In the past, businesses relied on financial indicators to determine their overall success. Financial indicators offer useful data on the current and historical financial health of a business, but they offer little insight into the success of non-financial strategic goals which predict future performance. 

To present a more balanced view of the results for the long and short term, organizations incorporate various Indicators, often known as perspectives, might include clients, stakeholders, employees, safety, effectiveness, waste, learning, growth, processes, and operations. To provide the finest view of current and future performance, an organization must decide which viewpoints best depict its business model, as eventually; the Organizational Framework is built upon these viewpoints. 

What is Organizational Health?

Organizational health is a company’s capacity to create, communicate, and follow common business strategies. For instance,  a highly engaged workforce can help build,  a company’s capacity to create, communicate, and adhere to a common business strategy. The ability of your teams to adapt to organizational change is an important component of organizational health. It all comes down to having proactive and creative workforce.

To create a lasting impact, we must set long-term performance targets. In order to achieve this effect, we require capable individuals who contribute towards attaining organisational goals. 

Mckinsey studied over 1500 businesses in 100 countries for the past ten years. They have been compiling information from staff members and management regarding initiatives taken to strengthen organizational health. They have also discovered that these initiatives correlate with improved financial performance.

Their study has demonstrated that companies focusing on  organisational health not only improve their overall well-being, but also display observable performance increases in 6 to 12 months. Furthermore, it helps organisations handle digital transformation activities more successfully.

6 Pillars of Organizational Health

Various psychological, physiological, and social components make up organizational health. There is no “secret ingredient” for having a perfectly healthy organization. 

Nevertheless, the following six important variables have a favourable impact on organizational health.

1. Organizational Alignment Employee

Organizational alignment ensures that everyone in the workforce understands the mission, vision and values.. The key pillar is to establish an effective strategy to communicate these core statements.

Organizational alignment ranges from discussed sales and marketing to  finance, IT, human resources, customer support, etc..

Consistency is required to align an organization with its goals. It is important to convey a bigger picture outlining how team members’ success relates to the overall success of the organization. Even though when each team member understands their Smart goals and career development plan.

A single source of documented and authentic knowledge is a proven way to achieve organizational alignment. This will promote transparency and enable collaboration among staff members from various departments.

2. Alignment consists of the following components:

• Interdisciplinary cooperation
• Shared aspirations and goals
• The picture of the final objective (i.e. Company mission)
• Goals for individual and organizational performance that are connected to the business strategy
• An understanding of each other’s respective roles

• Clearly Outlined Processes and Workflows

Achieving organizational alignment requires excellent communication. People managers work hard to maintain open and honest communication within firms, regardless of the industry.

The dominance of remote work has made communication management a significant challenge for enterprises with people working from multiple locations. 

Management at non-tech companies struggle to address poor communication among office-bound and front-line workers.

Evidently, few businesses are boastful about having effective communication channels but what does it imply with regard to  Organizational health?

Poor internal communication causes an increase in employee turnover rate for 35% of organizations, according to Whatfix.com. A healthy organization addresses the issue by developing extensive regulations that govern the communication between stakeholders, employees, and the community at large.

3. Employee Well-being and Development

For an organization to be healthy, its employees must stay happy.

People Managers should change their attention from monetary incentives to employee welfare to sustain a healthy firm. Workplace happiness is influenced by a variety of factors including:

• Employee mental health
• Workplace safety
• Physical health
• Social relationships
• Work attitude

88% of the companies planned to increase their spending on mental health services for their businesses in 2021, according to the same website mentioned in the previous point. Many of them have increased paid leave policies, provided financial assistance for setting up home offices, and increased virtual employee engagement activities.

Employees expect their employers to help them balance their work and personal lives as workforce priorities change. The ability of combining work and life has grown to be important for employee well-being. Offering flexible working hours, emphasizing production over hours worked, and encouraging staff to take vacation can all help you achieve this.

Another crucial aspect of organizational health is employee growth, which is tied to happiness. Without professional development, employees lack the confidence to hone their talents.

4. Organizational Fairness

Organizational justice, often known as organizational fairness, governs how employees feel at work with respect to fair treatment. The idea here is that how the staff feels about the work they undertake.

The main elements influencing employees’ perception of fairness in an organization are wages and career development. Gender equality and inclusion are also important.

Organizational fairness is the hardest thing for an employer to monitor. The emotions of your staff are beyond your control. The only thing you can do is to introduce open workplace practices, such as:

• straightforward assessment techniques
• written career development paths
• open decision-making framework
• inclusive benefits

5. Meaningful Work

Let us define ‘meaningful work’ before we discuss how these environments promote organizational health. Jobs that gives an employee a sense of meaning and value in their everyday activities is referred to as meaningful work. It gives your workers the guts to accept and execute difficult and unpopular assignments.

6. Innovation

Employee engagement is not the only factor in organizational health. Recently, the capacity for digital innovation has elevated to a top concern for businesses everywhere. Only businesses with the drive for change can take the lead in a market that is changing quickly.

The three foundations on which your company’s capacity for innovation rests are creative thinking, cognitive flexibility, and idea sharing. Each of these is a characteristic of a positive workplace culture.

The primary factors that encourage original thought and innovation are:

• Tolerance for failure
• Active listening
• Reduction of organizational bureaucracy
• Flexible leadership

When all of these elements are balanced, a workplace becomes both comfortable and challenging. As we have seen, money cannot be the only motivation that makes people deliver their best effort. Organizations must implement professional training programs and create career development plans for new hires to facilitate employee development. Hence, a company must support the enhancement of soft skills and ongoing employee skill development.

It is also challenging to maintain a healthy business without a healthy workforce because proactive individuals drive a successful organization.