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Personnel policies And Organizational Climate in Personnel Management
- 1. Personnel Policies KRISTIN M. CEPEDA
- 2. Administration of Personnel Policies ⢠Usefulness Employee orientation and training Administering disciplinary action
- 3. Administration of Personnel Policies ⢠Usefulness Handling complaints and grievances. Delegation and decentralization of responsibility and authority
- 4. Administration of Personnel Policies ⢠Usefulness Enabling the supervisors and managers to develop confidence in themselves in their day-to-day relationships with their subordinates.
- 5. Administration of Personnel Policies ⢠Problems in Implementation Lack of provision as to the procedure for their implementation with fairness and understanding. Failure to name the specific official that will administer the policy, or the inefficiency or incompetence of the administrator of the policy.
- 6. Administration of Personnel Policies ⢠Problems in Implementation Resistance or reluctance to accept the policy. Lack of training of supervisors and managers on how to implement the personnel policies.
- 7. Administration of Personnel Policies ⢠Problems in Implementation Lack of uniformity and consistency in the application of the policy. Strict or legalistic manner of interpreting policies. Impracticability of the policy itself due to failure of management to make the needed amendments.
- 8. Administration of Personnel Policies ⢠Communicating Personnel Policies and Regulations Employee Handbook Policy Manual Memoranda and Circular Company Bulletin Boards Meetings or Conferences
- 9. What are Company Rules? specific guides intended to govern conduct or actionaimed to guide operating supervisors and employees laws with penalties attached give life to policies because they protect the rights of all the personnel and provide uniformity in the application of policy.
- 10. Practices Differentiated from Procedures Procedures are methods used in implementing policies and rules. It tells people what work to do, who, where, how, and when to do it. Good planning of the procedures will assure ease in application and cut down overlapping and conflicts.
- 11. The Cost of Personnel Services â˘The cost of personnel program may be determined by the expenditures needed to carry out the functions and activities involved in it.
- 12. The Cost of Personnel Services ⢠A company program must pay for itself in pesos or centavos by: 1. Helping management in the careful selection and retention of employees who can provide customers with goods and services at competitive price. 2. Applying motivation techniques in promoting effective labor- management cooperation to achieve maximum efficiency and economy in the production of goods and services and to avert lawsuits, slowdowns and strikes. 3. Creating a favorable company image.
- 13. Personnel Statistics ⢠The personnel manager should at least be able to formulate and present in an understandable form the data on the various program and activities of the company.
- 14. Personnel Statistics ⢠Personnel strength projections ⢠Rate of turn over ⢠Rate of tardiness and absenteeism ⢠Computation and conversion of income rates. ⢠Rate of illness and medical costs. ⢠Projection of manpower requirements ⢠Expenditure for employees benefits ⢠Labor cost of non-productive time ⢠Costs of employee benefits and its relationship with payroll.
- 15. Budgetary Support A budget is a financial estimate of future needs, arranged in an orderly manner and covering some or all activities involved in the program for a definite period of time. Personnel manager should be involved in determination and administration of the budget for all employees.
- 16. Personnel Staff Ratio Functions and services handled by the department. Company size and nature of business
- 17. Organizational Climate KRISTIN M. CEPEDA
- 18. ORGANIZATIONAL CLIMATE â˘developed in the late 1930s by the social scientists â˘They used social climate term to describe subjective feelings or atmosphere.. âŚaspects of the environment that are consciously perceived by organizational members (Armstrong, 2003)
- 19. Defining Organizational Climate âŚ.a mutually agreed internal (or molar) environmental description of an organizationâs practices and procedures (Schneider, 1975).
- 20. Defining Organizational Climate âŚ. is the shared perception of employees who work and live in the organization. regarding the organizational procedures, policies and practices psychological environment consisting of individual opinions
- 21. Defining Organizational Climate âŚfacilitates the firm to identify to the deficiencies in connection with different organizational factors.. organizational structure, employee compensation system, communication level, physical atmosphere, organizational culture, etc âŚa trait of the firm on how it deals with associates, team members and organizational problems. The experiences of employees in the organization that influences their performance.
