As an organization expands its growth and extends its structure, the need to construct a positive work environment becomes increasingly important for job satisfaction and increased productivity of the employees. In large organizations, employees work in collaboration with multiple teams and directly and indirectly report to a good many managers of different departments spread across different countries. Unless a good organizational climate is in place, the job performance, the productivity of the company and the business interests are likely to suffer. The climate of an organization is often compared with the personality of an individual. Just as personality of each individual varies from one another same way the climate in each organization varies. In order to know how organizational climate affects the performance of employees, it is very important to have knowledge of what organizational climate is and the factors associated with a positive organizational climate.
What is Organizational Climate?
Organizational climate is the working environment of an organization. Organizational climate consists of a mixture of components like values, policies, procedures, norms, and expectations that motivate employees to work, stay committed to their goals and improve their performance. Organizational climate demonstrates an organizational culture. A good organization climate ensures a congenial work environment for the employees to keep them motivated for a long time, increasing their level of endurance to deal with stressful work pressures and the result shows in the increase of productivity of the employees as well as the organization as a whole whereas negative organizational climate demotivates employees making them feel disconnected with the company's interest. When employees are valued and rewarded for their hard work and given recognition, they feel motivated to work hard to achieve the business goals of the company.
Therefore, it is very important for a company to have congenial organizational climate because the performance of the employees, their productivity and their motivation to work depend on it. Organizational climate can be defined by a set of relatively enduring characteristics established by an organization to distinguish itself from other organizations and influence the perceptions and behavior of the employees. Organizational climate is a "set of attributes specific to a particular organization that may be induced from the way that organization deals with its members and its environment" (S.K. Srivastava 2005, p 40).
Factors Contributive to Organizational Climate
There are various organizational factors contributing to the growth of an organizational climate. It is very important to consider the perception of the employees towards these factors because their perception would ensure the sustainability of these factors in an organizational climate. Some keys factors conducive to organizational climate are as follows:
Leadership is one of the most important factors to induce a healthy organizational climate. How a leader guides a group of employees or an individual to meet the business targets of the company makes a lot of difference on the behavior and expectation of the employees. A leader not only needs to make strategies to implement different changes required to gain competitive advantage in the market, he also needs to motivate his employees to stay committed in their objectives.
Organizational Structure refers to a set of activities like coordination and supervision, work allocation aimed at accomplishing the organizational targets. The organizational arrangement of how a work is done speaks volumes about the organization in terms of what it considers important for achieving success, how much value it attaches to its employees and its commitment towards them.
Historical Forces related to the circumstances, values and creative attributes surrounding the foundation of an organization influence the values and the model of an organization. The measures taken to deal with past crises would determine the route to be followed for dealing with future crises. If an organization was founded by innovative leaders, their influence would create an environment marked by creativity. Same way, if an organization resisted change and innovation in its past history, most likely it would be hesitant in implementing changes in the future and might react dramatically to any change.
A standard of accountability should be maintained in an organization to promote a good organizational climate ensuring that the employees are aware of the responsibility of their performance and behaviors.
Some basic standards of behaviors should be followed in an organization to maintain a healthy work climate. Leaders should emphasize on the importance of these behaviors by putting a performance measurement process in place. That violation of behavioral standards would result in unpleasant consequences should be maintained. Communication, for example, is a very important aspect of desired behavior in any organization. An organization should promote a healthy communication pattern so that employees can freely voice their constructive feedback, resolve conflicts and show mutual respect. On the other hand, rumors or gossips and negative criticism should be discouraged. Example of positive feedback communication pattern is found the way IBM operates its 360 ° feedback system in which managers as well as employees can give feedback about each other. In this feedback system, employees can rate the managers on a scale of 5 and voice their opinion about the manager anonymously.
Vision and Strategies reflect the future ambition of an organization. If an organization adopts an aggressive vision statement and aligns it goals, strategies and priorities with its vision, over a time the organizational climate would mirror the same. For instance, Accenture’s vision statement is to become one of the leading companies in the world, bringing in innovation in the way it delivers. All the goals and strategies of the company including client value creation, one global network, and integrity are in alignment with their vision statement.
Organizational Connectiveness also determines the organizational climate of a company. An organization consists of various departments, agencies, and employees belonging to different domains including technical and financial sector and management. An organization should abridge the difference by bringing different professionals into an effective cohesion. They must be given training and motivated to work as a unit functioning to fulfill the same objective of the growth and success of the organization.
Rewards and Recognition work as an important motivation for the employees to give their utmost efforts to fulfill their job objectives. Different companies have different rewards and recognitions programs in place which not only encourage the improvement of performance, but also help employee retention.
The Effect of Organizational Climate
Organizational climate makes a huge impact on the performance of employees by influencing their degree of motivation and their job satisfaction. All the employees have some sort of expectations from the organization they work for and the fulfillment of their expectations reflects how the organizational climate aligns itself to meet the satisfaction requirement of the employees. Organization climate creates a type of work ambiance leading to either satisfaction or dissatisfaction of the employees. As satisfaction level determines a person's efficiency, it can be stated that organizational climate is directly linked with the performance of employees in the organization. An organizational climate that ensures job satisfaction results in higher commitment, greater performance and higher productivity from the employees.
The perception of the employees as regards the organization climate is important in terms of their feelings about the job and their undertaking of the effort to improve performance. Numerous studies done in order to figure out the correlation between organizational climate and employees performance and job satisfaction show that the employees who viewed their organizational climate as supportive to growth, opportunities, advancement etc. felt that the positive work environment helped them give their best effort to their performance whereas the employees who viewed their organizational climate as unsupportive felt that the work situation is not favorable for giving best effort at work. If a supportive organizational climate contributes an increase in performance and job satisfaction, the unsupportive work environment brings about the opposite result in decreased performance and low job satisfaction.
A study conducted on 68 supply chain managers from 10 different companies shows how the perception of employees about their organizational climate is related to their performance. Supply chain managers who stated that their organizational climate facilitated their desire to give their best to the performance implied that they viewed their organization as supportive while the managers who didn't view their organizational climate as supportive reported that their organization didn't facilitate giving their best performance (The Kennedy Group Ltd).
The organizational climate varies from one organization to another and so does its impact on the employees. A positive organizational climate is neither highly restrictive nor static. It allows the employees certain amount of freedom and space for innovations so that the employees can utilize their potential and creative skill. In the annual list of Fortune, Google has been listed as No.1 company out of the 100 best companies to work for and the reason why Google is so sought-after among the people is its innovative and creative organizational climate in which employees are encouraged to work as a team. Alongside lots of perks, unlimited sick leaves, Google offers its employees the opportunity to put their imagination and creativity to work. Google is constantly changing and growing its policies and procedures. One good example would be how it revamps its maternity leave plan. When the company found that the new mothers were leaving the concern for 12 weeks paid time off, it immediately changed its plan allowing new mothers 5 months long paid time off with all the perks, benefits and full payment. The result was 50% decrease in attrition rate for new mothers (Zach Bulygo)
Organizational climate refers to a favorable work environment that helps employees nurture their skill and expertise and give their best performance. The perception of employees regarding the organizational climate is very important for the job satisfaction and improvement of performance. Organizational climate is determined by few factors including leadership, standards of behaviors, rewards and recognition, organizational structure and visions and strategies. Since the job satisfaction level depends on organizational climate to a large degree, the performance of employees is directly linked with it. A positive relationship between individual performance and organizational climate is established when a company is able to mold the behaviors of its employees in the right direction of growth and opportunities. An organizational climate is successful when both the employees and the employer take some positive aspects out of it.
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