You may have heard of ‘climate’ and ‘culture’ within an organization, and some may use these terms interchangeably. However, there is a difference between the two and failing to understand this could incur greater financial losses for your organization!
Culture is a system of shared assumptions, values, and beliefs that govern how people behave in an organization. Culture is difficult to change, is embedded in employee behavior, and reflects the organization’s ‘personality.’
Climate is how members of an organization experience the culture — essentially the ‘mood.’ Climate affects employees’ engagement, motivation, physical and mental health, and is easier to adjust.
As a key driver in multiple areas, improving climate can enable better performance, closer alignment with tactical objectives, and healthier corporate financial results.
The importance of measuring Key Performance Indicators:
Measuring progress is commonplace within any organization.
Countless Key Performance Indicators (KPIs) can be measured, typically based around key business drivers: sales and financial performance, complaints, benchmarking against similar companies etc. However, the growing view that people are one of the most important key drivers of business performance suggests measures in this area will play a greater role in how organizations monitor progress.
Developing deeper measurement of human capital has increasingly become as important as financial and manufactured capital. To date, measurement in this area has been in the form of: workforce cost; staff turnover; training and development investment; talent retention; and employee engagement.
The pressure on leaders today is great. There are complex external factors effecting business: economic uncertainty, technological advancements and changing employee expectations, to name a few. In an era of financial fragility there has never been a more important time to correctly analyze and evaluate an organization’s people.
Insight into measuring human capital:
Focusing training and development – Measuring human capital allows clear and targeted direction as to where investments are needed regarding people and processes to gain maximum value and improve performance.
Improved leader and management capability –
There is a clear relationship between the way in which we lead people and their capacity for success, well-managed organizations perform stronger. Investing in strengthening manager performance can have as much impact as investing in workforce numbers or technology.
Improve employee wellbeing –
By assessing motivation, engagement and wellbeing you can start to address the real issues effecting work-place climate and ability to operate effectively.
Improve the quality of decision-making –
Applying synchronized and data-focused approaches to decision-making reveals what is and isn’t working. It takes away subjectivity, providing effective analysis to support decisions.
Benchmark and compare functions and teams –
Tracking performance is essential. How teams are performing now, compared to last year, has value. Measurement in the right areas also allows organizations to compare different parts of the business to understand the areas of need and direct improvement.
How will measuring and proactively managing climate help you better understand your people?
Competent organizations accept the impact that people have on performance. It’s important to understand the strengths and weaknesses of a workforce and where your business can improve.
It’s common knowledge that staff satisfaction and engagement surveys only get responses to the questions that are asked and segmenting the data to enable it to be used effectively is a common issue. An organization often focuses on survey improvement, rather than addressing the issues within the responses, traction is lost and little or no changes are seen!
Comprehensive measures of corporate information analyzed from different perspectives will give your organization the opportunity to fully understand your climate. You’ll have a strong, provable measurement of your current climate, relationships formed between teams and their leaders, individual or team levels of attainment performance, and factors impacting this.
Measuring climate allows you to monitor and measure KPIs surrounding human capital, help your organization to discover crucial insights affecting your team’s performance, and, most important, recommend improved frameworks to drive ROI.
Leading by example:
Having worked with the CEO, leaders, and both the onshore and offshore teams of an oil and gas company, proactively changing the corporate climate assisted this organization with their change management. The target was to reduce a third of the workforce and save $250 million worth of cost.
The transformation took place on time, while also maintaining consistent production levels. Improvement was made on every measure of health and safety, including time lost due to incidents. Overall, the organizations climate score improved by 11.2%.
Using meaningful quantitative data as shown in this example will allow you to make enormous and lasting improvements within an organization.
Creating the right climate is the beginning not the end!
Contact firstname.lastname@example.org for more information, case studies, theories that underpin climate measurement and available measurement tools. Visit our website at www.optimalmeasures.com