Concept of Organizational Climate

Organizations are social systems. Organizations combine science and people, technology and humanity. It is not possible for every organization to have the same type of technology and people and so the organizations differ in their characteristics and internal environment.

The internal environment of an organization may be called the organizational climate. Organizational climate, a guide for dealing with people serves as a major influence on motivation and productivity of individuals and total work force. Organizational climate may be noted as the ‘personality’ of an organization as conceived by its employees. The organizational climate usually has a major influence on motivation, productivity and job satisfaction. The organizational climate is the major motivating factor responsible for satisfaction and dissatisfaction of employees in an organization and affects the quantum of employees’ turnover and satisfaction. It refers to the entire social system of a working group.

Campbell defines organizational climate as a “set of attributes specific to a particular organization that may be deduced from the way that the organization deals with its members and its environment”.

Thus organizational climate is the perceptional environment prevailing in an organization based on which employees do their work. It will have a major impact on the smooth flow in the management of an organization.

Six factors which can affect organizational climate are:

  1. Organization structure: Ideas on the extent of organizational constraints, rules and regulations.
  2. Individual responsibility: Having a sense of autonomy of being one’s own boss.
  3. Rewards: Commensurate rewards to recognize performance.
  4. Risk and risk taking: The degree of challenge and risk to be sustained by the incumbent.
  5. Warmth and support: Feelings of general good fellowship and helpfulness prevailing in work settings.
  6. Tolerance and conflict: Degree of confidence that the climate can tolerate differing opinions.

Influence of Organizational Climate on Human Performance

When the organizational climate is viable, the incumbent gets motivated and his performance is up to the expectation of the management. Consequently, he gets job satisfaction that reduces turnover. Organizational climate provides a type of work environment in which an individual feels satisfied or dissatisfied. Since satisfaction of individual determines his efficiency, organizational climate can be said to be directly related to his performance in the organization. Organizational climate affects performance, satisfaction and attitudes of people in the organization. A sound climate is a long run proposition. Managers need to take an assets approach to climate, meaning that they take the long run view of climate as an organizational asset.

Performance was more predictable for subjects who worked in a consistent climate than those who had to work in an inconsistent environmental climate. Inconsistent climate was having negative impact on productivity. The organizational climate may be one of trust and confidence or one of fear and reprisal. Various organizational climates have different impacts on individual motivation, satisfaction and attitudes.

The climate of an organization derives originally from the philosophy and goals of those who join together to create it. The philosophy and goals of people are implemented by leadership working through formal and informal organization. Formal and informal organization provide the structure to bind the institution together into a working team.