What do you understand by the term organizational climate?
Business practitioners and scholars of human behavior in organizations have conducted different studies on organizational climate. In a research written by Zhang and Liu, the authors have expressly stated that previous studies on organizational climate could actually be traced to as early as the 1930s. There has been varied definitions of the term, and one’s research has generated the following meanings:
- “Organizational climate is an inherently multilevel construct involving distinct perceptions and beliefs about an organization’s physical and social environment” ;
- “refers to the degree to which an organization focuses on and emphasizes: Innovation, Flexibility, Appreciation and recognition, Concern for employee well-being, Learning and development, Citizenship and ethics, Quality performance, Involvement and empowerment, (and) Leadership” ;
- “organizational climate reflects beliefs about the organization’s environment that are shared among members and to which members attach psychological meaning to help them make sense of their environment (James & James; James & Jones; Schneider; Schneider & Reichers)” .
phenomenon or condition that incorporates components such as perceptions, beliefs, philosophies and values system that is inherent within the organization and shared among its members.
The interests of business practitioners, as well as social psychologists on the subject of organizational climate stems for its apparent effect and impact on organizational performance. As revealed in various researches, there were reported direct links between organizational success with those organizations that exhibit positive organizational climate – or those which promote and encourage empowerment, personnel training and development, enhancement of leadership skills, focus on quality improvement, and emphasis on customer service and satisfaction, among others.
Likewise, the article written by Forehand and Glimer was reported to have presented three important features of organizational climate as follows: (1) “it varies among different organizations; (2) it is persistent; and (3) it can affect the behavior of organization members” (Forehand and Glimer; cited in Zhang and Liu 189). Thus, since it appears to be unique for each organization, this important characteristics make organizational climate difficult to assess and determine. In addition, the very essence of variety between organizational experiences potentially make its impact on organizational performance and success equally different and complex.
In various studies, it was also reported that organizational climate could be developed, improved and enhanced through following prescribed techniques. Hellriegel and Slocum have been cited to have proposed ways for enhancing a positive and healthy organizational climate through communication, values, expectations, norms, policies and rules, programs, as well as leadership .
What effect does this climate have on organizational performance?
There have been evident findings which support a positive and direct relationship between healthy organizational climate and productive performance. According to Zhang and Liu, “the length of time working for the current enterprise, leadership and performance climates had significant effects on job satisfaction: individuals who have been staying in enterprises longer had more positive perception for leadership and performance climates, and the same was with job satisfaction” (194). Likewise, these authors also revealed that good organizational climate is also instrumental and contributory to organizational effectiveness: “the more positive the perception of organizational climate by individuals was, the stronger their perception of collective identity and organization commitment was, and the better organization effectiveness was” .
In another study written by Putter, the author likewise sought to determine the impact of organizational climate to organizational performance. It was revealed that management support plays a very significant part in harnessing the most effective climate that should generate the level of performance aimed by the organization. The following figure (Figure 1) clearly represents Putter’s assertion that organizational climate is directly influenced by management support and indirectly impacted by organizational unit size. Likewise, it also shows that organizational climate directly contributes to financial performance, employee engagement, as well as operational performance. His findings actually revealed that “total organizational climate perception is positively related to several company performance indicators: profitability, sustainability & growth, productivity, EBIT margin and employee engagement” .
Figure 1: Theoretical Framework
Source:
The conclusive findings revealed that organizational climate, which apparently focuses on components that look into the professional growth and development of the personnel, significantly influences organizational performance through the satisfaction and high morale exhibited by personnel. When management has designed appropriate policies and procedures that look into incentives, empowerment, application of appropriate leadership style and approaches, as well as insituting a system of training and development, employees feel appreciated and they are encouraged to achieve the tasks required with greater satisfaction and high productivity. As emphasized, “the more positive the perception of organizational climate by individuals was, the higher their job satisfaction and efficacy were, while the lower turnover intention and job stress were” . As such, the authors have identified the effect of organizational climate to be more pronounced in the area of human resources management. From their study using 419 participants who were noted to be enterprise managers, as well as personnel who all have been enrolled in MBA courses, as well as advanced business administration training classes, there were consistency in results which validated the impact of organizational climate in important performance effectiveness of human resources management, such as: job performance, job satisfaction, turnover rate, efficacy and job stress . Their major finding and conclusion was disclosed herewith: “performance, salary and development climates had significant predicting effects on the turnover intention of individuals; the length of time working for the current enterprise, and leadership and performance climates had significant effects on job satisfaction; position, and leadership and development climates had significant predicting effects on the efficacy of individuals; enterprise characteristics and communication climate had significant predicting effects on job stress” .
