Organizational Health 2013


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A very brief overview relating to industrial/organizational psychology and organizational health. Much more specifics required to execute individual or organizational change.

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  • Research clearly demonstrates that due to the wear and tear on employees, the great recession has produced a workforce more cynical, less engaged and more distrustful of leadership. As we step back and take a big‐picture look at our workforce asking how engaged team members are regardless of the size of the organization is essential. Workforce engagement is not a touchy‐feely, everybody‐needs‐a‐hug‐to‐work‐harder issue. It’s based on a combination of behavioral economics, sociology and psychology built on a series of organizational behaviors studies with undeniable results. The simple fact is engaged employees at all levels are required today to weather storms, stay profitable and seize opportunities for growth in an ever‐changing global economy. “Employee engagement” is really "workforce profitability." The 2012 AFLAC Workforces Report shows 77% of those currently employed would leave to work for another firm if they could. Similarly the Society for Human Resource Management reports some 70% of HR professionals expect an increase in turnover as the economy recovers. Jack Welch, prominent business leader, used to advocate eliminating the bottom 10% of an organization every year. GE, once a believer, has moved away from that practice because it is too costly. There will always be a bottom 10 percent. GE now pays more attention to how employees perform according to stated company values in combination with performance measures. They clearly understand the bottom‐line value of employee engagement, and recognize the importance of working to improve performance rather than generating turnover.If GE can't afford the extra cost of replacing the bottom 10 percent of its workforce each year, imagine the impact of losing good performers — who, by the way, are usually the first to go. The most important asset of any organization in today's knowledge‐based environment is its people. Losing any of your key contributors, who have both understanding and proficiency in your organizational culture and processes, is prohibitively expensive. And then there’s the cost of training replacements. The Gallup organization has done tremendous work in this regard across global organizations of differentsizes, revealing opportunities for improvement in its bestselling book, First, Break all the Rules, and the series of books that followed. In addition to that work by Gallup, research by experts such as Howard Gardner (Harvard), Daniel Pink (Whole New Mind, Drive), Jim Collins (Good to Great) and others have formed a body of knowledge for how to improve organizational health.
  • The first step in any change process is admitting that what is occurring today is not what is needed to achieve success tomorrow. That applies whether individually or as organizations.
  • The Gallup organization has done tremendous work in this regard across global organizations of different sizes, revealing opportunities for improvement in its bestselling book, First, Break all the Rules, and the series of books that followed. In addition to that work by Gallup, research by experts such as Howard Gardner (Harvard), Daniel Pink (Whole New Mind, Drive, To Sell is Human), Jim Collins (Good to Great) and others have formed a body of knowledge for improving organizational health and workforce profitability.Beginning with Gallup, great managers effectively define and communicate expectations. At best, 50% of employees believe they know exactly firm performance expectations. Gallup research indicates when employees do know this that productivity increases between 5-to-10% and a reduction in on-the-job accidents of 10-to-20% occurs. Employees of course need the tools and resources to get the job done in expert fashion yet barely a third strongly agree these are provided by organizational management. Matching people to positions or adjusting job descriptions to better suit individual talents would seem to be common sense. Gallup’s work shows over two thirds of employees fail don’t believe they’ve been given the opportunity to perform their jobs to their ability. Yet the same research shows when job matching occurs a 33% increase in employee engagement significantly elevates organizational productivity. Consistent interaction between management and employees requires both immediate feedback and positive recognition. Employees are twice as likely to seek other employment over the next twelve months without adequate recognition. There is also a high correlation between employees feeling inadequately recognized and believing they are under compensated for their efforts. Gallup’s extensive research indicates increased productivity and revenue from timely feedback and positive recognition of team members.The opposite effect is that firms where employees feel like management treats them as numbers experience up to 37% higher turnover rates. A direct relationship between how employees feel their managers care about them, resignations and performance has been proven by Gallup globally. This includes encouraging personal development beyond the immediate tasks. Fully 40% of employees don’t believe professional development is encouraged, but statistics show all employees have an unwritten expectation of mentorship from someone in the organization. Employee engagement is much higher when someone is actively encouraging individual and organizational learning.
