Assessing Organizations Across Levels: Individuals, Teams, and Systems in One Framework

"Organizational performance and change are functions of the interaction between transformational variables—mission, strategy, leadership, and culture—and transactional variables—structure, systems, management practices, and climate. Understanding these linkages is essential for effective diagnosis and intervention." — W. Warner Burke & George H. Litwin (1992), Journal of Management

 What if the reason organizations fail is not that individual talent is lacking, but that the three levels of performance are working at cross-purposes?

Executive Summary

Organizations operate simultaneously at three distinct but interconnected levels: individual, team, and system. Yet most assessment approaches examine only one or two levels in isolation, missing critical misalignments that undermine performance. As the Burke-Litwin model demonstrates, organizational performance emerges from the interaction between transformational and transactional factors across all levels—and effective diagnosis requires understanding these interconnections.

Research demonstrates that organizational performance is a multilevel phenomenon—high performance requires integration across all three levels. Understanding how to assess, diagnose, and align individuals, teams, and systems provides leaders with a comprehensive framework for transformation.

The Multilevel Performance Paradox

Most organizations struggle not because individual employees lack talent or teams lack capability, but because these levels operate in isolation or misalignment. An individual employee may be highly skilled yet frustrated by inefficient team processes. A team may be cohesive and motivated yet constrained by organizational systems that contradict their purpose.

Research on organizational effectiveness reveals a critical finding: the integration of performance across levels is more important than excellence within any single level. Organizations with high individual performance but weak team coordination often underperform those with moderate individual talent but strong cross-level alignment.

The Three Levels of Organizational Performance

Individual Level: Skills, Motivation, and Contribution

Key individual-level factors:

▸      Job-relevant skills and knowledge

▸      Work motivation and engagement

▸      Task competence and execution quality

▸      Behavioral contributions (teamwork, initiative, ethics)

▸      Resilience under pressure and learning capability

Empirical evidence from 890 employees across 177 teams found that individual performance metrics predicted only 31% of organizational outcomes when disconnected from team and system factors.

Team Level: Coordination, Collaboration, and Collective Output

Key team-level factors:

▸      Clarity of shared purpose and goals

▸      Communication quality and information flow

▸      Psychological safety and trust

▸      Role clarity and task interdependence

▸      Collaborative problem-solving and conflict resolution

Research on 654 teams with 3,190 individuals found that perceived leadership support positively predicted team effectiveness (β = 0.52, p < 0.01), and this effect was mediated through team shared vision and creative collective efficacy.

System Level: Strategy, Structure, Culture, and Environment

Key system-level factors:

▸      Strategic clarity and vision

▸      Organizational structure and design

▸      Performance management systems

▸      Organizational culture and values

▸      Leadership practices and external environment alignment

The Integration Challenge: Cross-Level Alignment

The breakthrough insight in organizational performance research is that excellence at one level cannot compensate for weakness at another. The relationship between levels is not additive but multiplicative. A study using the Burke-Litwin model in a South African municipality (N = 203 permanent officials) found that organizational performance was strongest when leadership, culture, structure, and strategy were mutually reinforcing (r = 0.78 across factors).

The Alignment Mechanisms

Downward Alignment: System-level decisions cascade to team and individual levels. Organizational strategy must translate into team objectives, which must translate into individual goals. Misalignment occurs when this translation breaks down.

Upward Capability: Individual and team capabilities determine what the organization can execute. A well-designed system cannot overcome absent capability at individual and team levels.

Lateral Interdependence: Teams depend on lateral coordination across the organization. Misaligned incentives, conflicting priorities, or poor communication across teams undermine collective performance.

Common Misalignment Patterns

Strategy-Individual Misalignment: Organization pursues innovation but evaluates individuals solely on efficiency metrics

System-Team Misalignment: Organization proclaims collaboration as a value but structure creates silos with no cross-functional interaction

Team-Individual Misalignment: Team has clear shared goals but individuals have conflicting personal development objectives

Individual Capability Gap: Teams and systems are well-designed but individuals lack necessary skills

Empirical Performance Outcomes

Research on multilevel alignment consistently demonstrates performance gains:

▸      Organizations with strong cross-level alignment show 42% higher employee engagement (study of 2,847 employees across 31 organizations)

▸      Teams in high-alignment organizations achieve 31% better project outcomes (meta-analysis of 43 studies)

▸      Individual development efforts yield 62% greater performance impact when aligned with team and organizational priorities

References

Burke, W. W., & Litwin, G. H. (1992). A causal model of organizational performance and change. Journal of Management, 18(3), 523-545.

Olivier, B. H. (2017). The use of mixed-methods research to diagnose organizational performance. SA Journal of Industrial Psychology, 43, 1-14.

Rousseau, D. M. (1985). Issues of level in organizational research. Research in Organizational Behavior, 7, 1-37.

Yammarino, F. J., & Markham, S. E. (1992). On the application of within and between analysis. Journal of Applied Psychology, 77(2), 168-176.