Is your organization healthy? Your first inclination may be to look at the company’s bank account, budget, or pipeline. But what we’re talking about is organizational health – when your company sets itself up for success to be high-functioning and high-performing in the long term.
In fact, most healthy organizations see successes in three main areas: Employees are happy and productive, customers are satisfied and loyal, and the company regularly matches or exceeds industry benchmarks for financial performance.
But before you can start clocking in these wins, you need to know where you stand on the spectrum of organizational health. Below are six key elements of organizational health, as well as some research-backed tips on how to improve each aspect to create a stronger future for your company and employees.
Organizational alignment should be at the top of your organizational health checklist. If your organization is aligned, everyone in the company — from leadership to middle managers to employees — is working toward achieving a common goal. Additionally, alignment gives people a model to understand what success looks like and clear daily priorities to meet objectives.
Patrick Lencioni, often known as the pioneer of organizational health, encourages the following framework to improve organizational alignment:
What’s a sure-fire way to show you care about your employees? Creating a well-being strategy with a range of people-first policies to support your employees.
In fact, the Journal of Management Studies finds that when People teams introduce programs that prioritize employee well-being – and mental health in particular – the organization’s performance improves.
To better prioritize employee well-being, consider:
When you equip employees with templates for 1:1 check-ins with their manager, you empower them to guide the conversation, celebrate wins, and discuss potential roadblocks.
Creating a healthy workplace not only supports your people, but can help your bottom line. An AARP study showed that when companies promoted family-friendly policies, like flexible working hours or dependent care, their share price increased. Companies with a higher number of female employees that prioritized such policies also saw a jump in sales.
Healthy companies use fair and equitable practices, helping ensure that all employees receive the same treatment and opportunities.
In fact, findings reported in BMC Psychology suggest organizational justice is “an essential predictor of organizational success.” Additionally, workplaces deemed fairer have lower turnover rates.
To reflect your company’s commitment to fairness, prioritize making equitable decisions when it comes to compensation, benefits, and promotions. It’s best practice to:
To improve your organizational justice practices, slice and dice your people data within a people operations platform to make the best decisions for employees and your organization.
In a healthy company, workflows are clear and communicated across the organization. As a result of these processes, employees understand how the company achieves goals and makes decisions. Unfortunately, 59% of businesses said dysfunctional and fragmented processes blocked them from moving successful projects forward.
Luckily, you can establish clear processes and workflows by:
Empower your people to access their own information – no back-and-forth emails with HR required.
A healthy workplace provides opportunities for employees to learn new skills and grow their careers based on their unique strengths and goals. A survey of 60,000 companies found organizations that prioritize development by providing regular manager feedback and training opportunities for career growth experienced higher levels of employee engagement.
To promote a culture of learning in your organization, consider offering:
Want engaged and motivated employees? Of course you do. To help employees achieve work satisfaction – and for your organization to reach its goals – you want your people to understand and believe their work is purposeful.
A McKinsey study found that 80% of employees who strongly believe their work is meaningful are more productive than those who don’t. Not only does having purposeful work benefit employees, but it can also help organizations as a whole. Having a shared understanding of purpose increases employee engagement and can lead to improved job satisfaction, higher morale, and better communication between colleagues.
To help employees find meaning in their work, you should:
If you’re ready to start improving your organizational health, it’s time to complete an organizational health assessment, which helps identify areas of strength and areas that need improvement.
Rajesh Krishnan, a McKinsey partner, suggests reevaluating your organizational health every two to five years to see where you are and what’s likely to lead you to success. And the most important aspect, he says, is determining what set of behaviors work. He explains: “Once you move the expectations from ‘let’s follow a recipe for success’ to the behavior being the unit at which change occurs, it just makes it tangible. I can get specific actions. If I act, I will improve the health of my team. As the statistics say, when that happens, the performance improves as well.”
Ultimately, you’ll gain valuable insight into the overall health of your company and make necessary changes to reach your desired objectives so you – and your people – can thrive.
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