What is Organizational Climate and Why Should You Warm Up to it?

What Is Organizational Climate?

Perhaps one of the most important and significant characteristics of a great workplace is its organizational climate. Organizational climate, while defined differently by many researchers and scholars, generally 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
  • Leadership

Organizational climate, manifested in a variety of human resource practices, is an important predictor of organizational success. Numerous studies have found positive relationships between positive organizational climates and various measures of organizational success, most notably for metrics such as sales, staff retention, productivity, customer satisfaction, and profitability:

  • 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.
  • Patterson, Warr, & West (2004) found that manufacturing organizations that emphasized a positive organizational climate, specifically concern for employee well-being, flexibility, learning, and performance, showed more productivity than those that emphasized these to a lesser degree.
  • Potosky and Ramakrishna (2001) found that an emphasis on learning and skill development was significantly related to organizational performance.
  • 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.

Organizational climate clearly influences the success of an organization. Many organizations, however, struggle to cultivate the climate they need to succeed and retain their most highly effective employees.  Hellriegel and Slocum (2006) explain that organizations can take steps to build a more positive and employee-centered climate through:

  • Communication – how often and the types of means by which information is communicated in the organization
  • Values – the guiding principles of the organization and whether or not they are modeled by all employees, including leaders
  • Expectations – types of expectations regarding how managers and behave and make decisions
  • Norms – the normal, routine ways of behaving and treating one another in the organization
  • Policies and rules - these convey the degree of flexibility and restriction in the organization
  • Programs – programming and formal initiatives help support and emphasize a workplace climate
  • Leadership – leaders that consistently support the climate desired

Making a climate change in your organization is one of the core fundamental steps to beginning to create a great place to work. The 2009 NorthCoast 99 winners have excelled at creating such climates.  We encourage you to visit http://www.northcoast99.org to learn more about these companies. 

Sources:

  • Hellriegel, D., Slocum, J., & Woodman, R. (1998). Organizational Behavior.
  • Denison, D. (1990). Corporate Culture & Organizational Effectiveness
  • Patterson, M., Warr, P., & West, M. (2004). Organizational climate and company productivity: The role of the employee affect and employee level. Journal of Occupational and Organizational Psychology.
  • Schneider, B. (1990). Organizational Climate and Culture.
  • Potosky, D., & Ramakrishna, H. (2001). Goal orientation, self-efficacy, organizational climate, and job performance. Academy of Management.
  • Ekvall, G. (1996). Organizational climate for creativity and innovation. European Journal of Work and Organizational Psychology.
  • Hansen, G. & Wernerfelt, B. (1989) Determinants of firm performance: The relative importance of economic and organizational factors. Strategic Management Journal.
  • Thompson, M. (1996) in Ashkanasy, N., Wilderom, C., & Peterson, M. (2000) Handbook of Organizational Culture & Climate.
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25 Responses to What is Organizational Climate and Why Should You Warm Up to it?

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  2. john says:

    Hi,

    Can you provide the details for the following:

    How to create the Organizational climate for Training and Development.

    Thanks,
    John

  3. kamlesh singh says:

    Iam interested in doing organizational climate research in yhe school I teach.Kindly help me with some tools /tests which will be suitable in indian context.

  4. Asfaw Haddis says:

    i want to do areasarch on organizational climate in one of my organization which is in great problem. What can you help me?

  5. Kabo says:

    What Organisational Climate? Discuss main characteristics of organisational cliamte.

  6. abhay patel says:

    hi friends

    i am going to undertake project on ORGANIZATIONAL CLIMATE for my MBA project work. so pls help me regarding any research work on my topic.

    my id abhaypatel10@yahoo.com

  7. Stephany Ann says:

    good evening…

    i just want to clarify if the organizational climate emphasize the working environment of the teachers and other people administering the school or other organization? thanks

  8. junaid khan says:

    hi,
    i am going to conduct research on oraganizational climate and job satisfaction kindly send me main characteristics of organizational climate
    thanks

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  10. amy says:

    How does service and performance climate predict customer satisfaction,in an environment where its not convinient for them?

  11. SD says:

    Is Organizational Climate and Job Climate one and the same?

  12. nana yaw nkrumah jnr... says:

    distinguish between organizational climate and organizational culture…..

  13. anisa prima says:

    HI, could you provide some inventory to measure organizational climate? if you any suggetion for it could you send it to anisa.prima@ui.ac.id?I really need that for my last assignment, I’m really glad if you could send it to me :), thank you

  14. Lateef Olamide says:

    The Climate in an Organization helps to know how to deal with both the employee and the customers of that Organization and that determine the success of the Organization.
    The individual difference is felt through the Climate in an Organization i.e what a person like another might not like it. However,Organizational Climate is very important to make Organizations succeed

  15. WELLINGTON says:

    what is kotter and poter study on organizational climate

  16. sandeep rawat says:

    Can anybody tell me the types of organisational climate?

  17. Edet, Archibong Ekpenyong says:

    pls i need the introduction to school organizational climate

  18. Hello! I know this is somewhat off topic but I was wondering which blog
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  20. Victor says:

    Please I am writing on this topic “the influence of organisational support and organisational climate for creativity on O.C.B and taking charge at work”. Please any material received will be appreciated.

  21. Silrak Sangma says:

    Thank you sir/madam for this note..

  22. Jhay says:

    Can anybody tell me something about Motivation in Organizational Climate? its not written here in the page
    .plssssssssssssssssssssss

  23. randolf gearhart says:

    gud day!
    am making my thesis about “organizational climate in job performance”,cud u help me regarding my study?cud u help me rephrase my title or simplify for better understanding?and pls give me some referrences for better output.thanks!!!

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