- 22. Defining Organizational Climate is comprised of a mixture of norms, values, expectations, policies and procedures that influence work motivation, commitment and ultimately individual or work unit performance Climate is the personality of an organization as seen by its members.
- 23. Defining Organizational Climate refers to the quality of working environment.
- 24. Defining Organizational Climate .. Influence the behavior of organizationâs members. linked to outcome measures such as job satisfaction and productivity Set of perceived measurable properties of work environment that influence employeeâs motivation and behavior. flexibility, responsibility, standards, rewards, clarity and team commitment.
- 25. Organizational Climate vs Organizational Culture ..are similar concepts in that both describe the experiences of employees and assist us in understanding psychological phenomena in particular organizations, and to provide explanations on how organizations influence behavior, attitudes and the well- being of individuals..
- 26. Organizational Climate vs Organizational Culture Organizational Climate ⢠shared perceptions and meaning attached to the policies, practices, and procedures employees experience ⢠behaviors they observe getting rewarded Organizational Culture ⢠shared basic assumptions, values, and beliefs taught to newcomers ⢠proper way to think and feel
- 27. Organizational Climate vs Organizational Culture Organizational Climate â˘Has its roots in social psychology discipline Organizational Culture â˘Originates in the anthropology domain
- 28. Organizational Climate vs Organizational Culture Organizational Climate ⢠Focus is on the individual's perceptions and cognitions which are used to comprehend and discriminate attributes of the organizationâs internal environment Organizational Culture â˘Focus is on analyzing the underlying structure of symbols, myths and rituals which lead to shared values, norms and meanings in groups
- 29. Organizational Climate vs Organizational Culture Organizational Climate â˘Relatively enduring Organizational Culture â˘Highly enduring
- 30. Organizational Climate vs Organizational Culture Organizational Climate ⢠More shallow with regard to penetrating individualsâ consciousness and organizational realities. It is more visible and operates at the level of attitudes and values. Organizational Culture â˘Occurs at the level of attitudes and values, but also at a deeper level of assumptions. Is relatively invisible and is preconscious in individuals.
- 31. Organizational Climate vs Organizational Culture Organizational Climate â˘Evolves more quickly and changes rapidly. Organizational Culture â˘Evolves slowly and is not easy to change
- 32. Organizational Climate vs Organizational Culture Organizational Climate â˘Unique characteristics of individuals are evident. Organizational Culture â˘Collective characteristics are exhibited.
- 33. Importance of Organizational Culture ⢠Organizational climate provides a useful platform for understanding such characteristics of organizations as stability, creativity, innovation, communication and effectiveness.
- 34. Importance of Organizational Culture â˘Behavior of people can be change by changing the organizational climate
- 35. Importance of Organizational Culture â˘Organizational climate is essentially about âwhat itâs like to work hereâ.
- 36. Importance of Organizational Culture â˘Climate assists managers to understand the relationship between the processes and practices of the organization and the needs of employees.
- 37. Importance of Organizational Culture â˘A high-performing climate leads to higher customer commitment, customer satisfaction and profit contribution margin.
- 38. Good Climate VS Bad Climate ⢠areas to measure in determining whether the organizational climate is good or bad: External environment Organizational leadership Organizational Structure Management Practices Working with co- workers / teams / supervisor Self - at work (your role, development, opportunities, motivation, commitment, stress) Self - outside work (how work affects your life and vice versa.)
