The essentials of organizational health and improvement strategies

Company leaders may wonder why some businesses succeed each year while others struggle to stay afloat. One of the main reasons is an organization’s health. While there isn’t a linear way to measure this, C-suite executives can learn by looking internally.

In the business world, health has many elements. Employee health impacts whether a company will succeed or fall behind its competitors. While organizational health encompasses more than team member well-being, a company could struggle without a focus on employee health.

How can companies learn more about their organizational health and improve employee well-being for better performance and engagement? We’ll discuss this and more here.

What is organizational health, and why is it important?

Organizational health is a company’s ability to unite and respond to a shared goal. This is showcased in how a leader makes decisions, allocates resources, operates daily, and leads their team. The concept arose from occupational health, which broadly focuses on building a workplace where employees feel valued. Organizational health connects that idea more explicitly to the overall success of a business.

Ultimately, companies must adapt to a constantly changing world to stay competitive and healthy. This includes responding to employee needs and meeting their requirements as their physical and mental health adjusts.

Companies that pursue organizational health are investing in the well-being of their workplace, no matter the situation or season. As a response, organizations could experience:

Enhanced performance and productivity

A healthy company is more likely to achieve its strategic goals and maintain high levels of productivity. In fact, businesses with good organizational health consistently outperform those that aren’t. For instance, McKinsey & Company found that healthy organizations are 59% less likely to show signs of financial distress than unhealthy ones.

Employees in such organizations are generally more motivated and efficient, leading to better overall performance. This makes it extremely valuable for both internal and external growth. Additionally, industry reports show a $1.47 return on investment for every dollar spent on corporate wellness initiatives.

Employee satisfaction and retention

Employee engagement is a huge part of organizational health. However, Gallup reported that engagement is at an all-time low, with only 30% of full- and part-time employees feeling highly involved and enthusiastic about their work and workplaces. But creating a healthier work environment can change that.

Organizations that prioritize health can create a supportive work environment, leading to higher employee morale, reduced stress, and lower turnover rates. You've probably noticed in your organization that satisfied employees are more engaged and contribute positively.

Resilience and business continuity

Healthy companies are better equipped to navigate challenges and adapt to changes in the industry or market trends. This resilience ensures long-term sustainability and growth.

According to the American Psychiatric Association, employers that build a resilient workforce can directly help employees handle work stress better and develop protective factors against stress. Also, raising resilience improves team members’ self-esteem, betters self-control over work events, provides a sense of purpose in life, and upgrades employee interpersonal relationships.

Creativity and continuous improvement

A healthy organizational culture fosters creativity and innovation. In this environment, employees feel safe proposing new ideas and improvements, driving growth and competitive advantage. Additionally, prospective employees are more likely to be attracted to and stay with an organization known for its healthy work environment. This helps build a talented and dedicated workforce.

Better compliance and risk management

Healthy organizations are better at managing risks and complying with regulations. This reduces the likelihood of legal issues and highlights a company’s reputation. A business’s internal policies can ensure that all employees have what they need and the avenues to ask for what they don’t.

Pillars of a healthy organization

Without a target to aim for, businesses may struggle to assess their health levels. According to McKinsey & Company, organizational health comprises three elements:

1. How well the entire organization rallies around a common vision and strategy
2. How well the organization executes its strategy
3. How well the organization innovates and renews itself over time

To ensure companies excel in these areas, they must assess their existing internal processes and operations. Additionally, they should center their business strategy around these pillars:

Employee well-being and development

A healthy organization maintains employees’ mental, physical, and social health. It also boosts developmental opportunities for constant growth. As workforce priorities shift and change, a company leader’s role is to invest in mental, physical, and emotional health programs that can help employees feel supported inside and outside of work.

Additionally, constantly looking for ways to help workers improve their skills and move up within a company highlights an organization’s commitment to its employees. Organizations can create a career development plan for each individual and introduce professional training programs to encourage ongoing learning.

