HR professionals tend to focus on metrics like turnover or "undesirable attrition" to determine whether an organization's culture is healthy. More forward-thinking organizations have even implemented employee engagement surveys and other tools that help them take the pulse of the company and identify potential problems.
For managers, though, the data from these efforts often come too late. By the time things are bad enough that they start showing up in turnover data or even survey results, serious problems often have taken root. Trying to use retention metrics to assess your team's health is the equivalent of a doctor using an autopsy to diagnose an illness. Yes, the information might be accurate, but it's not particularly helpful if a permanent result has already occurred.
Measure morale with "soft" metrics.
To get around this, managers can use metrics that are not quite as clearly quantifiable, but useful nonetheless. You can think of these as "morale metrics" that indicate the general tendency of your team at the current time. The absolute "numbers" on these indicators are not that important. What matters for your purposes is the trend - are they increasing or decreasing, and is that what you want them to be doing?
When there are pre- or post-meetings with a subset of the team, are they about issues or about people?
When you have a team meeting, is that really the meeting, or are there pre-meetings to strategize and/or post-meetings to discuss what happened? Sometimes it makes sense to have a preparatory meeting, and a follow-up meeting with only the subset of the team involved can likewise be more efficient. What this indicator is really about are the pre- and post- meetings that are just about the politics, not the substance. If two members of the team immediately leave a meeting and go to one of their offices and shut the door, that is probably not a positive sign.
Do plans and decisions change from how they started out at the beginning of the meeting?
This is an indicator both of the effectiveness of your meetings as well as the health of your team culture. If the outcomes of a meeting are substantively different from what was introduced at the beginning of the meeting, that can be a sign that your team is doing what teams do best: bringing everyone's perspective, experience, and skills to ensure that the most informed decisions and plans are made. It also means that your team meetings actually matter. If nothing changes, then why not just send out an e-mail with the information and save everyone's time?
Is there frequent disagreement about issues (and not about people)?
Everyone agreeing in a meeting is a bad sign. Either you have succumbed to groupthink, or there is not enough trust and commitment for people to speak up. Jack Welch famously told his executive team any time they all agreed that clearly something was being missed and they needed to go back to the drawing board. At the same time, it's important that the discussion and debate focus on the issues and not the people involved. If there is interpersonal sniping, even about people outside the team, that is a sign of a broken relationship that needs to be addressed.
What is the subject of sarcasm - issues or people?
Sarcasm is a way to get away with saying something without truly owning what you're saying. It is therefore a warning sign that someone doesn't feel completely safe to share their real feelings on something.
An exception to this might be when a team has inside jokes about situational factors and are sarcastic about them as a means of bonding: "Unforeseen obstacles coming up? No, that never happens around here!" The sense of camaraderie and "we're all in this together and we all understand the situation" can be a positive thing.
The minute the sarcasm is directed at people, though, is the time when you need to do something. Regardless of whether it's about a client, another department, or (worst of all) someone on the team, you need to figure out what's really underneath the comments and address it directly. Sarcasm can become poisonous very quickly due to its saying-without-really-saying indirectness.
How much laughter do you hear in meetings and in informal interactions?
Genuine laughter requires a certain level of relaxation and safety, so its frequency can be a positive indicator of both how your individual employees are currently feeling and how they relating to each other. Even when (or perhaps especially when) deadlines and pressure are looming, humor can be a way to connect with and support each other. Inside jokes can also be a way for the team to bond, creating almost a secret code of sorts that distinguishes those on the team from those outside the team. As with sarcasm, it's important to make sure that the humor is directed at issues and situations rather than people.
How much interaction does each team member have with each of the other team members, both formally and informally?
To a certain extent, factions on a larger team are inevitable due to the work of some team members being more interrelated than that of others. However, the more the individuals interact with each other, the healthier the team is likely to be. Informal interactions, such as going to lunch together, can help foster trust and identify potential connections that might not be obvious.
One team I was on addressed this by having each person interview another member of the team prior to a retreat, and then "introduce" the team member to the group at the beginning of the retreat. The goal was to try to find out things that other people might not know about the person, and it created some great conversations that lasted far beyond the retreat. Zappos implemented a system where, upon starting their computer, employees have to answer questions about another employee before they can get into their main system. (This seems like a great security system, too - perhaps a little too good!)
How often do employees ask each other for input or assistance?
One of the phrases you tend to overhear on well-established, high-performing teams is "Can I get you to take a look at this? I need a fresh [perspective/set of eyes/whatever]." Teams that don't trust each other tend to just muddle through individually, either because they don't believe their colleagues are qualified to help or because they don't feel comfortable asking. You of course want your employees to feel comfortable coming to you when they're stuck - that's why you're there! - but it's not possible for you to always be available, and sometimes a peer has just the right perspective on things.
There are ways to implement this formally, with something like a peer-review process for major deliverables, but you can also encourage it informally by asking questions like, "Jane might have good ideas on this - did you ask her?" Another way to encourage this is to reinforce any employees who help another member of the team out, especially when it's outside of their usual area of responsibility. Calling out the behavior in team meetings and encouraging employees to mention any time one of their colleagues helps them will set this as a standard of behavior for the whole team.
It's important to make sure you don't penalize people for collaborating, too. I've seen organizations that tout collaboration as a key value, but if anyone misses their own deadline because they pitched in to help another employee, there are serious consequences. The message employees get is that all that collaboration talk is just window-dressing - it's really every person for themselves.
Monitor your team's health and intervene early.
These are just a few "soft" measures you can keep an eye on to assess the health of your team - there are many others as well, and some might be particularly relevant to your situation. Identify two or three that you want to track, and start keeping notes. You might be surprised at how easy it is to intervene before even the people involved are really that aware that there's a problem. Hopefully, your tracking and efforts with these "morale metrics" will show up in more quantifiable ways, including retention, results, and maybe even revenue (for the organization and for you and your team)!