- 39. Good Climate VS Bad Climate ⢠Benefits of a âgoodâ climate, and disadvantages of many kinds of bad climate. âBadâ Climat e has been linked to: â˘1. Turnover â˘2. Stress â˘3. Sickness â˘4. Poor Performance â˘5. Error Rate â˘6. Wastage â˘7. Accidents âBadâ Behavior such as: â˘1. Sabotage â˘2. Absenteeism â˘3. Go-slow â˘4. Bullying
- 40. Good Climate VS Bad Climate ⢠Benefits of a âgoodâ climate, and disadvantages of many kinds of bad climate. âGoodâ Climate has been linked to: â˘1. Job Satisfaction â˘2. Confidence in Management â˘3. Affective Commitment â˘4. Intention to Quit â˘5. Emotional Exhaustion â˘6. Faith in Organization â˘7. Performance âGoodâ Behavior such as: â˘Risk-taking (Strategic) â˘2. Departure from the status â quo â˘3. Open Communication â˘4. Trust â˘5. Operational Freedom â˘6. Employee Development
- 41. ⢠A key point to make is that a âgoodâ climate is not just one that keeps people comfortable, but one that is strategically advantageous to the organization while simultaneously bringing out the best in its members because they are in a motivational climate.
- 42. Impact of Organizational Climate â˘influences to a great extent the performance of the employees because it has a major impact on motivation and job satisfaction of individual employees. climate determines the work environment in which the employee feels satisfied or dissatisfied âŚorganizational climate is directly related to the efficiency and performance of the employees. The organizational climate can affect the human behavior in the organization through an impact on their performance, satisfaction and attitudes.
- 43. Impact of Organizational Climate ⢠There are four mechanisms by which climate affects the behavior of the employees. 1. Constraint System ..can operate as a constraint system in both the positive and negative sense. âŚdone by providing information to the employees about what kind of behavior will be rewarded, punished or ignored.
- 44. Impact of Organizational Climate ⢠There are four mechanisms by which climate affects the behavior of the employees. 2. Evaluation of Self and Others ⌠both the physiological and psychological variables will be associated. Such evaluation will affect the human behavior.
- 45. Impact of Organizational Climate ⢠There are four mechanisms by which climate affects the behavior of the employees. 3. By Acting as Stimuli âŚinfluence individualâs arousal level, which is a motivational variable directing human behavior. The level of arousal will directly affect the level of activation and hence performance.
- 46. Impact of Organizational Climate ⢠There are four mechanisms by which climate affects the behavior of the employees. 4. By Helping the Individual to Form a Perception The perception then influences behavior. To improve performance, the management should modify how employees view climate.
- 47. Dimensions of Organizational Climate: ⢠The important dimensions or components which collectively represent the climate of an organization are as discussed below: 1. Dominant Orientation 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.
- 48. Dimensions of Organizational Climate: ⢠The important dimensions or components which collectively represent the climate of an organization are as discussed below: 2. Inter-personal relationships reflected in the way informal groups are formed and operated
- 49. Dimensions of Organizational Climate: ⢠The important dimensions or components which collectively represent the climate of an organization are as discussed below: 3. Conflict management There is inter-group and intra-group conflicts COOPERATION - when managed effectively
- 50. Dimensions of Organizational Climate: ⢠The important dimensions or components which collectively represent the climate of an organization are as discussed below: 4. Individual Autonomy Employeeâs freedom can result to efficiency Autonomy lighten the burden of higher level executives
- 51. Dimensions of Organizational Climate: ⢠The important dimensions or components which collectively represent the climate of an organization are as discussed below: 5. Organizational Control System Control can be rigid or flexible Rigid control may lead to bureaucratic atmosphere
- 52. Dimensions of Organizational Climate: ⢠The important dimensions or components which collectively represent the climate of an organization are as discussed below: 6. Organizational Structure Structure serves as basis of inter- personal relations Centralization and decentralization
- 53. Dimensions of Organizational Climate: ⢠The important dimensions or components which collectively represent the climate of an organization are as discussed below: 7. Task oriented or relations oriented management ⢠Task oriented â leadership is autocratic ⢠Relation oriented â climate is considerate and supportive
- 54. Dimensions of Organizational Climate: ⢠The important dimensions or components which collectively represent the climate of an organization are as discussed below: 8. Rewards and Punishment Important component if reward system is directly related to performance and productivity.
- 55. Dimensions of Organizational Climate: ⢠The important dimensions or components which collectively represent the climate of an organization are as discussed below: 9. Communication Proper communication system means that the subordinates are in a position to express their ideas, suggestions and reactions, otherwise they will feel frustrated.
