Organizational Health: What It Is and How HR Manages It?

Introduction To Organizational Health 

Organizational health is a measure of the effectiveness of the organization. It’s a holistic approach to organizational success that focuses on creating an environment where employees can fulfill their potential and achieve the company’s goals. 

What organizational health measures are the well-being in which employees are engaged and performing at their best. It’s important to measure because research shows that when people feel a sense of connection with their coworkers and managers, they’re more likely to be productive, innovative, and enthusiastic about their work — all things that make companies more successful. 

Other concepts, such as corporate culture, leadership, and management, are studied along with organizational health and safety culture. It is often compared with individual health, as it is applied to individuals, companies, or groups. 

Organizational health also relates to how someone feels mentally at work; this can extend beyond just feeling happy or healthy physically and having self-esteem and confidence in what they do every day at work. It’s important to note that organizational health does not refer to how much money the company makes or whether it has succeeded in becoming profitable. Instead, it relates to how the well-being of your organization is functioning as a whole. 

What Is Organizational Health? 

Organizational health is the state of being in an organization that can achieve its goals, objectives, and values. In other words, it refers to how healthy or well-being your organization is functioning. It can be measured by its ability to achieve its goals, objectives, and values and how satisfied customers/clients are with their experience with the company. 

The function of organizational health is to reflect how well an organization can achieve its goals, objectives, and values. It’s important to note that organizational health does not refer to how much money the company makes or whether it has succeeded in becoming profitable. Instead, it relates to how the well-being of your organization is functioning as a whole. 

Organizational health is an important concept, but it’s not simple. There are many ways to define organizational health and the factors influencing it. HR professionals must understand how their role affects employees’ perceptions of organizational health to manage the workplace environment better. 

In recent years there has been a lot of talk about the rise of entrepreneurship, but in reality, there is a greater number of people working in large, bureaucratic organizations than ever before in the world today. A lot of research has been done by Bain & Company that shows that 94% of the growth challenges that businesses face today are internal, which is a huge shift from even a decade ago – when most challenges were external (technology, supply chain, etc.). 

Many factors influence organizational health. Some of the most important ones include the following:  

• The ability to meet customer/client needs, expectations, and requirements (e.g., how well does the company meet the demands of its customers/clients?) 
• The extent to which employees feel valued by the organization (e.g., do employees feel respected by their managers?) 
• Employees’ perceptions regarding their managers’ behaviors and attitudes toward them (e.g., do employees feel supported by their managers?) 
• Employees’ perceptions of the fairness and effectiveness of organizational policies and procedures (e.g., do employees think the company follows its rules?) 
• The extent to which employees feel they have the resources and support they need to do their jobs well (e.g., do employees feel their managers are willing to provide them with whatever training is required?). 
• The extent to which employees perceive that their work has a purpose beyond simply making money for the company (e.g., does everyone in the company understand how their work contributes toward meeting organizational goals?) 

Importance of Organizational Health 

Organizational health refers to the state of an organization that can perform at its best. An organization can carry out business activities and achieve its objectives stably and sustainably. 

Organizational health doesn’t just happen; it needs active maintenance from HR professionals, who ensure that employees feel engaged, know what’s expected from them, and have opportunities for professional growth. When you think about it like this, it becomes clear how important organizational health can be for your firm’s success—and that makes it worth taking time out of your day to talk about how HR professionals manage this vital aspect of employee engagement. 

Organizational health is based on a set of principles that include:  

• A focus on the customer experience and employee engagement  
• A culture where people feel valued, respected, and listened to  
• A sense of community and belonging among employees 
• A commitment to continuous improvement  
• A belief that people are the most critical asset of an organization  
• An ability to provide a safe and healthy workplace 

Pillars of Organizational Health 

When you’re working in a genuinely healthy organization, you will experience six things: 

• Awareness of the business purpose, vision, and value 
• A shared understanding of what it means to lead with excellence and integrity 
• The freedom and support to make decisions based on knowledge, skills, and experience 
• The ability to learn from mistakes without fear of judgment or punishment 
• On-going access to resources (including training) so people can develop their skills as required. 
• A culture of trust, where people feel safe to be themselves and share their ideas. The capacity for continuous improvement 

You can start by asking yourself a few questions:  

• What do I need to know?  
• What are my goals?  
• What is the current state of organizational health? 
• How will we measure success?  
• Who needs training and development opportunities to achieve these goals?  

Once you have answers to these questions, you can begin taking action. 

The first step to creating a healthy organization is to be aware of the signs that it’s not. If you’re experiencing any of the following, your business may not be as healthy as you think. People are disempowered, disengaged, or frustrated with their work. There needs to be more clarity about roles, responsibilities, and authority. You don’t have a plan for what to do next in the event of an emergency. People constantly work on more than one project at once, leading to poor-quality outputs. 

There’s a lack of communication, causing confusion and misunderstandings. There are frequent conflicts between team members. You don’t have a clear idea of what success looks like. 

There’s a lack of accountability, meaning people aren’t held responsible for their actions or duties. You don’t have the right tools or resources to do your job effectively. There are too many meetings and not enough real work getting done. Your employees don’t feel valued by their employer. 

5As of Organizational Health and How to Measure Organizational Health 

• Awareness: When employees know their roles and responsibilities, they will be more likely to perform at a high level. 
• Accountability: An empowered employee can be held accountable for their actions or inaction. 
• Advocacy: Employees should be able to advocate for themselves and the individuals around them to create positive change. 
• Assessment: The HR department needs to assess the current state of organizational health to develop and implement strategies for improvement. 
• Action: Once you have identified what needs improvement, it’s time to take action! 

If you are new to the role of HR or have been doing it for a while, this can be an overwhelming task. The first step is to assess your organization’s current state of organizational health. This will help you determine where the gaps are and allow you to develop strategies for improvement. 

Once you have identified what needs improvement, it’s time to take action! If you are new to the role of HR or have been doing it for a while, this can be an overwhelming task. The first step is to assess your organization’s current state of organizational health. This will help you determine where the gaps are and allow you to develop strategies for improvement. 

The next step is to create a roadmap for improvement. This will allow you to set goals and measure progress along the way. As you implement your strategies for change, it’s essential to monitor their effectiveness so that you can adjust them if needed. 

How to Improve Your Organization’s Health? 

It is crucial to understand what organizational health is to ensure healthy organizational health. Organizational health is the degree of alignment between the organization’s goals, processes, and behaviors. 

Organizations can improve their health by focusing on these three areas: 

Develop Clear Objectives 

This will help employees understand what they should work toward as individuals and as a team. Objectives should be measurable, achievable, and realistic so that everyone involved knows how they can contribute to them (and whether or not those contributions are being made). They should also be connected to broader company goals so that all employees understand how their work contributes to the business. 

Setting Realistic Expectations  

It can be done for performance metrics such as deadlines, quality standards, or quotas—but not too many!  

It’s important that expectations are fair but also flexible enough so that they don’t become overwhelming or cause anxiety among workers who may feel they don’t have enough time/resources/tools/support from management etc. 

Meet the Employees 

It’s also important to check in with employees regularly and ensure they feel supported, challenged, and motivated by their work. 

Conclusion 

It’s important to note that organizational health is a process, not a destination. It requires continuous work and attention from the organization’s leadership team and HR professionals. The good news is that many tools can help you identify areas of weakness in your organizational health and develop strategies to address them. We hope this blog answers your question, “how does human resource management help optimize company performance?” If you have doubts, we’d suggest you enroll in UNext Jigsaw’s Certificate Program in People Analytics & Digital HR in collaboration with IIM Indore for professional-grade knowledge and IIM Indore certification.