Organizational Climate

Climate of an organization is somewhat like the personality of a person. Just as every individual has a personality that makes him unique and different from other persons. Each organization has an organizational climate that clearly distinguishes it from other organizations.

Organizational climate reflects a person’s perception of the organization to which he belongs. It is a set of unique characteristics and features that are perceived by the employees about their organizations which serves as a major force in influencing their behavior. Thus, the organisational climate in a broad sense can be understood as the social setting of the organization.

“Climate in natural sense is referred to as the average course or condition of the weather at a place over years as exhibited by temperature, wind, velocity, and precipitation.”

Characteristics of Organisational Climate:

The nature of organizational climate will be clear from the following characteristics:

1. General Perception:

Organizational climate is a general expression of what the organization is. It is the summary perception that people have about the organization. It conveys the impressions people have of the organizational internal environment within which they work.

2. Abstract and Intangible Concept:

Organizational climate is a qualitative concept. It is very difficult to explain the components of organizational climate in quantitative or measurable units.

3. Unique and Distinct Identity:

Organizational climate gives a distinct identity to the organization. It explains how one organization is different from other organizations.

4. Enduring Quality:

Organizational climate built up over some time. It represents a relatively enduring quality of the internal environment that is experienced by the organizational members.

5. Multi-Dimensional Concept:

Organizational climate is a multidimensional concept. The various dimensions of the organizational climate are individual autonomy, authority structure, leadership style, the pattern of communication, degree of conflicts and cooperation, etc.

Factors Influencing Organisational Climate:

Organizational climate is a manifestation of the attitudes of organizational members towards the organization. Researchers have used the data relating to individual perception of organizational properties in identifying organizational climate. Even in this context, there is a great amount of diversity.

Litwin and Stringer have included six factors that affect organizational climate. These factors are:

(i) Organizational Structure: Perceptions of the extent of organizational constraints, rules, regulations, red tape,

(ii) Individual Responsibility: Feeling of autonomy of being one’s boss,

(iii) Rewards: Feelings related to being confident of adequate and appropriate rewards,

(iv) Risk and Risk Taking: Perceptions of the degree of challenge and risk in the work situation,

(v) Warmth and Support: Feeling of general good fellowship and helpfulness prevailing in the work setting.

(vi) Tolerance and Conflict: Degree of confidence that the climate can tolerate, differing opinions.

Schneider AND Barlett give a broader and systematic study of climate dimensions.

They include the following factors:

(i) Management Support,

(ii) Management Structure.

(iii) Concern for new employees

(iv) Inter-agency conflict,

(v) Agent dependence and

(vi) General Satisfaction

Maguire has identified five factors influencing the organizational climate based on information provided by managers.

These are:

(i) Practices relating to providing a sense of direction or purpose to their jobs-setting of objectives, planning, and feedback,

(ii) Opportunities for exercising individual initiative,

(iii) Working with a superior who is highly competitive and competent.

(iv) Working with cooperative and pleasant people,

(v) Being with a profit-oriented and sales-oriented company. KATZ et. al. have identified five factors which affect individual performance in the organisation;

(i) Rules orientation,

(ii) The nurturance of subordinates,

(iii) The closeness of Supervision,

(iv) Universalism,

(v) Promotion-achievement orientation.

Lawrence James and Allan Jones have classified the following factors that influence organizational climate:

(i) Organizational Context: Mission, goals and objectives, function, etc.

(ii) Organisational Structure: Size, degree of centralization and operating procedures.

(iii) Leadership Process: Leadership styles, communication, decision making, and related processes.

(iv) Physical Environment: Employee safety, environmental stresses, and physical space characteristics.

(v) Organizational Values and Norms: Conformity, loyalty, impersonality, and reciprocity.

Impact of Organisational Climate:

Organizational climate influences to a great extent the performance of the employees because it has a major impact on motivation and job satisfaction of individual employees. Organizational climate determines the work environment in which the employee feels satisfied or dissatisfied. Since satisfaction determines or influences the efficiency of the employees, we can say that the organisational climate is directly related to the efficiency and performance of the employees.

The organizational climate can affect human behavior in the organization through an impact on their performance, satisfaction, and attitudes. There are four mechanisms by which climate affects the behavior of the employees.

1. Constraint System:

Organizational climate can operate as a constraint system in both the positive and negative sense. This can be done by providing information to the employees about what kind of behavior will be rewarded, punished or ignored. Thus, behavior can be influenced by varying degrees of rewards and punishments. Such a constraint system would influence the behavior of those people who are most interested in those specific values which are assigned to different behavioral outcomes.

2. Evaluation of Self and Others:

Organizational variables may affect behavior through the evaluation of self and others. In this evaluation process, both the physiological and psychological variables will be associated. Such evaluation will affect human behavior.

