The Boardroom Series: Measuring Wellbeing: Why, How and So What?

“What gets measured gets managed” is one of the most familiar business aphorisms, and may be true.  But it doesn’t mean things get managed well.

Our experience indicates that, although more organisations are starting to measure wellbeing, it remains a subject in its infancy.  In this article, we set out how organisations can improve wellbeing by improving how they measure wellbeing.

What to measure, and why?

Our guiding principles are to be clear on the business objective you are trying to achieve through improved wellbeing and to focus on addressing the things you can control.

This may seem obvious, but we have seen measurement programmes kicked off where different people in the organisation think different things are being measured, and with no real sense of why wellbeing should be measured or what to do with the information. Unsurprisingly, this tends to result in scattergun actions following staff surveys but doesn’t add greatly to management insight or to improved wellbeing.

Our experience is that wellbeing is measured and managed best in organisations that understand the link between wellbeing and organisational performance. Hence, whilst altruistic motives may be in play, the business case for measuring and managing wellbeing is also clearly understood.  As a result, measurement is more focused and positive actions are more likely to be taken.

There is merit in understanding the wellbeing of your workforce in its fullest sense, including physical, financial and social factors.  Each of these will affect performance.  However, we prefer to place more focus on psychological wellbeing.  This is where organisations can pull more levers to improve wellbeing, and where we can evidence the link between factors that improve wellbeing and improved business performance.

For example, recent McKinsey research shows that 11 manager behaviours that can be directly linked to components of psychological wellbeing are also key drivers of shareholder returns (“Investing in middle managers pays off—literally”, McKinsey, June 2023).

Before looking for things to measure, we spend time with our clients considering issues such as:

  1. The organisation’s key business drivers, objectives and plans, especially as they relate to its people.
  2. Any areas of immediate concern.
  3. Wellbeing objectives, strategy and plans.

Time spent at the outset building consensus on what you want to measure and why is seldom.  It provides clarity and improves the likelihood of measurement leading to meaningful action and improvement.

Three perspectives to consider

Within an organisation’s wellbeing measurement framework, we try to include three different perspectives on progress and performance: predictive indicators, outcome indicators and process indicators.

  1. Predictive indicators: There are factors that we know will affect psychological wellbeing and performance which should be the primary focus for management. By understanding these factors, risks or gaps can be identified and addressed before they become detrimental to performance. Example predictive indicators include:
  • Work demands and support
  • Levels of autonomy
  • Working relationships
  • Opportunities to develop
  • Recognition
  • Communication

There are 10-12 key questions we can typically deploy through staff surveys, supported by interviews and focus groups, that will provide a robust predictor of the state of wellbeing and are directly linked to individual and organisational performance.

  1. Outcome Indicators: These measure the actual state of wellbeing and mental health of the workforce. Examples include:
  • Sickness absence due to mental health
  • Occupational Health referrals for mental health
  • Attrition
  • Errors and productivity

Additional insight can also be gained from staff feedback such as Net Employee Score and from client feedback such as Net Promoter Score.

  1. Process Indicators: The final component to consider is progress with the actions you are taking to promote positive wellbeing and mitigate poor mental health. Example indicators include:
  • Attendance at training
  • Feedback on training and other initiatives
  • Uptake of Employee Assistance programmes
  • Awareness of HR policy updates

Designing a Wellbeing Measurement programme

For an ongoing assessment of wellbeing and mental health, we typically recommend an approach that includes a mixture of the following:

  1. A small number of key questions in the company’s annual staff survey.
  2. An annual or twice-yearly Wellbeing and Mental Health Survey comprising 10-14 questions.
  3. Quarterly pulse surveys.
  4. Interviews with senior management.
  5. Focus groups with a representative group of staff.

Every organisation is different, and the above can always be tailored to suit the size, nature and business cycles of the organisation.  But a mixture of quantitative and qualitative assessments, and including verbatim comments, provides the best insight to help management make informed decisions.

Not to be overlooked are two additional critical success factors for the measurement programme:

  1. Securing the commitment of leaders and staff to wellbeing, and their participation in activities to measure it.
  2. Establishing a baseline assessment from which you can track progress and improvement over time and identify the levers that have the greatest impact.

So what?

All of this is moot unless something happens as a result – measuring wellbeing is of little benefit unless action is taken.

This begins by making sure that there is a full and honest analysis and debrief of the findings from the measurement programme, and an allocation of actions and responsibilities to make improvements.  This is likely to involve all parts of the organisation and should not all fall to HR or the Wellbeing Lead.  Improving people’s lives and organisational performance requires senior leadership ownership.

Once agreed, the results of any staff surveys and actions to be taken need to be communicated to staff. This serves as evidence that management is listening and helps the wider organisation understand reasons that changes or initiatives are or are not being implemented.

Finally, actions agreed upon should be tracked to ensure they take place, and the impact of the action should be monitored to see if it had the desired effect. Drawing on this insight, interventions should be continued, adapted, or stopped to support better return on investment.

Your takeaway

It can be tempting to find things to measure before understanding why we want to measure them.  But if you want to manage wellbeing effectively, and to use it as a vehicle to improve individual and organisational performance, it’s important to step back and plan your approach.

Even if your wellbeing strategy is in its infancy or your organisation is small, establishing a clear vision and working with some metrics will support the success of your efforts.

From understanding why wellbeing matters to you, to determined action to improve wellbeing, what gets measured well gets managed well.

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