Organizational Health 101

As organizations respond to the re-group of post COVID business, new formulas for motivating talent have fluctuated over the past five years. Despite the obvious push towards sustainability, more equitable and inclusive work settings, and decreasing employee burnout, orgs remain in contemplation about “how to” motivate their employees.

Mckinsey & Co surveyed over 1000 employees seeking to ascertain what motivates performance between late 2023 and 2024. Results of the study demonstrated that when companies articulate a strong consistent performance management system, it is most effective for the company’s employees. The results also showed that goal setting only has impact when measured, and should include a mix of both individual and team level goals which clearly link to the org’s goals. C suite managers who involve employees in the performance process and can link their individual goals to their teams and the org at large, demonstrate the most ROI.

Every company needs to assess the performance management system that’s in place such as to constantly increase employee satisfaction, performance and quality of life. Because McKinsey recognized the constant change and growth over time, they developed an Organizational Health Index (OHI) that measures long term organizational success, and the traits that comprise said success. The three largest predictors of an organization’s success include implementing strategy, aligning around a common vision, and regenerating over time. {Source} What emerged from the study were traits that predicted organizational effectiveness. Some of them are highlighted below.

1.Having a common purpose and explaining the “Why” of the common purpose, assists employees in feeling empowered in their individual roles. Employees are empowered to use their own judgement and understand why the company seeks to achieve their goals, vs simply understanding what the goals are.

2.Authoritative leadership is no longer effective in creating org change. Leaders who are “empowering and decisive” are more effective at promulgating organizational health.

3.Decision making that is driven by data not by feeling, promotes learning and creativity.
4. Organizations that seek to improve employee experience, where employees feel seen and heard, helps to retain talent and prevent burnout.
5. Tech investments should boost revenue and make work easier to have long term effectiveness.
6. Orgs that behave with social responsibility are 3.3x as likely to be healthy. [1]

[1] McKinsey Org Health Refresh Survey, 3,940 English-speaking employees across the United States (2,068 participants), the United Kingdom (525 participants), Canada (519 participants), Australia (433 participants), and Singapore (395 participants), conducted from May to July 2023.

Until next time,

Amy