- 56. Dimensions of Organizational Climate: ⢠The important dimensions or components which collectively represent the climate of an organization are as discussed below: 10. Risk Taking If individuals feel free to try out new ideas âŚ.Such an atmosphere will be conducive to innovative ideas.
- 57. Developing a Sound Organizational Climate Effective Communication System Concern for People Participative Decision Making Change in Policies, Procedures and Rules Technological Changes
Editor's Notes
- Rules are specific guides intended to govern conduct or action and are aimed to guide operating supervisors and employees in the performance of their designated activities. They are the laws with penalties attached, by which these activities are enforced. Rules are especially important to supervisors because they have to make decisions on recurrent problems. Rules are therefore, issued to save time and effort on the part of supervisors and managers and to establish control or direction within reasonable limits. Rules also give life to policies because they protect the rights of all the personnel and provide uniformity in the application of policy. They are also essential in maintaining organized effort, in preventing confusion and delay, and avoiding injustice to any employee. Since policies are general plans of action and have to be stated in broad terms, rules are needed to specify the means of implementing them.
- Procedures are methods used in implementing policies and rules. They specify the way of carrying out policies or rules. Personnel procedures prescribe the different steps to be followed in implementing policies. Procedures are established to avoid unnecessary difficulties such as red tapes in carrying out the policy. Practices on the other hand, are what actually being done in the organization, especially in implementing the personnel program. Procedure prescribes the method of performing a certain activity. It tells people what work to do, who, where, how, and when to do it. A procedures establishes the sequence of steps to perform a specific activity. Procedures are necessary in implementing policies. It must be adjustable to meet certain circumstances and changing situations. They must be well-planned and designed to effectively accomplish the objectives of said policies. Good planning of the procedures will assure ease in application and cut down overlapping and conflicts.
- The cost of personnel program may be determined by the expenditures needed to carry out the functions and activities involved in it. The personnel manager must be cost conscious in advising management on the formulation of personnel policies and the adoption of a sound personnel program that will fit the needs of the companyâs ability to support.
- A company program must pay for itself in pesos or centavos by: Helping management in the careful selection and retention of employees who can provide customers with goods and services at competitive price. Applying motivation techniques in promoting effective labor- management cooperation to achieve maximum efficiency and economy in the production of goods and services and to avert lawsuits, slowdowns and strikes. Creating a favorable company image.
- Statistical presentation is important because the success of the organization is in terms of pesos and centavos. A personnel manager need not be a mathematician to accomplish this but he should at least be able to formulate and present in an understandable form the data on the various program and activities of the company. These data could be presented in percentages and ratios to project the findings and significance through graphs and illustrations. The data on personnel that are generally required are the following: Personnel strength projections Rate of turn over Rate of tardiness and absenteeism Computation and conversion of income rates. Rate of accidents; and the effect of safety program to cost of operations. Rate of illness and medical costs. Costs of employee benefits and its relationship with payroll. Manpower losses due to non-productive time because of absenteeism, tardiness, maternity leave, sick leave, vacation leave, accident leave or other calamities. Projection of manpower requirements Expenditure for employees benefits Labor cost of non-productive time due to emergencies like typhoons, floods, and non-work days but companies are required to pay
- Statistical presentation is important because the success of the organization is in terms of pesos and centavos. A personnel manager need not be a mathematician to accomplish this but he should at least be able to formulate and present in an understandable form the data on the various program and activities of the company. These data could be presented in percentages and ratios to project the findings and significance through graphs and illustrations. The data on personnel that are generally required are the following: Personnel strength projections Rate of turn over Rate of tardiness and absenteeism Computation and conversion of income rates. Rate of accidents; and the effect of safety program to cost of operations. Rate of illness and medical costs. Costs of employee benefits and its relationship with payroll. Manpower losses due to non-productive time because of absenteeism, tardiness, maternity leave, sick leave, vacation leave, accident leave or other calamities. Projection of manpower requirements Expenditure for employees benefits Labor cost of non-productive time due to emergencies like typhoons, floods, and non-work days but companies are required to pay
- A budget is a financial estimate of future needs, arranged in an orderly manner and covering some or all activities involved in the program for a definite period of time. A budget is an effective and practical managerial aid in controlling the program and in fixing the responsibility for carrying it out. It is a good company policy to involve its personnel manager in the determination and administration of the budget for personnel not only for their department but also for all employees below the rank of managers. Several factors may affect the amount to be allocated in the personnel budget, such as the expected company income, the economic conditions of the community, the payroll and projected increases due to expansion and growth during the year, fringe benefits, etc. For budgetary purpose, the cost of implementing a personnel program depends on, among other things, salaries of personnel, outlays for supplies and equipment, projected increases in salaries of the present as well as of the new employees to be hired, and the cost of fringe benefits and other expenditures for the employees under the personnel department.
