Psychological Climate & Organizational Effectiveness
Organizations play a significant role in socio-economic development by providing goods and services that society needs. For sustainable socio-economic development, organizations need to be productive and competitive. Organizational competitiveness largely depends on the human resources of an organization, because human resources are an essential part of organizations, multiple workplace practices and interventions try to appropriately address this need and optimize the outputs achieved by its employees.
Organizational Climate and Culture
Organizational climate and organizational culture are two varying constructs for understanding the way people experience and describe their work settings. The research interest in the two constructs has also varied over the decades (Schneider, Ehrhart & Macey, 2013). 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 (Ostroff, Kincki & Tamkins, 2003; Schneider, Erhart & Macey, 2011).
Organizational culture may be explained as the shared basic assumptions, values, and beliefs that characterize a given setting. These are the values of the company that are taught to newcomers as the proper way to think and feel (Zohar & Hofmann, 2012). Although some writers often cited the terms interchangeably (Schneider, 2000) , organizational climate and organizational culture are two terms that have multiple differences and have been discussed independently in organizational research.
Schein (2004) viewed organizational climate as less stable compared to organizational culture, which could be changed with modification of practices and procedures. He viewed organizational climate as small part of organizational culture. Therefore Organization climate can be seen as more short term and dynamic than organization culture.
Despite its heavy presence in the research, the term ‘climate’ has failed to secure a common definition. Ashforth (1995) argued that a widely shared definition of the climate construct does not exist. There is an ambiguity, which is observed about the set of dimensions/factors of Organizational Climate. The clarification of climate as an attribute of the group or organization was an important step for climate research, although some researchers do continue to study climate at the individual level (Schneider, Ehrhart & Macey, 2013).
The idea of psychological climate, as it is studied now, wasn’t comprehensively discussed until the late 1960s. In the early stages of psychological climate research it was referred to as organizational climate, though that term is now used to describe shared perceptions of organizational policies and practices, rather than individual employees’ perceptions of characteristics of the workplace (Baltes, 2001). James and Jones (1974) believed that researchers needed to differentiate between climate measured at the organizational level and at the individual level.
The term Organizational Climate has been used in organizational sciences research for more than 50 years. Further Employees psychological perception of their work environments has received magnified attention in the management discourse of 21st century (Kataria, Garg & Rastogi, 2013). Even though the term Psychological Climate had been defined as early as 1981 where individual perceptions of work environment characteristics were referred to as psychological climate (James and Sells, 1981). Research on psychological climate over the years has only added to our existing knowledge. It has been divided into three perspectives in the applied psychology research.
According to the Constructionist Perspective ‘psychological climate’ refers to individual perceptions that arise from their interaction with each other and their organizational context (Burke,Borucki & Kaufman, 2002) . Some researchers and practioners have measured employee perceptions of the work environment with respect to team Climate (Jorstad & Maznevski,2000), organizational Trust (McKnight & Webster, 2001) , safety(Flin, Mearns, O’Connor & Bryden, 2000) among others.
The General Psychology Perspective, which explicitly emphasizes the importance of personal values (e.g., clarity, support and friendly social relations) in the appraisal of work environment attributes (Anderson & West, 1996). This classic study emphasized that employee perception of their work environment involve an emotional evaluation and appraisal of the work environment as beneficial or detrimental.
A third perspective focuses on the key stakeholder groups, that are also likely to give rise to additional schemas for making sense of one’s work environment (Burke, Borucki & Hurley, 1992;Vaslow, 1999; Burke, Borucki & Kaufman, 2002). They proposed that first-order psychological climate factors reflect not only personal value-based schemas but also organizationally espoused values and practices towards other stakeholders such as customers, suppliers, contractors, and the general public.
Another perspective states that we should not be treating attitudes in isolation from the psychosocial and cultural milieu in which they are situated. This interactionist perspective is another conceptualization that has improved our understanding of psychological climate (Karanika-Murray, Michaelides, & Wood , 2017).
It is argued that the way jobs are designed is firmly rooted in the larger factors that influence a work environment and this may influence an individual’s attitudes and behavior(Johns, 2010).Morgeson, Dierdorffnand Hmurovic (2010) highlight that psychological climate and the perceptions that people have of their work is an important dimension to consider in relation to job design and employee outcomes.
