Culture, not engagement, drives productivity — and most employers measure the wrong thing, says expert
While employers are focused on tracking and analyzing employee engagement through surveys, what they're really missing is tracking the overall workplace culture — and that's what affects productivity and business performance, says one expert.
Carol Ring, CEO of culture connection and former senior operations executive at Rogers Communications, says it's time for employers to shift to culture-specific tools that capture the employee's experience as a whole, rather than how individuals feel about their jobs.
"There's this myth that engagement will drive better productivity. But engagement is just the symptom of what's going on. What's below the proverbial iceberg is the work experience that people are having — and that's where we get to culture, and where we really find out the barriers that are holding people back," she says.
Engagement hits a low
Global employee engagement rates have declined again for a second year, to the lowest they have been since 2020, according to Gallup's State of the Global Workplace: 2026 Report. Engagement in 2025 sat at 20 per cent, compared to 2022 and 2023, when employee engagement sat at 23 per cent.
Managers account for most of the recent downturn, the report found, and part of the downturn comes from organizational structures, with employers cutting manager roles, especially in regions such as South Asia.
That loss of engagement can be costly, as the report estimates low engagement cost the global economy roughly US$10 trillion in lost productivity in 2024.
Looking at the whole workplace
The problem with focusing specifically on employee engagement and engagement tools, Ring argues, is that they have outlived their relevance. While employee engagement surveys can ask individuals about access to tools at work and relationships with co-workers, they can't capture the workplace as a whole.
A culture assessment asks about the workplace itself, such as whether employees are experiencing collaboration or bureaucracy.
"It's a much more organizational view of the workplace than an engagement survey," she says.
Ring points to a familiar scenario: a sales team misses its targets, and reps are called into a brainstorming meeting where ideas flow quickly. Everyone appears engaged, but that does not mean results improve once the meeting ends.
While high employee engagement can be linked or correlated to better financial performance, she says that higher engagement is the output of work being done on the culture first.
According to DHR Global's 2026 Workforce Trends Report, while 77 per cent of executives say culture is very important, only 36 per cent of workers believe their company culture is well- defined or drives performance.
"We also have examples of companies with high employee engagement that ended up settling very expensive sexual harassment lawsuits. So, the opposite is true as well — high engagement doesn't necessarily translate into better performance," she adds.
Culture as a cost centre
Having a poor workplace culture, Ring says, can lead to friction and a loss of productivity in the workplace, and while it might not show up on financial statements, it shows up as "lost opportunity."
"Every hour spent managing resistance is an hour not spent creating value. What I'm proposing is that culture should be seen as a cost centre," she adds.
In her work, Ring uses a culture assessment tool that measures "cultural entropy — that measure of friction."
If organizations score 10 per cent or lower, it indicates a healthy workforce; if companies are at 30 per cent or 40 per cent, it means they are struggling.
"If you take an example of 1,000 employees with cultural entropy of 30 per cent versus 10 per cent, and an average salary of $75,000, making that shift from 30% to 10% translates into approximately $15 million of productivity you could put back into the organization," she says.
Not perfect culture
While HR can definitely be the champions of creating a better workplace culture, Ring says, everyone has a role to play, and that includes leadership.
"They might be able to lead the culture cost centre, project manage it, take the lead — much in the way the CFO manages the financial cost centre, the chief revenue officer owns revenue, and the CIO is in charge of technology," she adds.
So, what makes a good workplace culture? Ring says that differs across the board, as every organization works in its own unique way.
"What works for Disney doesn't work if you're running a nuclear station — you really don't want anyone at the nuclear station innovating on their maintenance checklist. There's no such thing as a perfect culture. There's a great culture for each organization. The key is having a commitment to it, and recognizing that culture is the engine that drives your strategy," she says
