Keeping a pulse on your organization’s health is vital, yet knowing how to measure organizational culture can be challenging. A variety of metrics should be considered to determine the holistic health of the culture and identify opportunities for improvement. It’s possible for a company to do well in one area (e.g., diversity and inclusion) while underperforming in another (e.g., employee well-being), which is why taking a comprehensive view is so important.
The good news? Organizations often already have internal data available that can provide insights about its culture. Here is how to measure organizational culture using four important data points. Together, these measures can tell you a lot about the current state of your culture.
1. Productivity metrics
Operations and finance departments are typically responsible for tracking productivity, output and overtime metrics. Partner with these internal departments to understand how they track productivity. Together, set benchmarks and regularly evaluate the metrics. Successful organizations should review these metrics monthly during a recurring meeting (e.g., executive leadership team meeting).
Productivity and output can be indicators of employee engagement. Strong productivity can be a sign of energized, focused and engaged employees. Conversely, high overtime or lack of PTO usage tells a different story. These employees may be overworked, stressed out, burned out, and disengaged or even hostile. Overall, productivity metrics can be an indicator of how healthy organizational culture is.
Regularly evaluating these data points will help you spot downward trends before the effect becomes damaging to your organization. They also help you make the case to executive leadership on why it’s essential to invest in a strong organizational culture that prioritizes employee well-being.
When companies nurture employee well-being, employees are more productive (which correlates positively to profitability). When organizations don’t nurture employee well-being, it can lead to low performance, burn-out and trouble with high employee turnover.
2. PTO and sick time utilization
PTO and sick time utilization are additional indicators of the health of a culture. Significant sick time and absenteeism can be a sign that employees are burnt out. Burn-out has become such a significant workplace problem that the World Health Organization (WHO) officially recognized burn-out as a mental health syndrome “resulting from chronic workplace stress that has not been successfully managed.”
Since the WHO designation in 2019, burn-out has increased drastically among employed U.S. adults. This is often a result of stress related to the pandemic, political divisions and social justice issues. Burn-out can lead to hostility or cynicism at work and reduced professional performance. A strong workplace culture can help address and solve this challenge.
Employee PTO usage can indicate whether employees feel supported to take time off from their jobs. Low PTO usage could signal a workload problem or cultural pressure (real or perceived) not to take time off from work. Creating an organizational culture that encourages employees to speak up when they have too much on their plate, and empowers employees to take time off is foundational to a strong, engaged team for the long-term. Some organizations have begun requiring employees to take a minimum amount of paid time off each year because they understand it increases engagement and creativity while also alleviating burn-out.
Companies should also be mindful of cultural expectations when people are on vacation. Employees who take PTO but then are expected to answer emails, join calls or be “on call” for clients while they are out don’t come back feeling recharged and engaged. Create clear expectations for what being out of the office means, and then respect employees’ time off.
3. Retention and recruitment metrics
Another way companies can measure their organizational culture health is by looking at how long employees stay with the company and the amount of time it takes to fill open roles. Compare retention and recruitment metrics to industry targets, like the ideal average employee tenure or the targeted number of days it takes from job posting to a new hire’s first day on the job.
Average tenure decreases, turnover increases or missing your hiring targets can be signs that the company’s organizational culture needs attention. If it’s taking a long time to fill roles, this could be a sign that the company doesn’t have a compelling organizational culture or its brand reputation is suffering.
Look at retention and recruitment metrics at least twice a year or every quarter. Regularly evaluating these metrics will help you identify trends, spot issues and create initiatives to counteract problems and improve organizational culture.
4. Reputation in the marketplace
Keeping tabs on what employees say online about your company is a powerful gauge of organizational culture. Annually, organizations should evaluate what people say externally about the organization as a place to work. This evaluation includes looking at employer review sites like Glassdoor and Indeed. It means being mindful of the company’s success rate for winning awards and being named to top places to work rankings.
Not only does reputation in the marketplace matter for recruitment efforts, it can also inform strategic organizational culture priorities.
Use insights to improve culture
Consider multiple data points to measure your organization’s culture effectively. Ideally, organizations should consistently seek employee input through feedback surveys (e.g., eNPS, pulse surveys, employee engagement surveys). There is also an abundance of data already available to give you a good sense for the health of your organization’s culture.
As your organization becomes familiar with these data points, you will learn to read the numbers more effectively. For example, if you have low productivity but high sick time, it could be a sign your company isn’t equipping employees with the information and tools they need to complete their jobs efficiently. The better you learn to read the numbers, the more effective you will be at measuring organizational culture and responding to its trends.