Defining Psychological Climate operationally
Based on these conceptualizations and for the ease of understanding in this present discussion , psychological climate will include individual perceptions of work environment characteristics in the context of their interactions in the workplace in terms of safety, organizational trust, transfer of learning, work group cooperation and also in terms of their personal values such as role clarity, support provided by the organization, friendly social relations, leader facilitation, job challenge and lack of harmony.
Organizational Effectiveness
It is undeniable that the underlying goal of most research in organizations is to improve their effectiveness (Noruzi & Rahimi, 2010). The literature contains a variety of competing perspectives about what qualifies as Organizational Effectiveness.
Some of the major approaches in assessing Organizational Effectiveness that have been repeatedly used in existing literature include Goal Model Approach by Price, (1972); System Resource Approach by Yutchman and Seashore (1967); Internal Process Model by Likert (1967) and the Strategic Constituencies Approach by Baugher (1981).
According to Ashraf and Kadif (2012), the issue of effectiveness in organizations revolves around these four central approaches: the system resource approach, the goal approach, the strategic constituency approach and the internal process approach. These are effective and efficient approaches, which are contingent upon the type of impact that is needed. In their review of the different approaches to organizational effectiveness they explored the role of these models in the field of higher education with a special emphasis on the Cameron (1978) model, which was found to be the most effective in the field of higher education.
Additionally according to Mott (1972) three Major aspects namely productivity, adaptability and efficiency have been identified as primary determinants to evaluate organizational effectiveness and also found them to be used in various models pertaining to effectiveness. The term Productivity deals with the quality and quantity of the product and efficiency with which it is delivered.
The term adaptability is concerned with developing timely and satisfactory solutions to problems both as a pre-emptive decision and at the time of difficult situation. Finally flexibility is seen more in terms of emergency situations where a company must take appropriate action at the time of need and will go back to their regular functioning once the crisis is averted (Mott, 1972; Samantara, 2004).
Organizational effectiveness is broader and captures organizational performance plus the number of internal performance outcomes normally associated with more efficient or effective operations and other external measures that relate to considerations that are broader than those simply associated with economic valuation (either by shareholders, managers, or customers) (Richard, Devinney, Yip, & Johnson, 2009).
Defining Organizational Effectiveness operationally
After consolidating the theories mentioned above, an attempt has been made in the present discussion to gain a clearer understanding of Organizational Effectiveness. Therefore for the purpose of this discussion , Organizational Effectiveness has been referred to in terms of productivity, adaptability and efficiency of the organization and its employees.
The two variables discussed so far can therefore be summarized in the following manner:
It is also necessary to acknowledge several factors that may affect Organizational Effectiveness including employees’ Work Engagement, Job Satisfaction, Job Commitment, and Performance.
Recent studies have posited engagement as the most influential business driver of organizational success and performance (Kataria, Garg & Rastogi, 2013). Engagement of one person may transfer to others and indirectly improve composite performance of teams (Bakker, Albrecht & Leiter, 2011) which consequently helps organizations to achieve its goals. Richard, Devinney, Yip & Johnson (2009) acknowledged that any study that claims to address organizational performance must include strong theory that addresses the dimensionality of performance (by establishing which measures are appropriate to the research area) and the selection and combination of performance measures (by establishing which measures can be usefully combined and the method of doing the same). Therefore the first inquiry is about the nature of performance and the second is about the nature of measurement.
Studies have shown that work engagement is positively related to life and job satisfaction (Hakanen & Schaufeli, 2012), task performance (Bakker, Demerouti, & Verbeke, 2004), and work ability (Airila, Hakanen, Punakallio, Lusa & Luukkonen, 2012) Further Work Engagement is negatively related to absenteeism (Schaufeli, Bakker, & Van Rhenen, 2009) deviant behaviors (Shantz, Alfes, Truss, & Soane, 2013; Sulea et al., 2012) and turnover intentions (Halbesleben, 2010).
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*Please Note : This document is a part of a term paper work submitted during my MSc in Health Psychology at the University of Hyderabad to understand the relationship and associations between psychological climate and organizational effectiveness**
