goals
Before exploring your current culture, it’s important to determine your ultimate goal. Do you want to boost innovation, improve teamwork, or better align behaviors with your mission? Each framework provides a lens to focus your efforts.
- From the Denison Model: Think about your mission. Is it clear and driving behavior across your company?
- With OCAI and CVF: Do you need more flexibility and agility, or does your organization lean too heavily on control?
- According to Schein: Look deeper. What assumptions or unwritten rules are driving behavior in your workplace?
Example: If you value adaptability, you might use CVF to examine how external focus and flexibility are expressed—or not—in how teams engage with change.
Step 2: Gather the data
Now, it’s time to collect qualitative and quantitative data to get a well-rounded view of your culture. Some data collection methods include:
- Anonymous surveys: Tools like OCAI are perfect for helping employees rate your organization’s leadership, vision, and approach to innovation.
- Interviews and focus groups: Use Schein’s model to guide questions about employee behaviors and underlying assumptions.
- Performance review and policy analysis: Take a Denison-inspired approach to examine whether behaviors align with mission and strategy.
HR tip
Use language from CVF (like collaboration vs. competition) as part of survey questioning to unpack employee priorities. For instance, do people feel their environment rewards teamwork over individual results—or vice versa?
Step 3: Analyze and assess alignment
Once you’ve got some solid data, it’s time to find the patterns and, more importantly, identify how well your current practices align with your goals. Start by mapping out key themes.
Questions to consider:
- Are your stated values reflected in day-to-day actions?
- Does your organization lean toward a dominant culture type, like control or hierarchy, when you’re aiming for more innovation?
- What unspoken “rules of the game” might hold your organization back?
Example: Using CVF, you might find your company is overly focused on control and internal processes while struggling with external adaptability. This would signal the need for cultural shifts to better balance priorities.
The true value of a culture audit lies is its capability to identify and analyze the alignment or misalignment between the values of an organization and the actual behaviors. By analyzing the data frameworks, HR can uncover key cultural gaps that may be unseen and be adversely impacting progress.
Step 4: Present your insights
Now that you’ve identified the strengths and gaps, it’s time to share them. This isn’t just a report—it’s a tool to inspire action and foster understanding.
Organize your findings into three clear sections:
- Strengths: Celebrate what’s already working
- Gaps: Highlight misalignments, such as if processes favor short-term results over long-term adaptability (Denison)
- Recommendations: Suggest actionable next steps.
Example: If OCAI results show a culture dominance in the hierarchy but employees value innovation, recommend more cross-functional collaboration or relaxed decision-making processes.
HR tip
Call out hidden culture points using Schein’s approach. For instance, if senior leaders value efficiency at the expense of collaboration, make that visible.
Step 5: Create an action plan
Here’s where thought meets action. Build a structured plan to close the gaps and strengthen alignment.
Key steps:
- Focus on areas with the most significant impact—like fostering adaptability if your culture audit reveals it’s missing
- Assign roles and responsibilities. Specify how leaders will model desired cultural behaviors
- Communicate clearly to ensure all employees understand the changes and their role in supporting them.
Example: If your analysis shows a weak connection between employees and your mission, start rolling out mission-focused communication campaigns or workshops.
Step 6: Embed values into practices
Culture will not change unless it is embedded in daily work. Consider your company policies, leadership behaviors, and internal processes.
- Revisit internal processes like onboarding or training and align them with cultural priorities
- Encourage leaders to model desired behaviors to reinforce underlying values
- Build feedback loops that engage employees in ongoing improvement.
Example: If your results pinpoint a lack of external focus, introduce regular team sessions that address changing market needs or customer feedback.
Step 7: Monitor and adjust
Finally, culture is never static, so it’s essential to measure progress and pivot when necessary.
- Use KPIs: Track engagement, innovation rates, or other key metrics tied to your culture goals.
- Repeat assessments: Use survey tools regularly to see whether perceptions are shifting.
- Collect qualitative feedback: Incorporate interviews or focus groups to check for deep-rooted change.
Example: After addressing adaptability issues, use quarterly surveys to assess whether employees feel better equipped to respond to external challenges.
Tips for successful culture audits
- Be transparent: Share findings with your team—both the good and the bad. Transparency builds trust.
- Start small: If a full audit feels overwhelming, pilot it for one department or team before scaling up.
- Use technology: Leverage tools like Culture Amp or Qualtrics to simplify data collection and analysis.
- Engage employees: Get feedback from every level of the organization. Their input is key to understanding how culture plays out in practice.
- Align audits with organizational goals: Tie your audit objectives to your organization’s broader mission, vision, and strategic goals. This alignment ensures that cultural improvements directly contribute to achieving key business outcomes.
A real-world example of a culture audit success: KPMG UK’s cultural transformation
In the early 2020s, KPMG UK faced reputational challenges from audit failures and internal misconduct. Recognizing the need for change, Jon Holt, appointed CEO in April 2021, initiated a culture audit to assess and improve the firm’s environment and standards.
The organization took the following steps:
- Conducted a culture audit and assessment: Conducted a thorough review, uncovering issues like lack of accountability and inadequate support for ethical practices.
- Ensured transparent reporting: Acknowledged past shortcomings and shared audit findings with employees to build trust and emphasize commitment to change.
- Developed an action and implementation plan:
- Leadership changes: Addressed misconduct by senior partners, resulting in key departures to reinforce integrity.
- Policy reforms: Introduced diversity and inclusion targets tied to partner remuneration to ensure accountability.
- Training programs: Implemented initiatives to foster a ‘high support, high challenge’ culture, encouraging rigorous yet supported audit practices.
The outcomes from the culture audit process included:
- Improved audit quality: Achieved consecutive positive audit quality reports from the Financial Reporting Council, with higher standards of excellence.
- Restored reputation: Rebuilt trust with clients and regulators, driving business growth.
- Enhanced internal culture: Created a more cohesive, accountable, and motivated workforce.
To sum up
A culture audit is an opportunity to align your workplace with its mission and values. By uncovering the strengths and gaps in your organization’s culture, you can take strategic actions that improve morale and results.
This process isn’t just good for business—it creates a work environment where individuals thrive together. Take the time to assess, reflect, and act. Your employees—and your bottom line—will thank you for it.
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