Organizational climate is a set of properties of the work environment, perceived directly or indirectly by employees, that is assumed to be a major force in influencing employee behavior. (Organizational Behavior & Management, 8th Ed., Ivancevich, Konopaske, and Matteson)
A Queensland University of Technology view on organizational climate...
The concept of organizational climate has been assessed by various authors, of which many of them published their own definition of organisational climate. For those interested in understanding organizational climate, it is important to make some distinctions. First, climate and culture are both important aspects of the overall context, environment or situation. Culture tends to be shared by all or most members of some social group; is something that older members usually try to pass on to younger members; shapes behavior and structures perceptions of the world. Cultures are often studied and understood at a national level, such as the American or French culture. Culture includes deeply held values, beliefs and assumptions, symbols, heroes and heroines, and rituals. Culture can be examined at an organizational level as well. The main distinction between organizational and national culture is that people can choose to join a place of work, but are usually born into a national culture.
Organizational cultures are generally deep and stable. Climate, on the other hand, is often defined as the recurring patterns of behavior, attitudes and feelings that characterize life in the organization (Isaksen & Ekvall, 2007). Although culture and climate are related, climate often proves easier to assess and change. At an individual level of analysis the concept is called individual psychological climate. These individual perceptions are often aggregated or collected for analysis and understanding at the team or group level, or the divisional, functional, or overall organizational level.
Organizational climate, however, proves to be hard to define. There are two especially intractable and related difficulties: how to define climate and how to measure it effectively on different levels of analysis. Furthermore there are several approaches to the concept of climate, of which two in particular have received substantial patronage: the cognitive schema approach and the shared perception approach.
The first approach regards the concept of climate as an individual perception and cognitive representation of the work environment. From this perspective climate assessments should be conducted at an individual level.
The second approach emphasizes the importance of shared perceptions as underpinning the notion of climate (Anderson, & West, 1998; Mathisen & Einarsen 2004). Reichers and Schneider (1990) define organisational climate as "the shared perception of the way things are around here" (p. 22). It is important to realize that from these two approaches, there is no “best” approach and they actually have a great deal of overlap.
Organisational Climate (sometimes known as Corporate Climate) is the process of quantifying the “culture” of an organisation.
Researchers Hart, Griffin, Wearing & Cooper (1996) have pursued the shared perception model of Organisational Climate. Their model identifies the variables which moderate an organisation’s ability to mobilise its workforce in order to achieve business goals and maximise performance.
One of the major users of this model includes many departments of the Queensland State Government (Australia). These departments use this model of Climate to survey staff to identify and measure those aspects of a workplace which impact on: stress, morale, quality of worklife, wellbeing, employee engagement, absenteeism/presenteeism, turnover and performance.
While an organisation and its leaders cannot remove every stressor in the daily life of its employees, Organisational Climate studies have identified a number of behaviours of leaders which have a significant impact on stress and morale. For instance, one Queensland state government employer, Queensland Transport has found that increasing managers’ awareness of these behaviours has improved quality of work life employees and the ability of QT’s to deliver its organisational goals.
Theories of Cognitive and Neuropsychology and Emotional Intelligence provide additional scientific rationale for why leaders should improve stress and morale in the workplace to achieve maximum performance. Climate surveys can provide concrete evidence of how this works in action.
Organisational Climate surveying enables the impact of HR strategies to be evaluated to create HR Return on Investment (HRROI) calculations. This data has been found to be highly effective in changing the perspective of people-based initiatives as being an “investment” rather than a “cost” and transforming HR into a “mission-critical strategic partner” from its perception of “personnel administration”.
A number of studies by Dr Dennis Rose and colleagues (2001, 2002, 2004) have found a very strong link between Organisational Climate and employee reactions such as stress levels, absenteeism and commitment and participation. A study by Heidi Bushell (2007) has found that Hart, Griffin et al.’s (1996) Organisational Climate model accounts for at least 16% single-day sick leave and 10% separation rates in one organisation. Other studies support the links between organizational climate and many other factors such as employee retention, job satisfaction, well-being, and readiness for creativity, innovation and change. Hunter, Bedell and Mumford (2007) have reviewed numerous approaches to climate assessment for creativity. They found that those climate studies that were based on well-developed, standardized instruments produced far higher effect sizes than did studies that were based on locally developed measures.