Employers will go to great lengths to screen job candidates, interview and check references in the quest to make the best hire. Some even take a more scientific approach, deploying a structured interviewing process or putting a potential employee through the paces in the workplace in what amounts to an audition.

There is another critical question that, consciously or unconsciously, lies at the heart of any hiring process: Will this candidate mesh well with his or her co-workers and managers? What about with the company’s values and overall culture? But cultural fit is tough to gauge — perhaps because it’s also difficult to clearly define.

“It is an incredibly vague term, and it’s a vague term often based on gut instinct,” says Wharton management professor Katherine Klein, vice dean of the Wharton Social Impact Initiative. “The biggest problem is that while we invoke cultural fit as a reason to hire someone, it is far more common to use it to not hire someone. People can’t tell you what aspect of the culture they are worried about.”

If that sounds a lot like the kind of language country clubs once used to exclude applicants, that’s because discussions around cultural fit can also involve certain euphemisms for what amounts to justifying prejudice, or at least, bias. “It’s usually this sense that this person doesn’t seem ‘like us,’ like she or he won’t party well or play well,” continues Klein. “There are all sorts of biases that can — and do — creep in.”

Cultural fit, of course, does have a legitimate role in the workplace. “But in many organizations, fit has gone rogue,” argued Lauren A. Rivera in a recent piece in The New York Times. The associate professor of management and organizations at Northwestern University’s Kellogg School of Management interviewed 120 decision makers, and found them deploying subjective personal criteria rather than screening for candidates who could thrive on established organizational values. Wrote Rivera: “Bonding over rowing college crew, getting certified in scuba, sipping single-malt Scotches in the Highlands or dining at Michelin-starred restaurants was evidence of fit; sharing a love of teamwork or a passion for pleasing clients was not.”

“The biggest problem is that while we invoke cultural fit as a reason to hire someone, it is far more common to use it to not hire someone.” –Katherine Klein

“How you measure that cultural fit is the key,” says Wharton management professor Nancy Rothbard. “It’s not that we should throw out cultural fit wholesale; it’s not necessarily a bad thing. But the question is, can we get at it through these other qualities? I think we’re using these other qualities as a proxy for, ‘Is this person going to fit in here?’ So we’re making a leap, a large assumption based on these similarities.”

The Odd Person Out

There are good reasons to screen for employees who will fit in culturally — depending on whether and how that gets defined. “When people don’t fit the organization, they don’t feel comfortable,” says Rothbard. “They often don’t get selected, and if they do, they don’t enjoy their experience and they leave.”

Sometimes the skill set is there, but the kind of social bonds that grease the wheels of relationships are so lacking that friction follows and misery prevails — as is the case for a woman we will call Cynthia, the office manager at a small Philadelphia plumbing company. Interactions in the office are often fraught with tension and bickering when Cynthia calls co-workers on their use of malapropisms, or what she perceives as a lack of logic in both small talk and work-related discussions.

Some tensions would seem to stem simply from bad management — “I wonder if I asked my bosses what my daughter’s name was if they’d know,” she notes as one example — while others, she says, can be put down to cultural differences. “I think what makes me the odd person out is there is a part of me that doesn’t want to take the time to socialize with people I don’t have anything in common with. I think I am interested in relationships, and I am interested in politics. It’s not even about having different politics – [my co-workers] just don’t want to talk about politics. If you try to engage them in conversation about something going on in the outside world, if you say something about what was going on with the economy in Greece, they don’t want to talk about that at all.”

In this case, what the company didn’t know hurt it — and the employee. Cynthia is playing out the dynamics described by University of Maryland emeritus professor of psychology Benjamin Schneider in his Attraction-Selection-Attrition (ASA) framework. In 1987, Schneider proposed that the collective characteristics of people define an organization, and that over time, this happens as a natural outcome of the ASA cycle: Like-minded individuals select each other to be part of an organization, and sooner or later, the “misfits” leave.

Cynthia in fact has decided to quit her job and seek work with a temp agency — in part so she can gauge the culture of a new workplace before committing to it long term.

But her workplace may be diminished by her absence. Research also shows the benefits of diversity in the workplace — diversity of ideas, personality and life experience in additional to racial, religious and gender diversity. “If we value diversity, and I think we do, and if we want to get the benefits, and I think we do, we have to recognize that it has to be managed,” says Rothbard. The case of Cynthia “is really challenging, because they are not ever going to come to terms over the use of the English language, so having an intervention around that is probably not going to happen.” But one thing that could work, Rothbard adds, is to have an intervention around “work-related things that everyone can all agree on and see value in — focusing on building a sense of cohesion and closeness through-work-based activities.”

“The only way that culture in the workplace is effective is if there are sets of values that help the company achieve its strategy.” –Sigal Barsade

Klein says a solution may require a different kind of conversation than is currently happening. “She may think, ‘These people don’t like me and I feel like an outsider,’ and they may feel she doesn’t like them and respect them. A good manager or leader is able to build esprit de corps.”

