“Organisational health is much more than profit and loss, it includes culture, employee happiness, functionality, effectiveness, operations, leadership alignment, innovation, and clear communication.” — Rukayat Odebiyi, People Operations Specialist.
In 2022, a senior marketing professional shared how she had to resign from a C-suite role at a startup in less than one year. With 15 years of experience in the bag across popular financial institutions in the country, “I’m not about to put up with a CEO who acts unreasonably,” she said.
Her decision is reminiscent of employees who would rather accept a pay cut to escape a toxic workplace, according to this report.
Every company thrives on multiple moving parts that are interdependent. When one part is untended, a company’s overall success is negatively impacted.
The common misconception that organisational health is solely measured by finances means more attention is given to increasing revenue margins while neglecting important factors like workplace culture and human capital.
This highlights the concept of organisational health which started becoming prominent in the 1900s when management theories emphasising equity, human relations, employee satisfaction, and group dynamics, among others, began springing up.
For Odebiyi, organisational health signifies the alignment and sustainability of all key elements within a company, including, finances, operations, employee happiness, leadership alignment, innovation, and clear communication. Only a culmination of these elements can promise an overall healthy company.
“An organisation could be very profitable but still have a toxic and hostile environment. Such environments promote unethical harmful behaviours and actions, ultimately causing stress-induced work, decreased job satisfaction, and even possibly physical and mental health problems for employees.”
To understand how a healthy organisation directly impacts business performance, Odebiyi suggests two indicators that should be considered.
Organisational Citizenship Behavior (OCB)
OCB describes an employee’s willingness to contribute beyond the core duties in their contract.
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While this can also be seen as a means of getting that feeling of personal accomplishment or job satisfaction and leaving a positive impression on the employer, it captures a tendency to always act for the good of the business beyond what each person is obligated to do.
High OCB signifies a positive and supportive work environment, leading to increased employee engagement and satisfaction. Common OCBs are altruism, conscientiousness, civic virtue, sportsmanship, and courtesy.
Productivity
This measures how efficiently resources like labour and capital are used to produce a specific output. Greater productivity translates to more work accomplished with less time or effort, ultimately boosting the company’s bottom line. Productivity can be evaluated by the quality of work produced.
But how do employers check employees’ loyalty and productivity?
Odebiyi shares five monitoring tools.
Employee pulse checks are short, regular surveys that gauge employee well-being and overall work environment sentiment.
- Employee absenteeism: Frequent absences can indicate a disengaged workforce or underlying issues within the company.
- Employee turnover rate: High turnover signifies a loss of valuable talent and expertise, often resulting from a negative work culture.
- Employee Net Promoter Score (eNPS): This metric measures employee loyalty and satisfaction within the organisation.
- Peer review and 360-degree appraisals: These feedback mechanisms provide valuable insights into employee performance and workplace dynamics.
True warning signs of an ailing company
“It’s no news that employee retention is more cost-effective than new hire. This is because hiring new talent results in losing a lot of productive time and has much more cost implications, whereas retaining and nurturing existing talent helps in increasing productivity, boosting workplace morale, and achieving long-term growth.”
A decline in organisational health can be detected through negative or unsatisfactory results from the earlier-mentioned techniques. However, the intensity of the outcome may vary across companies.
A proactive move would involve periodically investigating the following areas of concern:
- Increased absenteeism and turnover: Odebiyi notes that persistent turnover may damage a company’s reputation an affect the possibility of attracting top-tier hires in the future.
- Low employee morale and engagement
- Poor communication and collaboration
- Lack of innovation and creativity
- Ethical concerns and negative workplace behaviours
Addressing declining organisational health
- Identify the root cause: Is it burnout, overwhelming workloads, or a negative culture? Understanding the “why” is crucial.
- Focus on employee engagement: Implement creative engagement strategies that go beyond traditional methods.
- Invest in employee wellbeing: Prioritise employee wellness by offering programmes that promote relaxation and a healthy work-life balance.
“For instance, outsourcing your organisation’s leisure activities to hospitality experts like Culr who curate a memorable leisurely experience for employees and manage employee wellness initiatives (e.g. gifting and experiential lifestyle/leisure packages) will eliminate bias, giving new air and a feeling of safe space and comfort for employees to genuinely unwind.”
A healthy workforce translates to a healthy organisation and fostering a positive culture will have a good look on the business, ultimately causing a surge in productivity, and innovation.