- Personnel Staff Ratio In actual practice, there is no rule of thumb to determine the number of employees in the personnel department since there is much diversity in the functions and services to be performed, and in the size and nature of the business of different firms. Functions and services handled by the department. If the personnel department handles such duties and responsibilities as employee recruitment and selection, employee benefits, training, safety, health and medical services, job evaluation, wage and salary administration, and labor relations, the staff needs of a department will be much greater than those of a firm which handles only a few of such functions. Company size and nature of business. For instance, a small company may have to maintain a higher ratio than a large company. Â
- The concept of organizational climate was developed in the late 1930s by the social scientists, Lewin et al (1939). They used social climate term to describe subjective feelings or atmosphere they encounter in their studies of organizations. The climate of an organization refers to those aspects of the environment that are consciously perceived by organizational members (Armstrong, 2003). In short, it refers to how the members of an organization perceive it as it goes about its daily business.
- The most widely adopted definition is that of Benjamin Schneider (1975), who defined organizational climate as a mutually agreed internal (or molar) environmental description of an organizationâs practices and procedures. Within this definition, it should be noted that the focus is on organizational membersâ agreed perceptions of their organizational environment.
- Organizational climate is the shared perception of employees who work and live in the organization. It is the sum of individual perceptions regarding the organizational procedures, policies and practices. It represents the psychological environment of the organization consisting of individual opinions framed upon micro events that happen to them as well as to others around, over a period of time. It is the set of measurable properties of the work environment, perceived directly or indirectly by the members, influencing their work and satisfaction.
- The Organizational Climate facilitates the firm to identify to the deficiencies in connection with different organizational factors, such as organizational structure, employee compensation system, communication level, physical atmosphere, organizational culture, etc. It is the apparent trait of a firm and its sub-systems as replicated in the mode in which an organization deals with its associates, team members and organizational problems. It is comparatively enduring excellence of the in-house atmosphere that is experienced by its employees which influences their performance and can be described in terms of the values of a specific set of behaviors in the firm.
- Organizational Climate is comprised of a mixture of norms, values, expectations, policies and procedures that influence work motivation, commitment and ultimately individual or work unit performance. Organizational Climate refers to the prevalent attitudes, values, norms and feelings which the employees have about the organizations. Every organization has an internal and external climate which influences the practices and behavior of both the management and the employees. Just like the personality of an individual, climate is the personality of an organization as seen by its members. All the organizational components structure, system, culture, leader behavior, psychological needs of the employees, socio-cultural, values etc., interact with one another and create organizational climate.
- Organizational Climate refers to the quality of working environment. If people feel that they are valued and respected within the organization, they are more likely to contribute positively to the achievement of business outcomes. Creating a âhealthyâ organizational climate requires attention to the factors which influence employeesâ perceptions, including the quality of leadership, the way in which decisions are made and whether the efforts of employees are recognized.
- Organizational Climate is an important concept because it is an influence on the behavior of organization members. It has been linked to outcome measures such as job satisfaction and productivity. Organizational Climate serves as the guidelines for dealing with people, and has a major influence on motivation and productivity of individuals as well as total work group. Organizational climate refers to a set of measurable properties of the work environment, that are perceived by the people who live and work in it, and that influence their motivation and behavior. Climate characteristics that have been determined to significantly impact a companyâs bottom line are: flexibility, responsibility, standards, rewards, clarity and team commitment.
