ORGANISATIONAL CLIMATE

Organizational climate can be defined as employees' shared perceptions or experiences of the policies, practices, and procedures of their workplace and the behaviors that get rewarded, supported, and expected there. 

According to Forehand and Gilmer, “ Organizational Climate consists of a set of characteristics that describe an organization, distinguish it from other organizations are relatively enduring over time and influence the behaviour of people in it.”

According to Campbell, “Organizational climate can be defined as a set of attributes specific to a particular organisation that may be induced from the way that organisation deals with its members and its environment.

Various dimensions of Organizational Climate are:

1)Orientation: The domain orientation of an organisation is the main concern of its members, and the

dimension is an important determinant of climate. If the dominant orientation or concern is to adhere to established rules, the climate will be characterized by control, on the other hand, if the orientation is to excel, the climate will be characterized by achievement.

2)Interpersonal Relationship: An organisation’s interpersonal-relations process is reflected in the way in which informal

groups are formed, and these processes affect climate. For example, if groups are formed for the purpose of protecting their own interest, cliques may develop and a climate of control may result; similarly, if people tend to develop informal relationships with their supervisors, a climate of dependency may result.

Various dimensions of Organizational Climate are:

3)Supervision: Supervisory practices contribute significantly to climate. If supervisors focus on helping their

subordinates to improve personal skills and chances of advancement, a climate characterized by the extension motive may result, if supervisors are more concerned with maintaining good relations with their subordinates, a climate characterized by the affiliation motive may result.

4) Problem Management: Problems can be seen as challenges or as irritants. They can be solved by the supervisor or

jointly by the supervisor and the subordinates concerned, or they can be referred to a higher level. These different perspectives and ways of handling problems contribute to the creation of an organisation’s climate.

5) Management of Mistakes: Supervisor’s attitudes toward subordinate’s mistakes develop the organisational orientation,

which is generally one of annoyance or concern or tolerance an organisation approach to maintain influence on the climate.

Various dimensions of Organizational Climate are:

6) Conflict Management: Conflicts may be seen as embracing announces to be covered up or as problem to be solved.

The process of dealing with conflicts has as significant effect on climate as that of handling problems or mistakes.

7) Communication: Communication, another important determinant of climate, is concerned with the flow of

information: its direction (topdown, bottom-up, horizontal), its dispersement (selectively or to everyone concerned), its mode (formal or informal), and its type (instructions or feedback on the state of affairs).

8)Decision Making: An organisation’s approach to decision-making can be focused on maintaining good relations

or on achieving results. In addition, the issue of who makes decisions is important: people high in the hierarchy, experts, or those involved in the matters about which decisions are made. These elements of decision-making are relevant to the establishment of a particular climate.

Various dimensions of Organizational Climate are:

9) Trust: The degree of trust or its absence among various members and groups in the organisation

affects climate. The issue of who is trusted by management and to what degree is also relevant.

10) Management of Rewards: Rewards reinforce specific behaviours; they are by arousing and sustaining specific motives.

Consequently, what is rewarded in an organisation influences the motivational climate.

11) Risk Taking:

How people respond to risks and whose help is sought in situations involving risk are important determinants of climate.

12) Innovation and Change: Who initiates change, how change and innovations are perceived, and how change is

implemented in all critical establishing climates.

Richard M. Hodgetts (1991) has classified organisational climate into two major categories. He has given an analogy with an iceberg where there is a part of the iceberg that can be seen from the surface and another part that is under water and is not visible. The visible part that can be observed called as overt factors. The secondary invisible parts that are not visible are called covert factors. Both of these categories are shown below in the form of an iceberg.

OVERT ACTORS COVERT FACTORS

Hierarchy Attitude

Financial resources Feeling

Goals of organisation Norms

Skills and abilities of personnel Values

Technological state Interaction

Performance standards Supportiveness

Efficiency measurement Satisfaction

1)Overt Factors: The overt factors are tangible, straight forward and publicly observable elements. Overt

factors can be measured and fair assessment can therefore be made about the intentions of the management and efforts they are putting in to build an appropriate organizational climate. This include:

a)Hierarchy:

The professional status of an individual in the organizational hierarchy can effect his perception of organizational climate.

b) Goals of Organization:

Steers believes that if the organization goal is to achieve favourable feedback and performance, the climate facilitating success will be more suitable, likewise if the organization aims to satisfy its staff, a friendly climate will mostly suit it. Thus, goals of organization also affect in organizational climate.

c) Technological State of Organization:

The development of technology can also shape the organizational climate. Technology encompasses major techniques and methods in organizational

processes. Changes brought about by technology may result to the

displacement of human factor in favour of machines, utilization of skills,

training for the trainable and termination from service for those without

potentials for growth and development. These changes promote a climate of

distrust and suspicion on the part of labour in the midst of management

efforts to adopt new technology in order to remain competitive and achieve

efficient business operations.

