Organizational Climate

The term organizational climate has been used in many different ways to refer to a wide variety of constructs. In recent years some consensus about what precisely should be included in the construct—and what should not be included in the construct—has begun to emerge. Research interest in climate has remained high, despite the variety of conceptualizations of the construct, because climate is generally seen as related to a variety of important organizational outcomes, including productivity (both individual and organizational), satisfaction, and turnover. More recently, climate has come to be seen as predictive of specific organizational outcomes, depending on what aspect of climate is being assessed. Thus climate continues to be seen as organizationally important, but the specific outcomes of interest seen to be affected by climate have shifted over time.

Initially, researchers used climate to refer to individual employee perceptions of more immediate aspects of an employee’s work environment (e.g., supervision, work group characteristics, and job or task characteristics), and the climate measures that were developed and widely used reflected this orientation. However, general measures of climate began to incorporate aspects of leadership, group interaction and cohesion, job satisfaction, and other constructs, leading to questions of the uniqueness and utility of the climate construct. To counteract this tendency, researchers strategically focused the climate construct on those particular types of climates that may emerge in each particular organization. Although a recent meta-analysis by J. Z. Carr and her colleagues highlights the more molar, or broad-brush, approach to organizational climate, a more targeted approach has become dominant in the last several years.

Benjamin Schneider has long been one of the primary researchers in the area of organizational climate, and variations of the operational definition he has used are the dominant in the literature today. Specifically, Schneider has argued that organizational climate should be defined as the policies, practices, and procedures that are rewarded, supported, and expected in an organization in regard to a specific organizational domain, such as safety, innovation, customer service, and ethics. This basic definition has come to be the most commonly used conceptualization of the climate construct in the last several years.

There are two critical implications of this definition. First, by focusing on policies, practices, and procedures that are rewarded, supported, and expected, the definition implies that organizational climate is a shared perspective among organization members, rather than an individual perception. This focus on within-unit agreement places organizational climate in the category of compositional models that David Chan (1998) would call direct consensus models, in that the meaning of the group-level construct is based on the agreement (or consensus) among the individual units (group members or employees). Second, by focusing on specific organizational domains, the definition implies that an organization may have multiple climates operating simultaneously and may have climates that are more active in one area of the organization than in another; for example, a climate for innovation may be most salient in an R&D (research and development) division, whereas a climate for customer service may be most salient in a sales division within a single organization.

This definition is also useful because it helps clarify what organizational climate is not. Organizational climate does not refer to the personal values that are held by members of an organization, or shared by organization members—in general, shared values are under the umbrella of organizational culture (see Organizational Culture). Organizational climate also does not refer to individual and idiosyncratic perceptions of life within the organization; in general, these perceptions fall under the umbrella of psychological climate.

In the remainder of this entry, we first focus briefly on three examples of specific types of climates: climate for service, climate for safety, and ethical climate. We then discuss the issue of degree of agreement about climate perceptions, which is known as climate strength; this leads to a discussion of when it is possible to say that a climate does or does not exist.

Organizational Climate for Service

Research on organizational climate for service has flourished and considers both employee and customer perceptions of an organization’s policies, practices, and procedures that are rewarded, supported, and expected for quality service in the organization. For employees, climate for service represents their experiences of the organization’s emphasis on service quality. For customers, climate for service is the perceived amount of excellent service received from the organization. Research on climate for service has found links between these dual perceptions of employees’ climate for service and customers’ satisfaction and evaluations of the quality of service. This research is an example of linkage research because customer service perceptions are linked with important organizational outcomes, such as customer retention.

Climate for service research builds from the theory that employees emphasize service behavior to the degree that it is rewarded, supported, and expected by their employing organization. Customers of organizations that have a positive or high climate for service come to have higher satisfaction with the service they receive from the organization because of their contact and interaction with various employees, who provide consistently high levels of service. Research on the boundary conditions of this effect has begun, and initial findings suggest that higher frequency of contact between employees and customers is related to a stronger relationship between service climate and customer satisfaction. Another moderator of the climate for service and customer satisfaction relationship is the proximity of the organizational target, such as bank branches versus bank as a whole, to customers.

Organizational Climate for Safety

Climate for safety has also received considerable research attention. This aspect of climate refers to employee perceptions of an organization’s policies, practices, and procedures regarding safety that are rewarded, supported, and expected from employees. Several researchers have documented a consistent relationship between a positive safety climate and reduced injury rates. Dov Zohar (2003), a leading theorist in this area of research, has stressed the need to consider perceptions of actual safety practices as opposed to the safety policies and practices espoused by supervisors and top management, because the behaviors that are said to be expected and rewarded are often not the behaviors that are actually expected and rewarded. Interestingly, transformational or constructive leadership is shown to relate to lower injury rate; and this relationship is moderated by safety climate, conceptualized as perceptions of actual safety practices rather than more formalized safety policies.

Ethical Organizational Climate

Given the many well-publicized corporate scandals of the last several years, it is hardly surprising to see that there is a sizable stream of research examining organizational ethics and ethical behavior from within an organizational climate framework. From this perspective (to use Bart Victor and John Cullen’s [1987] seminal definition), ethical climate can be thought of as shared perceptions among group members regarding what constitutes ethically correct behavior and how ethical issues should be handled within an organization. This definition highlights the fact that ethical climate is not focused on what is right or wrong but is instead focused on the things that organization members perceive the organization to see as ethical. Thus employees might agree that when confronted with an ethical issue at work, they would be rewarded and supported by the organization if they engaged in behavior that they personally believed to be unethical.