Organizational alignment

Organizational alignment ensures teams have a shared vision of their company’s goals and values. This includes all company departments, from sales, marketing, and finance to IT and human resources. While every employee may understand what they want to accomplish, they can’t achieve organizational alignment without focusing on the bigger picture of how each person’s successes correlate with the success of the entire organization.

Clear communication

Effective communication is key for any company, especially those with many employees. Clear communication checks that processes and workflows are clearly defined and communicated. It also ensures that each team member understands what’s expected of them and has the means to accomplish it.

Meaningful work

A healthy organization highlights purpose-driven work. In this environment, employees may feel they’re being challenged and making a positive difference. People who perceive their work as meaningful are more likely to be engaged and motivated. Per McKinsey & Company, when employees find their work purposeful, their performance improves by 33%, they’re 75% more committed to their organization, and they're 49% less likely to leave.

Engaged team members are also less likely to experience burnout and are more resilient in the face of challenges. They often put in extra effort, show enthusiasm, and are dedicated to working alongside colleagues to achieve organizational goals.

Innovation

While engagement is critical, it’s not the only facet of good organizational health. Digital innovation is also high on the list of characteristics. Organizational health typically creates a positive culture where employees feel valued, respected, and empowered to introduce new processes and ideas. This empowerment fosters a sense of ownership and responsibility, encouraging individuals to innovate and improve their work processes.

Healthy organizations also allocate resources efficiently to ensure employees have the tools, technology, and time necessary to do their work well. This often involves introducing time-saving resources like artificial intelligence. When a company stays updated on digital technologies, it can improve processes and make work more efficient, leading to employee satisfaction and accomplishment.

Strategies for improvement

Improving organizational health starts with a focus on employee well-being and workplace culture. Here are several strategies that organizations can implement:

Use data to understand employee needs

Employers can take advantage of available information to better track patterns of employee behavior. This could include HR analytics software, feedback and reviews, engagement surveys, productivity metrics, and PTO usage.

Promote work-life balance

Organizations can offer flexible working hours or remote work options and encourage time off to promote the importance of mental and physical health. This can also help employees manage their work and personal responsibilities effectively.

Enhance physical health programs

Implementing wellness additions to employer-provided health care plans can be beneficial. Such additions could include fitness challenges, health screenings, and educational workshops on nutrition and exercise. Employers can also provide access to on-site gyms, subsidized gym memberships, or partnerships with local fitness centers.

Support mental health needs

Healthy companies focus on mental health, providing access to counseling services, employee assistance programs, stress management techniques, and mindfulness workshops. In addition, employers can allow employees to take mental health days to recharge and address their mental well-being.

Foster a positive work environment

A company's work environment directly impacts employee well-being. Employers who create an inclusive and supportive work culture can improve organizational health and help team members feel valued and respected. It’s also important for companies to encourage open communication between employers and employees, providing platforms for employees to voice their concerns and suggestions.

How Workers’ Health 360® improves organizational health

Sustained organizational success hinges on a leadership team analyzing data to identify the behaviors that will help achieve performance goals and better employee wellness. This information can aid in determining the type and scale of improvements a company should target.

Workers’ Health 360 gives organizations a clear view of their worker population, completing the circle of organizational health and improving employee well-being. This tool integrates data from multiple sources, including workers’ compensation, pharmacy utilization, medical plan data, and short- and long-term disability.

With a holistic view of data, employers can be more informed on areas to target to improve processes, fine-tune policies that reinforce healthy and safe behavior, and promote healthy employees to drive a productive business. Bringing risk management and HR teams to initiate strategies can promote organizational alignment. Also, clear communication about workflows for injured employees can improve well-being and return-to-work efforts.

When a leadership team has insight into their employee data, they can better support their workforce and build a safe culture where employees feel supported and have what they need, ultimately driving organizational health.

Want to learn how Workers’ Health 360 can improve visibility into your employee population? Contact a specialist to get started.