4) Financial Resources:

Organizational climate is also affected by financial policies. At the most

primary level, the sheer amount of financial resources made available to

HRD influences attitudes toward personnel department all the way down the

line

5) Skills and Abilities of Employees:

Skills and abilities possessed by the people are keys to organizational

effectiveness and productivity therefore, organizational climate should

become conducive to develop potential and competencies of the employees

and provide opportunities for fulfillment

6) Efficiency Management:

Efficiency is generally defined by the quantitative relationship between input

and output. The most common approach to measure organizational

efficiency, is in terms of the ratio of inputs to outputs. Once it is accepted

that organization is one of the factors of production, its efficiency can be

measured on the basis of its contribution of productivity improvement. The

larger the ratio the more efficient the organization will be.

7) Performance standard Adopted:

Every organization to evaluate its performance requires standards to

compare its actual performance against past performance from performance

of similar agencies/ industry standards/political expectations.

2) COVERT FACTORS: Covert factors deal with the elements that are intangible and depend on

culture or “Special Knowledge”. Covert factors cannot be quantified being of

subjective nature. These include:

a)Values and norms:

Every organization has discernible and fairly evident formal value system where certain kinds of behaviour are rewarded and encouraged and

and certain kinds of behaviour forces an individual to form sanctions. The

formal value systems is communicated to the employees through

rules,regualtions and policies. Although, in every organization the informal

organization also exists the value system of informal organization is very

difficult to ascertain. But from the point of view of organizational climate, both

formal and informal groups are very powerful in exerting influence on climate.

b) Attitude:

When employees feel that management is thinking about their welfare, they

maintain a positive attitude and this positive attitude helps to maintain

healthy atmosphere. Thus, when employees carry a positive attitude then

organizational climate can be favourable.

c) Satisfaction:

The satisfaction of employees with organizational climate is predictor of

better performance. The satisfaction of employees with organizational

climate enhances positive organizational outcomes efficiency, productivity,

organizational commitment and cohesiveness of co workers while it reduces

negative outcomes, turnover, deviant behaviourat work, absenteeism and

stealing of company property.

d) Feelings:

Organizational climate is an indication of employees feelings and beliefs of what the organization is all about

e) Interaction:

Organizational climate is characterized by the nature of the people organization relationship and the superior subordinate relationship. These relationships are determined by interactions among goals and objectives, formal structure, the process of management, styles of leadership and behaviour of people.

f) Supportiveness:

The supportiveness of organizational climate has positive relationship with job satisfaction, commitment with the organization and performance at work.

Importance of Organizational climate is as follows:

1) Increased Employee Performance:

Climate at the work place is an excellent predictor of performance of an

organization and employee, because positive environment results in

motivated who enjoy working.

2) Develop strong relationship:

Organizational climate supports manager to know the relationship stuck

between the processes and practices of the firm and the needs of

employees. By understanding how different practices and initiatives

stimulate employees, managers will be able to understand what motivates

employees to behave in a manner that leads to a positive climate and results

in the organization’s success.

3) Determinants of Success or Failure:

organizational climate plays an important role in the success or failure of

organization. As if Organizational climate is good, employees will be willing

to be in association with others. Then employees like to perform the job

with pleasure and satisfactions. Therefore, organizational climate decides

the success or failure of the organization.

4) Managers can get their work done easily:

Managers experience that employees follow their orders with

respect, Manager’s instructions will be pleasantly obliged by the

subordinates

5)Develop Confidence:

When the organizational climate is good it develops confidence in the

subordinates. As subordinates will work hard and show confidence to their

superiors.

6) Resource Conservative:

Dissatisfied employees destroy the organizational resources whereas

satisfied employees will help in maintaining the resources. Management and

employees will have ultimate gains through low cost of production and

better incentives respectively.

7) Social benefit:

The society will be benefited by the regular supply of goods at lower prices form an effective organization. As when the employees are satisfied and are cooperative in nature will help in reserving the organization’s resources.

8) Reduces Turnover:

Employees work happily and associate with the company for a long time.

Employees turnover,absenteeism will be lowered when morale is high

9) Develop a sense of Attachment with Organization:

Employees feels attachment with the organization as high morale attracts

and holds good employees for a long time. It results in increased job

performance and improves cooperation and brings unity.

10) Develop Healthy Organization:

Organizational climate creates favourable atmosphere among customers,

public,suppliers and organizational particulars. It keeps organization

healthy.

11) Creates Innovativeness:

If climate is healthy, employees will be more innovative as comparison to other organization’s stressful climate. With changing scenarios in the world economy, companies want very smart,professional and innovative team members who are groomed within the organization by out performing other non productive team members. Companies promote a healthy work environment and organizational climate so that the employees feel free to innovate and outshine for their organization.

12) Increases Production:

Good and healthy climate increases productivity level of employees.

Organizational climate represents how the employees feel about the

atmosphere. Employees are the key resources of an organization. For the

development of an organization it is necessary to make them feel good.