Although ethical climate is a relatively new research area, researchers have identified several antecedents of ethical climate. Among other things, ethical climate has been shown to be affected by gender, age, ethical education, personality traits, and stage of organizational career. Victor and Cullen (1987), who are largely responsible for starting the research focus in this area, hypothesized that social norms, organizational form, and various firm-specific factors would be the dominant antecedents. Marcus Dickson, D. Brent Smith, Michael Grojean, and Mark Ehrhart (2001) addressed the literature on each of these points rather extensively. To date, there is more theory than data about the degree to which a strong organizational ethical climate is associated with individual and organizational ethical behavior and decision making.

There are many other organizational climate facets that have been investigated in the literature, including climates for sexual harassment, innovation and creativity, justice, and well-being. Of course, the climate construct could be applied to an almost unlimited range of organizational topics for which shared perceptions by group members are important.

Organizational Climate Strength

Recently, researchers have begun to focus on the importance of climate strength, which has been operationally defined as the within-group variability in member perceptions of the climate. When agreement is high, climate is strong. (Climate strength can also be conceptualized as variability in within-group perceptions, with greater variability indicating lesser strength.) Although there is not a lot of research to date that explicitly addresses climate strength, much published research has found that climate strength moderates the effects of climate itself on various out-comes of interest. For example, Jason Colquitt and colleagues (2001) found that procedural justice climate in teams predicted team effectiveness, and that the effect was greater in teams with stronger climates. Dickson and colleagues recently found that strong climates were more likely to be found in organizations with clearly distinct climates (e.g., highly mechanistic or highly organic), and that strength was typically much lower in organizations where the climate was more ambiguous. We expect to see research in this area continue to grow, because the moderating effect of climate strength will be useful in better understanding the direct effects (or lack thereof) of climate itself. Additionally, Schneider and colleagues have pointed out that there are clear implications for leadership to be found here in terms of the importance of consistent behavior in a positive direction to create maximal benefit from organizational climate.

When does climate exist?

One debate in the study of organizational climate is whether there are times when there is no climate or whether there is always a climate, even if it is weak. This is much the same argument as that occurring in the literature on organizational culture; but given the more quantitative orientation of the climate literature over time (compared with the culture literature), the issue can become especially critical here.

Some researchers argue that unless there is some predetermined level of agreement or variability among group members, there is no climate because there is little or no evidence of a shared perspective among organizational members. This argument can be couched in terms from Chan’s (1998) framework of composition models, mentioned earlier, because climate has most typically been conceptualized as a direct consensus model. In such a model, climate is considered to be the typical, or most common, response from the members of a group, provided that there is some level of within-group agreement to justify treating the mean as a group-level variable. In other words, if there is insufficient agreement (assessed statistically), then there is no sharedness in the perceptions, and thus no climate. Researchers taking this approach have sometimes used a criterion of an rwg of .70 or greater (or some other statistical cutoff point), although as Harrison Trice and Janice Beyer (1993) note regarding culture strength, there is no clear answer on how to determine whether or not a climate exists. Because there is no clear point at which climate can be said to exist, other researchers have taken the perspective that climate is always present but may in many cases be weak.

This question is of practical importance when determining how to classify the units within a data set. For example, suppose that a researcher is investigating safety climate and has data from 100 organizations, including 10 organizations with rwg results on the climate measure of less than .70. From one perspective, the 10 organizations showing little agreement on the safety climate measure would be dropped from the sample as having no climate, and of the remaining 90 organizations, the ones with rwg results close to .70 would be considered to have a weak climate. From the alternative perspective, all 100 organizations would remain in the sample, and those with the lowest levels of agreement would be considered to have the weakest climates. At present, consensus on this issue has yet to clearly emerge. However, the approach of limiting the sample to only those organizations with a predetermined level of within-unit agreement is the more conservative approach, because that limitation serves to restrict the range on the strength variable.

Conclusion

Organizations tend to have as many specific climates as strategic directions, which makes organizational climate a relevant concept for organizations to consider. As Schneider (1990) notes, once a strategic direction or focus is identified for the organization, the organizational climate regarding that strategic focus can be assessed via employees. Employees’ assessment of the organization’s relevant policies, practices, and procedures that support the strategic focus in the organization may serve as a measure of alignment. The strategic focus of the organization needs to be clearly and consistently represented in the organization’s policies, practices, and procedures. Should an assessment of the organizational climate reveal that a strategic direction of interest is not perceived in organizational practices, then policies, practices, and procedures in the organization may need to be redesigned to better align with the strategy of interest.

References:

  1. Ashkanasy, N. M., Wilderom, C. P. M., & Peterson, M. F. (Eds.). (2000). Handbook of organizational culture and climate. Thousand Oaks, CA: Sage.
  2. Carr, J. Z., Schmidt, A. M., Ford, J. K., & DeShon, R. P. (2003). Climate perceptions matter: A meta-analytic path analysis relating molar climate, cognitive and affective states, and individual level work outcomes. Journal of Applied Psychology, 88, 605-619.
  3. Chan, D. (1998). Functional relations among constructs in the same content domain at different levels of analysis: A typology of composition models. Journal of Applied Psychology, 83, 234-246.
  4. Dickson, M. W., Smith, D. B., Grojean, M., & Ehrhart, M. (2001). An organizational climate regarding ethics: The outcome of leader values and the practices that reflect them. Leadership Quarterly, 12, 197-217.
  5. Schneider, B. (Ed.). (1990). Organizational climate and culture. San Francisco: Jossey-Bass.
  6. Victor, B., & Cullen, J. (1987). A theory and measure of ethical climate in organizations. In W. C. Frederick (Ed.), Research in corporate social performance and policy: Empirical studies of business ethics and values (pp. 51-71). Greenwich, CT: JAI Press.
  7. Zohar, D. (2003). Safety climate: Conceptual and measurement issues. In J. Campbell Quick & L. E. Tetrick (Eds.), Handbook of occupational health psychology. Washington, DC: American Psychological Association.

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