Overall, in any organization, the performance is measured by the way personnel undertake the compliance to their respective roles and responsibilities at their optimized level: meaning, with maximum benefits for least costs. The study conducted by Zhang and Liu has effectively confirmed that by harnessing a positive and healthy organizational climate, personnel are more satisfied with their jobs which ultimately result in lower turnover, lesser stress, and greater productivity and performance. Their findings were actually supported by other studies which were appropriately mentioned in the article entitled “What is Organizational Climate and Why Should You Warm Up to it?”, as cited below:
- “Denison (1990) found that an organizational climate that encourages employee involvement and empowerment in decision-making predicts the financial success of the organization.
- Schneider (1996) found that service and performance climates predict customer satisfaction.
- Ekvall (1996) found a positive relationship between climates emphasizing creativity and innovation and their profits.
- Hansen and Wernerfelt (1989) found that organizational climate factors explain about twice as much variance in profit rates as economic factors.
- Thompson (1996) found that companies utilizing progressive human resource practices impacting climate such as customer commitment, communication, empowerment, innovation, rewards and recognition, community involvement/environmental responsibility, and teamwork outperformed organizations with less progressive practices” .
All of the findings support that organizational climate has direct impact to organizational performance. Knowing this, management should therefore follow the strategies proposed by these various authors to develop a healthy organizational climate through the areas proposed by Hellriegel and Slocum; as well as the adivse of Zhang and Liu: “managers should pay attention to investigate and understand the perception of staff members for organizational climate and reduce or eliminate their negative perception by a large quantity of communication and expert guidance in order to attenuate its negative effects on human resource management and organization effectiveness” (196). The participation and involvement of management support has been validated by Putter. Therefore, for organizational climate to provide a truly positve impact on organizatinal performance, management commitment and dedication towards employee growth and development should be their primary focus.
Works Cited
Dickson, Marcus W., Christian J. Resick and Paul J. Hanges. "When Organizational Climate Is Unambiguous, It Is Also Strong." Journal of Applied Psychology (2006): 251-364. Print.
Forehand, G.A. and B.H. Glimer. "Environmental variation in studies of organizational behavior." Psychological Bulletin (1964): 127-143. Print.
Hellriegel, D. and J.W. Slocum. Organizational Behavior. Cengage Learning Inc., 2010.
James, L. A. and L. R. James. "Integrating work environment perspectives: Explorations into the measurement of meaning." Journal of Applied Psychology (1989): 739 –751. Print.
James, L. R. and A. P Jones. "Organizational climate: A review of theory and research." Psychological Bulletin (1974): 1096 –1112. Print.
Putter, L. "Organizational Climate and Performance." Master's Thesis. 2010. Print.
Schneider, B. and A. Reichers. "On the etiology of climates." Pesonnel Psychology (1983): 19 –39. Print.
Schneider, B. "Organizational climates: An essay." Personnel Psychology (1975): 447– 479. Print.
"What is Organizational Climate and Why Should You Warm Up to it?" 2009. Where Great Workplaces Start. http://greatworkplace.wordpress.com/2009/09/01/what-is-organizational-climate-and-why-should-you-warm-up-to-it/. 20 May 2013.
Zhang, Jianwei and Yuxin Liu. "Organizational Climate and its Effects on Organizational Variables: An Empirical Study." International Journal of Psychological Studies (2010): 189-201. Print.
