Why workplace culture matters

Positive workplace culture is tangible – you recognise it when you experience it, but its ingredients are not always obvious.

Broadly speaking, culture is the embodiment of shared values, customs and behaviours. It encompasses the ‘way things are done around here’ and has a significant impact on an organisation’s dynamics and its employees’ interactions.

Through consultation with organisations who have strong and effective workplace cultures, the Commission found that positive work cultures are characterised by:

  • a high degree of trust and respect between all levels of staff
  • improper conduct not being tolerated
  • high levels of wellbeing where people are motivated and engaged, contributing to staff retention
  • positive engagement where employees feel happy and enthusiastic about their work
  • a climate in which people feel valued
  • employees that have a sense of pride in the organisation’s goals and values
  • positive perceptions of how senior leadership support psychological safety and stress prevention.

How we measure workplace culture

To improve workplace culture, we need to know what we’re doing well and what we can do better.

The Commission analysed People matter survey data in 2023 and 2024 to identify organisations that scored highly on measures of workplace culture. To do this, we used regression analysis to determine 5 key factors that contribute to a positive workplace culture:

We then spoke to leaders from different organisations to find out how they build and maintain a positive workplace culture. We chose organisations from a range of public sector industries including health, water, sport and transport.

Despite the differences in industry and size, we found common themes and practices in their approach to building culture. These align closely with the key factors we use to measure workplace culture in the People matter survey.

Below you’ll find some practical tips and case studies based on the key factors. You can use these to help improve workplace culture in your organisation.


Senior leadership: visible and supportive leaders

Senior leaders are well placed to set the tone of an organisation and build a strong culture.

We spoke with senior leaders in organisations with a positive workplace culture to understand how they build a positive environment for their peers and employees:

  • create workplaces that are caring, compassionate and foster wellbeing and  belonging
  • are visible and formally and informally engage with employees in a meaningful way
  • are deliberate in demonstrating the cultural norms, values and behaviours they wish to cultivate, including the public sector values
  • encourage and support personal and professional growth
  • encourage teamwork and collaboration so employees feel like they’re working toward a common goal. This is particularly important during times of stress or high workload.
  • encourage and enable staff to ‘speak up’ when they see negative workplace behaviours
  • make hard decisions when needed that are in the best interest of the organisation and public sector workforce.


Organisational integrity and a connection to purpose and values

Building organisational integrity

All employees in public sector agencies must act with and uphold integrity.

Integrity risks and how they’re managed can vary between organisations because of the nature and location of their workplace.

Leaders from organisations with strong organisational integrity focus on:

  • supporting and encouraging regular integrity conversations across the organisation
  • creating a safe work environment for employees to report integrity concerns and address negative behaviours
  • implementing fair recruitment practices based on merit and equity
  • sharing and discussing integrity obligations, policies and procedures with all employees. For example, policies on gifts, benefits and hospitality, conflicts of interest or secondary employment requirements
  • tailoring integrity information to align with an organisation’s integrity risks. For example, by building employee awareness about:
    • financial probity requirements if services are procured regularly or complex contracting arrangements are in place
    • privacy requirements and the use of official information for frontline workers.
  • regularly reviewing policies and procedures to find opportunities for improvement and acting on issues and risks if they arise
  • offering and encouraging employees to complete integrity training
  • appointing integrity champions who specialise in integrity matters that employees can contact. For example, a champion who specialises in fraud and corruption control.

Creating a connection to organisational purpose and values

There’s a strong link between positive workplace culture and an organisation’s purpose and values.

The Victorian public sector has 7 core values. In addition, some public organisations develop complementary values that align with their purpose.

For example, organisations that deliver large-scale infrastructure projects may have different values to organisations that are customer and community focused.

Leaders from organisations with a strong connection to their purpose and values told us they:

  • co-create the organisation’s purpose, values and behaviours with employees to build a sense of shared ownership and a trademark for ‘how things are done around here’
  • communicate with each employee about how their role contributes to the organisation’s purpose and goals
  • identify and highlight the contributions of employees to increase engagement and performance
  • lead by example and acknowledge employees, teams and projects that model the organisation’s values
  • embed the organisation’s values in core processes. For example, employees may be asked to reflect on and demonstrate the values:
    • as part of their performance development plan
    • when applying for learning and development opportunities.


Safety climate and responding to negative behaviours

Safety climate refers to how physically and psychologically safe employees feel at work.

Under the Occupational Health and Safety Act 2004, employers have obligations and duties to create a safe work environment.

However, workplace safety issues, negative behaviours and other workplace harm can occur. It’s critical that workplaces have a dual focus on preventing harm and addressing it when it arises.

Creating a safe and mentally healthy workplace culture starts with senior leaders and managers. Leaders can take practical steps to influence workplace culture.

For example, the leaders we spoke to:

  • set clear expectations for ‘the way we act around here’ and make these expectations visible via discussion in team meetings and through visual reminders
  • build collaborative workplaces where different perspectives are encouraged, and staff feel empowered to contribute and safe to provide feedback
  • have clear pathways for reporting negative behaviours and equip managers with the skills to manage challenging situations so they can respond early to address poor performance or workplace behaviour when it arises
  • lead by example and demonstrate the behaviours and attitudes they want to see in their employees
  • implement systems, policies and processes to support a safe and mentally healthy work environment
  • implement mental health and wellbeing strategies that align with the Victorian Mentally Healthy Workplaces Framework
  • implement clear processes and procedures for employees and managers to identify, prevent and manage psychosocial risks and issues
  • raise awareness, share resources and educate employees and managers about psychological safety
  • discuss wellbeing as a safety issue. For example, tired and stressed people cannot work at their best and can pose a risk to themselves or others at work
  • acknowledge the safety risks that are present in different kinds of workplaces. For example, unsafe practices on an infrastructure build site can at worst, put people’s lives at risk.


Wellbeing: fostering employee wellbeing

While employees are responsible for managing their own health, the workplace has a responsibility to create an environment that supports their health and wellbeing.

This helps foster a positive workplace culture and prevent negative impacts on employees’ health.

The leaders of high-performing organisations we spoke to foster wellbeing by:

  • demonstrating and promoting work-life balance for themselves and all employees and respecting the boundaries of in-hours work
  • providing opportunities for honest conversations. For example, scheduling regular ‘wellbeing check ins’ that focus on protecting wellbeing and preventing harm
  • encouraging people to bring their whole selves to work and to speak up if they need support. This can reduce the risk of stress, burnout or fatigue
  • acknowledging the impact of stressful circumstances on employees and providing avenues for debriefs or reflection. For example, during emergency situations or major organisational changes.
  • actively monitoring the measures of wellbeing and finding opportunities for improvement.