3. By Acting as Stimuli:

Organizational factors can influence human behavior by acting as stimuli. As stimuli, they influence an individual’s arousal level, which is a motivational variable directing human behavior. The level of arousal will directly affect the level of activation and hence performance.

4. By Helping the Individual to Form a Perception:

Organizational factors influence the behavior by helping the individual in forming a perception of the organization. The perception then influences behavior. Thus, a good organizational climate is instrumental to higher employee satisfaction, better human relations and higher productivity, the role of climate can be explained with the help of the following figure.

The factors indicated in the figure represent major determinants of climate in an organization and as such represent important areas of management concern. If employee satisfaction and job performance are to be improved, the management must modify these factors so that the employees view the climate as favorable to them. Various research studies also confirm the positive relationship between organizational climate and employee performance.

Frederiksen based on laboratory studies involving 260 middle-level managers concludes that different organizational climate has a different impacts on human performance. He summarizes his findings in the following statement.

“It appears that the amount of administrative work in the stimulated job is more predictable in a climate that encourages innovation .than in one that encourages standard procedures and that in an innovative climate, greater productivity can be expected of people with skills and attitudes that are associated with independence of thought and action and the ability to be productive in free unstructured situations.”

This study suggests that the performance was more predictable for subjects who worked in a consistent climate than those who had to work in an inconsistent environmental climate. The inconsistent climate was having an indirect impact on productivity. Another laboratory study shows that significant differences were found in the performance and satisfaction of people in varying organizational climates.

For example, in this study, three types of organizational climates were created:

(i) Authoritarian structured.

(ii) Democratic friendly and

(iii) Achieving business.

It was found that the achieving organization produced the most in terms of money volumes, numbers of new products and cost-saving innovations. People in a democratic friendly environment expressed maximum satisfaction with their jobs. However, people in the authoritarian structured organization produced goods of the highest quality because of the right specifications put by government orders. Other studies have shown similar results.

Dimensions of Organisational Climate:

The important dimensions or components which collectively represent the climate of an organization are as discussed below:

1. Dominant Orientation:

The dominant orientation of the organization is an important determinant of climate and it is the major concern of its members. If the dominant orientation is to adhere to established rules and regulations, the climate is characterized by control. If the orientation is to produce excellence the climate will be characterized by achievement.

2. Inter-Personal Relationships:

The interpersonal relationships in the organizations are reflected in the way informal groups are formed and operated. The informal groups may benefit the organization also, but in some cases, it may displace the goals of the organization.

3. Conflict Management:

In the organization, there can always be inter-group as well as intragroup conflicts. The organizational climate will depend upon how effectively these conflicts are managed. If they are managed effectively, there will be an atmosphere of cooperation in the organization. If they are not managed properly there will be an atmosphere of distrust and non-cooperation.

4. Individual Autonomy:

If the individual employees are given sufficient freedom to work and exercises authority, it will result in efficiency in operations. The autonomy will lighten the burden of higher-level executives.

5. Organisational Control System:

The control system of the organization can be either rigid or flexible. Rigid control will lead to an impersonal or bureaucratic atmosphere in the organization. There will be a minimum scope for self-regulation.

6. Organizational Structure:

The organizational structure serves the basis of interpersonal relations between superiors and subordinates. It clarifies as to who is responsible to whom and who is to direct whom. If there is centralization of authority, the participation in decision making by the subordinates will be very less. On the other hand, if there is decentralization of authority, there will be an atmosphere of participative decision making.

7. Task-Oriented or Relations Oriented Management:

The dominant style of managers will also affect the organizational climate. Task-oriented approach means that the leadership style will be autocratic. The employees will have to show results or face the punishment. Employee morale will be low in the long run.

If the managers are relations oriented, the climate will be considerate and supportive. There will be team spirit in the organization because the needs and aspirations of the workers will be given due importance.

8. Rewards and Punishments:

The system of rewards and punishments is also an important component of organizational climate if the reward system is directly related to performance and productivity, there will be an atmosphere of competition among the employees. Everybody will like to work hard and earn more rewards in the form of promotions and pay rise. If there is biasedness in the distribution of rewards, the meritorious employees will be discouraged.

9. Communication:

The communication system of the organization will also affect the organizational climate. The flow of information, its direction, its dispersement, and its type are all important determinants. A proper communication system means that the subordinates are in a position to express their ideas, suggestions, and reactions, otherwise, they will feel frustrated.

10. Risk-Taking:

How members respond to risks and whose help is sought in situations involving risks are important in any organization. If individuals feel free to try out new ideas without any fear they will not hesitate in taking risks. Such an atmosphere will be conducive to innovative ideas.