- The concepts of organizational climate and organizational culture are often used interchangeably with researchers in organizational studies treating the concepts as if they are identical. According to Patterson et al. (2005) and Schneider (2000), organizational climate and organizational culture are similar concepts in that both describe the experiences of employees and assist us in understanding psychological phenomena in particular organizations, and to provide explanations on how organizations influence behavior, attitudes and the well-being of individuals; why some organizations are more able to adapt to environmental changes and why some organizations are more successful than others (Glission & James, 2002).
- Organizational climate may be defined as the shared perceptions of and the meaning attached to the policies, practices, and procedures employees experience and the behaviors they observe getting rewarded and that are supported and expected (Ostroff et al. 2003, Schneider & Reichers 1983, Schneider et al. 2011). On the other hand, organizational culture may be defined as the shared basic assumptions, values, and beliefs that characterize a setting and are taught to newcomers as the proper way to think and feel, communicated by the myths and stories people tell about how the organization came to be the way it is as it solved problems associated with external adaptation and internal integration (Schein 2010, Trice & Beyer 1993, Zohar & Hofmann 2012).
- Organizational Climate Has its roots in social psychology discipline Organizational Culture Originates in the anthropology domain
- Organizational Climate Focus is on the individual's perceptions and cognitions which are used to comprehend and discriminate attributes of the organizationâs internal environment Organizational Culture Focus is on analyzing the underlying structure of symbols, myths and rituals which lead to shared values, norms and meanings in groups
- Organizational Climate Relatively enduring characteristic of the organization Organizational Culture Highly enduring characteristic of the organization
- Organizational Climate More shallow with regard to penetrating individualsâ consciousness and organizational realities. It is more visible and operates at the level of attitudes and values Organizational Culture Occurs at the level of attitudes and values, but also at a deeper level of assumptions. Is relatively invisible and is preconscious in individuals
- Organizational Climate Evolves more quickly and changes rapidly Organizational Culture Evolves slowly and is not easy to change
- Organizational Climate Unique characteristics of individuals are evident Organizational Culture Collective characteristics are exhibited
- Organizational climate provides a useful platform for understanding such characteristics of organizations as stability, creativity, innovation, communication and effectiveness. Organizational climate is the manifestation of the attitudes of organizational members toward the organization itself. An organization tends to attract and keep people who fit its climate, so that its patterns are perpetuated at least to some extent.
- Behavior of people can be change by changing the organizational climate. In order to bring about change in the behavior pattern of people in the organization, a change in the organizational climate will be enough. If the change in the climate is incongruent with the perceptual system of the individual in the organization, there may arise some resistance from the part of the people in the organizations first, and if the changed climate continues in the organizations. In order to maintain homeostatic condition people will start to change according to the changed climate. But when change in procedures and practices are such that it cannot be incorporated into the perception of the individual in the organization, resistance may continue and finally that may lead to distress and dissatisfaction among employees. It is easy to bring about change in the climate of the organization. But we cannot aspire for a change in the behavior of the employees as speedily as that of the organizational change.
- Organizational climate is essentially about âwhat itâs like to work hereâ. True to the climate metaphor, organizational climate is primarily about the perceptions of the climate rather than its absolute measures. Before organization-wide strategic thinking and conversation can occur, employees must 'feel' they are in a safe climate that encourages their understanding of, and involvement in, strategic conversation.
- Climate assists managers to understand the relationship between the processes and practices of the organization 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 organizationâs success.