Cultural fit emerged as an intriguing factor in a study Rothbard co-authored with Gina Dokko and Steffanie L. Wilk titled, “Unpacking Prior Experience: How Career History Affects Job Performance,” published in 2009 in Organizational Science. The authors found that while employers hire for relevant experience — a positive — long experience in a previous job had a countervailing negative effect, bringing with it something the authors call “cognitive baggage,” and so the overall effect washed out. But the washout became a positive when one of two other factors was present. Says Rothbard: “What we found was when the supervisor said the employee was flexible, the negative effect went away. And the other variable that made that go away was cultural fit. So when we asked a new employee, ‘How well do you fit?’ and they said ‘I fit really well,’ that negative effect was not there, either.”

Better Fit, Better Financial Performance

Good cultural fit isn’t just about avoiding employee churn. It’s also about financial performance. Schneider in 2013 noted the speed with which culture “became the darling of the management consulting world,” and that it “presented some issues because academics were not quite sure … what culture was and what it represented — and even whether it was appropriate to try to link organizational culture with the financial success of corporations.”

An answer came in 2014 from a study of one sector that strongly suggested that culture can have an impact on a company’s financial performance. The content and strength of culture was examined in “Parsing Organizational Culture: How the Norm for Adaptability Influences the Relationship Between Culture Consensus and Financial Performance in High-Technology Firms,” by Jennifer A. Chatman, David F. Caldwell, Charles A. O’Reilly and Bernadette Doerr. The study, published in the Journal of Organizational Behavior, found that “firms with higher levels of consensus across many norms, as well as an intensive emphasis on adaptability that may promote conformity without the inertial effects of uniformity, performed better financially over a volatile three-year period.”

Cultural fit should not, however, eclipse the importance of heterogeneity. Diversity in the workplace has long been valued as a way to introduce new ideas, but researchers have found other reasons for cultivating heterogeneity. Information was processed more carefully in heterogeneous groups than homogenous groups, according to “Is the Pain Worth the Gain? The Advantages and Liabilities of Agreeing With Socially Distinct Newcomers,” by Katherine W. Phillips, Katie A. Liljenquist and Margaret A. Neale, published in Personality and Social Psychology Bulletin. Social awkwardness creates tension, and this is beneficial, the study found. “The mere presence of socially distinct newcomers and the social concerns their presence stimulates among old-timers motivates behavior that can convert affective pains into cognitive gains” — or, in other words, better group problem solving.

“When people don’t fit the organization, they don’t feel comfortable. They often don’t get selected, and if they do, they don’t enjoy their experience and they leave.” –Nancy Rothbard

Culture Clearly Expressed

Of course, it’s more efficient to focus on a set of corporate values rather than personal cultural traits from the start. Bonding with a potential employee about Scotch or scuba diving as a guide for whether he or she would make a good co-worker is “actually antithetical to cultural fit,” says Wharton management professor Sigal Barsade. A better test revolves around values: “How much of a team player are you? How detail-oriented? What type of emotions do you tend to display or suppress — anger, fear, love? The only way that culture in the workplace is effective is if there are sets of values that help the company achieve its strategy,” Barsade notes. “When there is thoughtfulness around what the values are and you tie that to hiring, then you have best hiring practices.”

It’s wise for companies to have not more than three core organizational values, and to communicate those values clearly in the hiring process, Barsade says. “For example, you can have values around being results-oriented, or if you are a financial services firm you attach high value to paying attention to detail,” she notes. “There are companies that would like to be more innovative — not just that the products are innovative, but also that HR is being innovative and the cafeteria staff is being innovative. There are values of ethics, of teamwork, of respecting people and diversity, of customer focus and more.” She adds that there are values based on a firm’s emotional culture: “For example, the degree to which you are allowed or should be having fun, allowed to show anger, or expressing companionate love — that is, showing affection, caring, compassion and tenderness for other people you work with.”

Structured interviews can help ferret out some of these qualities. “It will vary by position and company, but everyone should get the same questions, so multiple interviewers are asking the same questions that are framed, among other things, as they relate to values,” Barsade suggests. “If there is any way to see the candidates in action or give them an opportunity to display the behavior, that can work. You want to set up a fair, consistent, transparent hiring practice that really allows you to understand whether people share the values of the organization.”

The most critical thing, Barsade says, is that “leadership has to enact the culture – [it] has to believe it and live it. Then … make sure the structure supports the culture — the rewards system, the policies.”

So, in their search for the best hire, are companies heeding the wisdom of compelling studies and data arguing against gut instinct and in favor of a more systematic search for cultural affinity? “I would argue that it’s not happening enough,” says Barsade. One reason, perhaps, is that many are still resistant to certain tools, like structured interviews, that can help sift for evidence. One study, “Belief in the Unstructured Interview: The Persistence of an Illusion,” by Jason Dana, Robyn Dawes and Nathanial Peterson, found that interviewers who conducted unstructured interviews were worse at predicting future performance than when they were given access to the interviewees’ background information alone.

Still, there is more awareness than there once was, and some say we are seeing a steady awakening of employers to screening for cultural fit. Says Klein: “Slowly but surely, yes, the best companies are.”

The alternative is dealing with the consequence of employees who, when asked how badly they want to find a new job, respond like Cynthia. “Oh boy, in a big way,” she says. “And I will.”