Understanding organizational health initially means you need to put aside your thoughts about what health is. Most of us think about our physical or mental well-being when discussing health. Organizational health, on the other hand, is what company executives want to achieve.  Optimum organizational health includes efficient performance standards and procedures that are more likely to foster overall success.

We engage in practices to regulate a number of interconnected systems in the ecosystem of the human body, including the physical system made up of organs, muscles, and tissue, as well as our mental and energetic/spiritual systems.  Business health can be impacted by our deliberate conduct, just like our physical health, where we have tools to bring us back to stasis.

Organizational Health Vs. Physical and Mental Health

The focus on organizational health is just as important as focusing on the traditional determinants of company performance. Organizational health is the organization’s ability to align, execute, and renew itself faster than its competitors.

Building a strong ecosystem with the ability to change over time and adapt to new situations and difficulties is the key to achieving the ultimate competitive advantage.

Consider your own body. You can repeatedly use over-the-counter drugs or even antibiotics for bacterial infections when you are ill. Alternately, you can design systems that ensure you have a clean environment, balanced food, and enough rest and exercise.

This translates into the development of core values, the creation of quarterly growth plans, and the implementation of routine employee check-ins. A healthy ecosystem will be developed differently depending on the history, rivals, team composition, and shared values of each firm.

The ability of an organization to align, carry out, and refresh itself faster than the competition in order to sustain excellent performance throughout time is organizational health. These management philosophies are not hippy new age.

According to research, a company’s overall health determines 50% of its long-term financial success. To obtain organizational health, there are seven things to strive for within your company.

Organizational Health

Seven Variables of Organizational Health

Organizational health is comprised of a variety of different aspects, including psychological, physiological, and social aspects. There is no one sure way to keep an organization in place while ensuring that it is in ideal physical and mental health. In spite of this, the following seven significant factors all have a positive influence on the health of the organization.

Organizational Cohesion

Organizational alignment ensures that everyone in the workforce understands the business’s mission, values, and strategy. The first thing that comes to mind when the subject of organizational alignment is sales and marketing alignment.

Although every department, including finance, IT, human resources, customer support, etc., are affected by organizational alignment, consistent work is required to align the organization. It’s important to convey a wider picture outlining how team members’ successes contribute to the firm’s overall success, even while each team member may grasp their smart goals and career development plan with clarity.

The establishment of a knowledge base that serves as a single recorded source of truth is one of the methods utilized to achieve organizational alignment. This tool will promote transparency and enable collaboration among staff members working in various departments.

In order for organizational health alignment to occur, you must have the following:

  • Interdisciplinary cooperation
  • Shared aspirations and goals
  • A final objective or goal
  • Goals for individual and organizational performance that connect to the business strategy
  • A grasp of each other’s respective roles

Undoubtedly, organizational alignment has numerous advantages, including enhanced employee relationships, employee loyalty, and a cohesive workforce working toward the same objectives. These advantages together form the basis for a healthy firm.

Clearly Communicated Workflows and Processes

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

The dominance of remote labor has made communication management a significant challenge for distributed enterprises. With the move to remote working, 33% of employees think communication has grown more difficult. Additionally, management at non-tech organizations struggles to address poor communication among office-bound and front-line employees.

It is evident that few businesses can boast excellent communication. With this decrease, what does it imply for organizational health?

Poor internal communication causes greater employee turnover in 35% of businesses. A healthy organization addresses the issue by developing extensive regulations that govern the communication between stakeholders, employees, and the community at large.

The Welfare and Advancement of Employees

Managers should change their attention from monetary incentives to employee welfare in order to sustain a healthy firm. Workplace happiness influences a variety of factors, including employee mental health, workplace safety, physical health, social relationships, and work attitude.

Many companies increased spending on mental health services for their businesses in 2021. This includes paid leave policies, providing financial assistance for setting up home offices, and increasing virtual employee engagement initiatives.

Employees expect their employers to help them balance their work and personal lives as workforce priorities change. The ability to combine 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 time can all help you achieve this.

Employee Development

Another crucial aspect of organizational health is employee development, which is closely related to happiness. Without professional development, employees lack the confidence to hone their talents and eventually become worn out by doing the same things over and over again.

Organizations must implement professional training programs and create career development plans for each new hire in order to facilitate employee development. It makes sense to support the growth of soft skills and ongoing employee skill development.

Institutional Equity

Organizational justice, often known as organizational fairness, governs how employees feel they are treated fairly at work. The idea has an impact on how the staff feels about the work they undertake.

The main elements influencing employees’ perceptions of fairness in an organizational context are pay and career advancement. Gender equality, inclusion, and gender equality are also important.

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

  • Basic methods of assessment
  • Written paths for career growth
  • An open framework for decision-making
  • A full perks package

By putting these practices into place, you’ll raise employee perceptions of organizational justice and foster a happy, productive workplace.

Finding Value in Work

Meaningful work gives workers the feeling that the tasks they perform daily contribute to something larger than themselves and have value. Your employees will have the confidence to take on challenging tasks and complete unpopular tasks due to this.

It is not possible for monetary gain to be the single factor that drives people to perform at their highest level. It is also difficult to develop a healthy firm without providing your workers with a purpose. This is due to the fact that a great corporation is continually motivated by individuals who take the initiative.


There are other aspects that contribute to the health of a firm besides employee engagement. In a market that is evolving at a rapid rate, the leadership position can be taken only by companies that are motivated by change. In recent years, the capacity for digital innovation has rapidly become one of the primary concerns of companies all over the world.

Creative thinking, cognitive flexibility, and the exchange of ideas are the three pillars supporting your company’s innovation ability. Each of these is an element that contributes to a healthy culture in the company.

Building Organizational Health

Understanding the importance of organizational health is just the beginning. In order to build organizational health, you should follow three steps.

Recruit the right team: The best way for leaders to ensure the health of their organizations is to put together effective executive teams. To get there, you need to select leaders who can flourish in a positive working environment. It is essential to be open and honest about how the leadership team will function so that anyone who does not approve of the way things will be run can willingly step down.

Build trust and handle disagreement in the management team: To build a high-performing team, the first step is to make sure you hire the right people for the job. Leaders that are successful are able to “read between the lines” and identify hidden sources of tension. It’s vital to pay attention to things like body language, who’s doing the talking, and tone of voice.

Clarify communications: The next step in maintaining organizational health is for the management team to master trust and conflict before moving on to the next phase of communicating clearly and reinforcing that clarity throughout the enterprise. Because of this, the heads of departments need to establish clear communication lines and keep an eye out for indications of disagreement and misalignment.


A healthy organization takes time. In today’s market, it can be a significant investment for leaders who want to boost organizational productivity, develop business culture, and retain top talent.