  • When organizational leadership is closed to team member opinions and ideas innovation and adaptability are lost. Less than half of all employees will say management or the organization is receptive to creative ideas from subordinates. Yet studies show that employee commitment to change and organizational executive increases greatly when followers can contribute to decision making. This level of hierarchal interaction actually contributes to connecting team members with the overriding organizational mission, giving direct reports a feeling of importance regarding their tasks and job, resulting in up to a 30% reduction in employee turnover. The primary reason for organizational performance improvement is a direct increase in subordinate trust of management as well as a reduction in on-the-job conflict. When conflict does occur, particularly due to members who are not contributing, increased levels of trust through engagement helps managers remove “slackers” who reduce the collaborative spirit and performance among the team. There are very few organizational functions which are not group project related in the current environment. While not necessarily the manager or leader, understanding that all employees need to have at least one best friend at work is crucial as it increases camaraderie, trust, engagement and performance from these relationships. Performance evaluations are often misused and ineffective, but Gallup’s work shows that great managers who are proactive in properly using such tools leads to employees believing the corporate compensation system is fair, remain with organization longer (stability in a knowledge worker environment) and praise the organization outside of work. This external support of the organization only increases as does organizational citizenship behavior by employees when leadership provides employees with learning and growth opportunities. Gallup’s work has shown repeatedly that team members who are challenged to increase KSAO’s directly relates to increased performance and productivity.
  • One definition of trust is being vulnerable to the actions of others with expectations that they will perform accordingly whether or not they can be monitored for compliance (Mayer, Davis, & Schoorman, 1995). Similarly distrust can be defined as poor expectations regarding another’s conduct (Lewicki, McAllister & Bies, 1998). Senge, Kleiner, Roberts, Ross, Roth and Smith (1999) discuss the importance of trusting those in leadership directly related to the level of commitment to the organization, change initiatives and outcomes. Low trust leads to low engagement and lower performance. Patterson, Grenny, McMillan and Switzler ( suggest that too much pressure is assigned trust in regards to truth within the organization, which is more related to motive and ability as well as the moment to which individuals at multiple hierarchal levels are involved (2002). We may trust leaders or team members in some regards but don’t necessarily have to trust them in all areas. “Organizations need leaders who can impart a persuasive and durable sense of purpose and direction, rooted deeply in values and human spirit,” (Bolman & Deal, 2003). One cannot do this if there is no trust between team members or organizational leaders. Zhang, Tsui, Song, Li, & Jia (2008) determined that the immediate supervisor in an employee-organization relationship is the most important and fundamental to organizational success in achieving desired outcomes. The above quote from Patrick Lencioni comes directly from his recent and highly important work on organizational health.
  • Best selling author and international organizational consultant Patrick Lencioni (2012) discusses how achieving organizational health requires leaders to be humble enough to overcome three biases: sophistication; adrenaline and quantification. Achieving organizational health is not as complicated as often perceived, but it does take time and trying to isolate multiple impacting variables in spreadsheets is in part what has led to the global economic crisis and in particular the state of organizations in America.Rather, Lencioni points out that one must build a collaborative, cohesive leadership team which builds trust and commitment, masters conflict, embraces (not just accepts) accountability and focuses on results. Organizational leaders must create clarity throughout the firm related to purpose, behavior, process and procedure, success measures, what is immediately important, and who is responsible. Once identified clearly, these answers must be over-communicated throughout the organization enthusiastically, repeatedly and reinforced. Lencioni’s work ties directly to that of noted Harvard Psychologist Howard Gardner.
  • Gardner (2006) discusses in clearly written detail the seven “R’s” required to change the minds, whether it is our own or that of others.Reason: Allowing members to understand the need for change.Research: Providing important information that supports the reason.Resonance: The understanding of change must reach to the core beliefs of members.Redescriptions: The basis for change must be expressed in multiple forms (numbers, graphics, etc.). Schein suggests that the stories which bind members together are the most important (Schein, 2004)Resources and Rewards: Members must have the tools they need to complete the change, and a reward for success (beyond simply keeping your job).Real World Events: Change will not be successful if it doesn’t relate to real life and what’s occurring outside of the organization.Resistances: Every human comes from their personal paradigms and resistance to change is inevitable, but can be overcome.
  • All of the previous discussions tie directly to a tremendous amount of research by the American Psychological Association Center for Organizational Excellence. The 12 rules discussion from millions of dollars of research globally by the Gallup organization as well as the discussions from Lencioni and Gardner all fall within these five larger categories. It is important to note that none of the experts or research previously cited suggest that there is a “one-size-fits-all” prescription for achieving organizational health, increased employee satisfaction, productivity and profitability. This is due to the fact that although organizations may be in similar or even exact fields, they do not all have the same leadership, structure, processes, markets, or employees. Too often organizational decisions are based on quantifiable data and spread sheets, completing ignoring along the way the qualitative data which may be gained from increased employee engagement. Just this year Biswas & Bhatnagar (2013) found that employee engagement has high direct correlations between positive organizational support, personal organizational fit (job roles), job satisfaction, organizational citizenship behavior and organizational commitment. Their research also points to the importance of antecedents and outcomes tied to employee engagement. Too often the existing organizational culture is ignored by leadership while attempting change believed to improve organizational performance, to the detriment of organizational health.
