The company culture is shaped by the type of reward systems used in the organization and the kinds of behaviors and outcomes it chooses to reward and punish. One relevant element of the reward system is whether the organization rewards behaviors or results. Some companies have reward systems that emphasize intangible elements of performance as well as more easily observable metrics. In these companies, supervisors and peers may evaluate an employee’s performance by assessing the person’s behaviors as well as the results. In such companies, we

may expect a culture that is relatively people- or team-oriented, and employees act as part of a family.

However, in companies in which goal achievement is the sole criterion for reward, there is a focus on measuring only the results without much regard to the process. In these companies, we might observe outcome-oriented and competitive cultures. Whether the organization rewards performance or seniority would also make a difference in culture. When promotions are based on seniority, it would be difficult to establish a culture of outcome orientation. Finally, the types of behaviors that are rewarded or ignored set the tone for the culture. Which behaviors are rewarded, which ones are punished, and which are ignored will determine how a company’s culture evolves. A reward system is one tool managers can wield when undertaking the controlling function.

Erdogan, Berrin, Bauer, Talya, , and Mason Carpenter. Principles of Management. 1969 . Flat World Knowledge. 22 Nov, 2009. .