The human resources department plays an important role in determining the culture of an organization. It develops and implements policies and procedures in key areas such as hiring practices, compensation, management relations and employee conduct and behavior. The decisions made by the HR department can have significant positive and negative implications for the overall cultural quality of the organization.

Creating Awareness

Company executives may not always have a true understanding of their corporate culture if they are far removed from the front lines of the operation. Human resources personnel provide the benefit of educating top management as to what the culture is really like. While this could lead to positive changes in the corporate culture, it also could prompt changes that meet with resistance from employees, such as when management decides it needs to change or eliminate popular employee programs that it deems wasteful or unproductive.

Compensation Plans

HR typically bears the responsibility of designing compensation programs for the organization. Depending on how the staff accomplishes this, it could have a positive or negative affect on organizational culture. For example, an incentive program for salespeople may provide the opportunity for employees to increase their compensation through greater productivity. However, it could also create an environment where the salespeople are competing against each other, leading to the deterioration of teamwork and morale.

Hiring Practices

HR also largely determines the hiring and recruiting practices in organization, which has a significant impact on the organizational culture. A strong attention to characteristics of job candidates such as education and experience can ensure the company hires employees who are capable of performing the job. On the other hand, if there is a lack of focus on characteristics such as personality and people skills, the company may end up hiring candidates who have difficulty fitting into the corporate culture.


Another key area falling under human resources is the conduct of the organization's members. In many companies, particular larger ones, this entails the development of a code of conduct or ethics that stipulates how employees should treat each other and conduct their daily activities. An effective code of conduct that captures the core values of the organization and is strictly enforced can promote a culture exemplified by high levels of ethical behavior. A weak code or one that is only given lip service by human resources could lead to a culture of dishonesty and distrust.