  • Pictured above (far left) is noted expert Edgar Schein whose work on organizational culture is foundational and critical to achieving successful change and outcomes for organizations today. The six categories listed must all be considered in the determination of the what, why and how that organizational health is achieved.Antecedents: The history of the organization including the founder’s vision. This also takes into account the specific industry and business environment (which varies), national culture (inter-related by unique) and the vision and behavior of senior leadership within the firm.Organizational culture includes: What may be observed (whether in mission, vision, values; communication; and practices and processes) about how the organization functions in comparison to discussed/promoted values and the basic assumptions employees hold about the organization and work practices. Many times there is a disconnect between what leadership and followers believe or apply meaning to.Structure & Processes: Are the reward systems in place for performance and does the existing structure and process of the organizational design impede or promote performance and improvement.Social Processes: How are new members integrated into the organization? What are the group dynamics? How transparent is decision making? How are decisions, processes, and resources communicated? How much influence (autonomy) do team members have? What is demonstrated by leadership behaviors and mentoring of all employees?Attitudes and Behaviors: Although always varied on an individual level, collectively what are the work attitudes, job satisfaction and motivation of units and teams within the organization as a collaborative whole which requires all parts to function to achieve desired outcomes.Outcomes: What are the desired outcomes in relationship to the mission, vision, values of the organization; how effective are members at achieving objectives; how innovative is the organization and to what levels are individuals and units able to manage the stress of reaching performance expectations.
  • It may be said that the mantle of Peter Drucker has in many senses passed to author and consultant Gary Hamel. His highly important work (2012) points out five key buckets related to organizational health and success in the current and future environments.VALUES: Trust in corporations (organizations) is at an all-time low, the urgency to rebuild the ethical foundations of capitalism requires a moral renaissance.INNOVATION: Margin-crushing competition (for profit or non-profit) is defended only by innovation, crucial for economic growth. Innovation is a mindset for every employee, but too often remains only a buzzword in meetings.ADAPTABILITY: If we are not willing to change individually and organizationally to the opportunities which arrive almost without notice we risk becoming Edsel.PASSION: Mediocrity is a competitive disadvantage regardless of the organization. We must find new ways to touch and motivate the human spirit in our work lives to survive, solve opportunities and prosper.IDEOLOGY: The days of “because I said so” are long past and principles will rule the next century over practice. Self-determination leads to freedom which requires a new ideology to achieve organizational health.
  • Returning to the ongoing work of the Gallup organization, consider this 2013 quote which relates both to organizational psychology and behavioral economics in achieving not only organizational health but adaptability, flexibility, sustainability and innovation within our organizations.
  • We conclude today’s discussion with an unfortunate truth from one of the most influential experts and theorists on leadership and management, Peter Drucker (2005). Take a moment to read this, and let the truth of it sit in (pause appropriately). This applies in two ways. First, that within each organizational member regardless of title, one cultivates a sense of responsibility for life long learning and growth. It is crucial to achieving competitive advantage both internally in the organizations we serve and externally with the multiple stakeholders involved and impacted by our work. Secondly though this analysis of our organizations clearly implies what’s missing from organizational health that all of the prior and current research indicates is required. That organizational leaders at all levels engage team members, respect their subordinates as individual human beings, reach to tie organizational and individual values towards a meaningful purpose in a safe environment, and recognize their contributions to the organization, community and society in ways which are important to them. Before one can know the individuals that collaborate and solve organizational and societal opportunities, we must first know ourselves and then behave accordingly and consistently. Only with individual health building together can organizational health be achieved.
  • Self-explanatory conversation starter to close session.
  • Organizational Health 2013

    1. 1. Building a Healthy Workplace
    2. 2. The Engaged Workforce• 77% of currentlyemployed workers wouldleave for another job ifthey could (AFLAC,2012).• 71% of currentlyemployed workers areeither not engaged orfully disengaged fromtheir jobs (Gallup, 2011).
