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OKR and organizational climate: understand this relationship

Renan Araújo

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Do you know the relationship between organizational climate and the use of OKR methodology? First, let’s have a brief definition of both. While Organizational Climate is the perception of employees about the company’s processes, policies, and practices, the OKR methodology is a system of collective and individual goals that converge in the pursuit of the overall goals of an organization. 

At first, understanding how these concepts converge may seem a bit complicated. However, we have prepared this material for you to clear up your doubts! Read on and learn more!

Check out some more context 

Before we answer the main question, let’s bring a little more context. 

According to Gallup’s 2018 survey, 53% of male and female team members would rate themselves as “not engaged” at work, meaning they may be satisfied, but not connected. While these employees may still perform their jobs, they are probably not performing to the best of their ability and are certainly not making a significant contribution to and for the culture of your organization.

In the same survey, Gallup estimated that dismissed team members cost American companies around $450 to $550 billion a year. These numbers are frightening and have been the subject of much discussion, as well as the source of many investigations into possible solutions to this corporate “pandemic” that threatens organizations worldwide.

The impact of uncommitted employees is a significant financial problem that many organizations are struggling with and trying to solve through high investments. 

But the question is: 

Are you making the right investments to help increase your team’s engagement and retention? 

While many companies have evolved rankings such as “Great place to work” by investing in structure, ping pong tables, video games or launching new monetary recognition programs it is proven that these efforts can move the needle in a positive way, but cannot sustain engagement over time. 

So how about thinking of more permanent solutions?

OKR methodology and organizational climate: understand how they converge

In the following we explain how OKRs and organizational climate are closely linked. 

Connection with the company’s strategy

One of the biggest causes of teams’ lack of interest is the low connection they feel with the company’s strategy. Research has found that 84% of “front-line” female team members do not understand their connections to corporate priorities. And why is it a problem? If they can’t see where they are going, how will they bother to get there?

Transparency using OKRs

The transparency that the use of OKRs generates throughout the organization allows teams to align their efforts with the larger goals, recognizing their value and contribution to the company. Inspiring and effective goals lead to less turnover and a better climate. Who has never heard the expression: “Here I feel I am part of something bigger”? On the other hand, working in a business that has no clarity about where it is going can be rather discouraging.

Role of Leadership 

The OKRs not only help to understand the direction of the company, but also help leaders to better lead their teams, bringing focus, prioritization, and helping to raise possible course adjustments. Which employee would like to have his or her focuses reviewed only annually?

To do this, OKRs must be easily measurable. In this way, leaders can track the progress of action plans and make adjustments almost in real time.

Monitoring the satisfaction of personnel in your company

Finally, a curiosity: Many people ask me if the overall satisfaction of employees is a good metric to track via OKRs. Let’s go!

Many companies use eNPS (Employee Net Promoter Score). Originally, NPS is a methodology used as a customer experience evaluation metric. From the question “On a scale of 0 to 10, how much would you recommend our company to a friend?” the level of customer satisfaction and loyalty is verified.

The employee net promoter score brings this question internally to the company. Thus, it is possible to measure employee loyalty and satisfaction with the company. 

The eNPs is a simple measure that can help your company in attracting talent and building your employer brand positively. However, we have to be careful about some results that it may end up hiding on specific topics that are important for team retention – so our suggestion is to always have pulse surveys that help you create good action plans.

In short, you can put climate evolution as a goal yes, but the difference will be in the execution, the how to ask, and the effectiveness of the plans you will implement and communicate over the months. 

And what about your company? How are you giving direction to your employees? And how are you assessing whether they are really engaged?

If you want to learn more, please contact our team, talk to our professionals and ask your questions!