- A high-performing climate leads to higher customer commitment, customer satisfaction and profit contribution margin. In an extensive study of manufacturing companies conducted by Williams in the UK, the relationship between climate and performance was investigated. The results showed that the majority of the dimensions were positively and significantly related to each other as well as to organizational performance with positive correlations on nearly all climate and performance measures
- Measurement of climate seeks to identify the components of both bad and good climate, both in absolute terms and perceptual terms. Generally, the areas to measure in determining whether the organizational climate is good or bad are: External environment Organizational leadership Organizational structure Management practices Working with co-workers / teams / supervisor Self - at work (your role, development, opportunities, motivation, commitment, stress) Self - outside work (how work affects your life and vice versa.)
- Climate is worthwhile to understand and measure because there are organizational and human benefits a âgoodâ climate, and powerful disadvantages of many kinds of bad climate. âBadâ Climate has been linked to: 1. Turnover 2. Stress 3. Sickness 4. Poor Performance 5. Error Rate 6. Wastage 7. Accidents âBadâ Behavior such as: 1. Sabotage 2. Absenteeism 3. Go-slow 4. Bullying
- âGoodâ Climate has been linked to desirable outcomes such as: 1. Job Satisfaction 2. Confidence in Management 3. Affective Commitment 4. Intention to Quit 5. Emotional Exhaustion 6. Faith in Organization 7. Performance âGoodâ desirable Behavior such as: 1. Risk-taking (Strategic) 2. Departure from the status â quo 3. Open Communication 4. Trust 5. Operational Freedom 6. Employee Development
- A key point to make is that a âgoodâ climate is not just one that keeps people comfortable, but one that is strategically advantageous to the organization while simultaneously bringing out the best in its members because they are in a motivational climate.
- Impact of Organizational 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 organizational climate is directly related to the efficiency and performance of the employees. The organizational climate can affect the 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.
- Evaluation of Self and Others: Organizational variables may affect behavior through evaluation of self and others. In this evaluation process both the physiological and psychological variables will be associated. Such evaluation will affect the human behavior.
- By Acting as Stimuli: Organizational factors can influence human behavior by acting as stimuli. As stimuli they influence individualâs arousal level, which is a motivational variable directing human behavior. The level of arousal will directly affect the level of activation and hence performance.
- 3. 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. If employeesâ satisfaction and job performance are to be improved, the management must modify these factors so that the employees view climate as favorable to them. Various research studies also confirm the positive relationship between organizational climate and employee performance.
- Dimensions of Organizational Climate: The important dimensions or components which collectively represent the climate of an organization are as discussed below: 1. Dominant Orientation: 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 intra group 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. Organizational Control System: The control system of the organization can be either rigid or flexible. Rigid control will lead to impersonal or bureaucratic atmosphere in the organization. There will be minimum scope for self-regulation.
- 6. Organizational Structure: The organizational structure serves the basis of inter personal 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. The 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 reward 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. 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. The above dimensions or components are not mutually exclusive, they often overlap each other. The way in which these different dimensions operate an organization indicates the underlying philosophy of the management.
- To develop a sound organizational climate is a long term proposition. Organizational climate depends upon the organizational behavior system. The organizational climate should represent the goals and philosophies of those who join together to create the organization. The type of climate that an organization seeks is contingent upon the type of people it has, the type of technology, level of education and expect actions of people in it. The following techniques are generally helpful in improving the climate of the organization: 1. Effective Communication System: There should be a two way communication in the organization so that the employees know what is going on and react to it. The manager can modify his decision on the basis of feedback received. 2. Concern for People: The management should be interested in the human resource development. It should work for the welfare of employees and an improvement in their working conditions. For developing a sound organizational climate, the management should have shown concern for the people. 3. Participative Decision Making: The management should involve the employees in decision making process, particularly those decisions which are related to goal setting and affect them. Participative decision making will make the employees committed to the organization and more coÂoperative also. 4. Change in Policies, Procedures and Rules: The organizational climate can also be changed by making changes in the policies, procedures and rules. It is a time consuming process but the changes will also be long lasting if the workers see the changes in policies, procedures and rules as favorable to them. 5. Technological Changes: Generally, the workers and employees resist any innovative changes. But where technological changes improve the working conditions of the employees, the change will be easily accepted. Better climate will be there if the management adopts innovative changes in consultation with the employees.