    3. 3. Admitting Change is Needed“Diagnosis is a collaborativeprocess between organizationalmembers and the ODconsultant or leadership tocollect pertinentinformation, analyze it, anddraw conclusions for actionplanning and intervention.”Cummings & Worley (2008)
    4. 4. Gallup: The 12 Rules1. I know what is expected of me at work.2. I have the materials and equipment I need todo my work right.3. At work, I have the opportunity to do what Ido best every day.4. In the last seven days, I have receivedrecognition or praise for doing good work.5. My supervisor, or someone at work, seemsto care about me as a person.6. There is someone at work who encouragesme development.Wagner, R & Harter, J.K. (2006). 12: The elements of great managing. New York, NY. Gallup Press
    5. 5. Gallup: The 12 Rules7. At work, my opinions seem to count.8. The mission or purpose of my companymakes me feel my job is important.9. My associates or fellow employees arecommitted to doing quality work.10. I have a best friend at work.11. In the last six months, someone at workhas talked to me about my progress.12. This last year, I have had opportunities atwork to learn and grow.Wagner, R & Harter, J.K. (2006). 12: The elements of great managing. New York, NY. Gallup Press
    6. 6. Trust is Everything“Members of a trulycohesive team musttrust one another tothe point ofvulnerability,completelycomfortable beingtransparent.”ResultsAccountabilityCommitmentConflictTrustLencioni, P. (2012). The advantage: Why organizational health trumps everything. Jossey Bass. San Francisco
    7. 7. The Advantage“Organizational healthwill one day surpass allother disciplines inbusiness as the greatestopportunity forimprovement andcompetitive advantage.”Lencioni, P. (2012). The advantage: Why organizational health trumps everything. Jossey Bass. San Francisco
    8. 8. Changing Minds• Reason• Research• Resonance• Redescriptions:• Resources andRewards• Real World Events• Resistances
    9. 9. American Psychological Association• EmployeeEngagement• Balancing Work &Life• EmployeeDevelopment &Growth• Safety & Health• Recognition
    10. 10. Organizational CultureAntecedentsOrgCultureStructure&PracticesSocialProcessesCollectiveAttitudesandBehaviorOutcomes
    11. 11. What Matters Now• Values• Innovation• Adaptability• Passion• Ideology
    12. 12. Towards Organizational Health“We must abandon outmoded viewsof human nature by recognizingthat people simply are not therational maximizers of economicgain assumed by classical economictheory. Instead, employees andcustomers must be seen as peoplefirst and employees and customerssecond. That means they aresubject to all the inherentcontradictions, flaws, and emotionsthat come with being human.”
    13. 13. People & NumbersCompanies today aren’t managing their employee’scareers; knowledge workers must, effectively, betheir own CEO’s. It’s up to you to carve out yourplace, to know when to change course, and to keepyourself engaged and productive during a work lifethat may span 50 years. To do these things well,you’ll need to cultivate a deep understanding ofyourself—not only how you learn, [but] how youwork with others, what your values are, and whereyou can make the greatest contribution. Becauseonly when you operate from strengths can youachieve true excellence.Peter Drucker (2005)
    14. 14. How Does Any of This Apply?• What Will You Remember?• What Will You Share?• What Will You Do?
    15. 15. ReferencesAFLAC (March, 2012). Workforces Report. Retrieved from: _workforces_report/default.aspxAFLAC (June, 2012). Why do workers leave? Retrieved from:, S., & Bhatnagar, J. (2013). Mediator Analysis of EmployeeEngagement: Role of Perceived Organizational Support, P-OFit, Organizational Commitment and Job Satisfaction. Vikalpa: TheJournal For Decision Makers, 38(1), 27-40.Blacksmith, N., & Harter, J. K., (2011). Majority of American workers notengaged in their jobs. Washington, D.C., Gallup. Retrieved from, L.G., & Deal, T.E. (2003). Reframing organizations: Artistry, choiceand leadership. San Francisco. Jossey-Bass.Cummings, T. G., & Worley, C. G. (2008). Organization development &change. (9th ed.). Mason, OH: South-Western Publishing.Drucker, P. F. (2005). Managing Oneself. Harvard Business Review, 83(1), 100-109.
    16. 16. ReferencesFleming, J. H. & Harter, J.K. (February 13, 2013). The next discipline:Applying behavioral economics to drive growth and profitability.Washington, D.C. Gallup.Gardner, Howard (2006). Changing Minds: The Art and Science of ChangingOur Own and Other People’s Minds. Boston, MA. Harvard BusinessPublishingGrote, D. (September, 2008). Passing judgment: Why we still can’tperformance appraisals right. The Conference Board Review. New York.Hamel, G. (2012). What matters now: How to win in a world of relentlesschange. San Francisco. Jossey-Bass.Lencioni, P. (2012). The advantage: Why organizational health trumpseverything. San Francisco. Jossey BassLewicki, R. J., McAllister, D. J., & Bies, R. J. (1998). Trust and distrust: Newrelationships and realities. Academy of Management Review, 23, 438–458.Mayer, R. C., Davis, J. H., & Schoorman, D. F. (1995). An integration model oforganizational trust. Academy of Management Review, 20, 709–735.Patterson, K., Grenny, J., McMillan, R. & Switzler, A. (2002). New York.McGraw Hill.
    17. 17. ReferencesSenge, P., Kleiner, A., Roberts, C., Ross, R. Roth, G, & Smith, B. (1999). Thedance of change: The challenges to sustaining momentum in learningorganizations. New York. Doubleday.Wagner, R & Harter, J.K. (2006). 12: The elements of great managing. NewYork. Gallup PressZhang, A., Tsui, A. S., Song, L., Li, C., & Jia, L. (2008). How do I trust thee?The employee-organization relationship, supervisory support, and middlemanager trust in the organization. Human Resource Management, 47(1),111-132.