Let’s look at this situation: Flexible work hours? Check. Competitive pay? Check. Work autonomy? Check. You have tick-marked all boxes on the road to a successful organization. Yet, you may be facing high turnover and low retention. Why?
The answer could simply be – Organizational Climate.
What exactly is Organizational Climate?
Organizational climate, simply put, is the feel of the organization. It is the environment or the atmosphere of the organization. What is it like to work there? What are the job conditions, management decisions, and how they affect the employees’ mood? How does the leadership interact? If you’re looking for answers to these questions, you are looking at Organizational Climate. It is the way employees perceive the environment of the organization. Organizational climate is popularly referred to as Corporate Climate.
Organizational climate is like a routine health checkup. If done regularly, it can help solve problems when they are manageable. Procrastinating can lead to further complications and difficult situations to resolve.
Okay, so we already have organizational culture. How is this different?
Organizational Culture vs Organizational Climate:
The differences, although technical, are critical. While organizational climate is a part of a company’s corporate culture, it’s a more quantifiable factor than culture. Thus, culture is a broader concept that encompasses much of employees’ experiences at work. In contrast, organizational climate is narrow but focused on employees’ shared perceptions about the organization’s policies, practices, procedures, and payment system. Thus, culture is deeper and more layered, potentially outside the day-to-day experiences of employees. Whereas climate can be easily captured and is based on employee’s daily reports of what’s happening around them at their workplace.
Thus, Organizational Climate is lighter and more superficial. It’s the mood or temperature of an organization — both things that fluctuate and vary based on surrounding conditions. It is a by-product of the more profound culture, but more flexible.
The most significant advantage of organizational climate lies in its quantifiable nature. With the right tools and the right degree of awareness and flexibility, you can assess the organizational environment of your company and pinpoint areas that are important for improvement and enact the necessary changes.
Benefits of Organizational Climate
1. Quantifiable: This variable, unlike culture, is measurable and easily quantifiable. For example, a climate survey related to the reward system offered by your company can give you a clear picture of the overall satisfaction (or lack of) your employees have with the kind of reward allocated and its distribution.
2. Perception: This variable studies one of the most game-changing constructs- Perception. At the end of the day, it all boils down to how you as a person or employee perceive another. Perception acts as a lens through which we view reality.
Similarly, organizational climate reflects how the employee truly feels about their workplace. You might think your company is performing at a very high level in terms of employee satisfaction. On the ground floor, however, that picture might look very different. Organizational climate, ironically, is a reality check. Just as in any relationship, if you perceive happier, you will commit better.
3. Structural: Organizational Culture is a layered construct with many confounding interpersonal variables. However, Organizational Climate is narrower and more directly related to the structure of the company. Thus, it makes pain points easier to identify and implement. It’s an important place to review whether your organizational climate reflects the culture you aim to foster.
4. Check: Organizational Climate is a light, easy check on the company’s moods and environment. It may deal a heavy hand (e.g., respect, communication, perception, etc.), but it is relatively undemanding.
5. Greater Good: You can find the roots of this variable on some essential metrics such as job satisfaction, performance, and motivation. It’s simple. Your workplace may have a desirable pay scale and perks, but if the mood is tense, hostile, and disrespectful, your immediate instinct is psychological protection (Read: Herzberg’s Two Factor theory).
6. Organizational Commitment: Organizational climate can be directly related to Organizational commitment. If the environment allows employees to feel heard, valued, and secure, they are willing to work 2x. Organizational climate has a strong significance with a commitment to work, thus increasing the competitive advantage.
7. Retention: A research shows 63.3% of companies say retaining employees is harder than hiring them. While you may chase after customer loyalty, don’t forget about employee loyalty. Someone happy with their work environment is, of course, more likely to stay. That happy feeling can (arguably) be akin to getting on a holiday on Monday. Who would willingly let go of a holiday on Monday?
Similarly, happier employees reduce turnover and absenteeism by 41%. The better climate allows for positive word of mouth (read: free advertising). Instead of you hunting for employees, employees hunt to be with you.
8. Last but not least, Branding- Happy employees in a smooth environment result in positive word of mouth, and this is still the best way to get your company’s name out there. Once that happy little ball starts rolling, more and better quality job seekers will come knocking at your door. It’s one step closer to that coveted 5.0 Glassdoor rating.
Investing in this awareness:
Organizational climate is a mirror, reflecting a company from its employees’ point of view. Thus, the best methodology can be:
Pulsing → Evaluation → Actionable metrics → Changes → Feedback.
Pulsing can be highly beneficial as they are short, frequent, and metric-oriented. As the organizational climate is all about mood, it is dynamic and ever-changing. Thus, traditional surveys which are bi-yearly may not capture essential data. Pulsing can be highly beneficial to help tailor the climate pulse towards any number of metrics, a small metric (planning meal for potluck) to a more significant metric such as communication and commitment.
At Springworks, we use EngageWith Pulse which tracks metrics closely in sync with organizational climate to reflect a true score.
What does EngageWith measure in Organizational Climate?
1. Respect: A primal need, it reflects how well workers feel individually respected in the workplace.
2. Communication: It is the foundational stone to any successful enterprise between two or more human beings. This metric focuses on communication between co-workers, managers. Communication for goal/task clarity and rationale.
3. Organizational perception: The most authentic reflection of organizational climate, this metric tracks the belief employees have in their organization and capabilities. The best part about this metric is the importance it places on the inherent emotions of employees.
4. Leadership: In this pulse, leadership is measured at a superficial level. Ease of appointment, encouragement, willingness, and leadership contribution in shaping the work environment are measured.
5. Reward system: It measures what and how fairly (Distributive & Procedural justice) the organization’s reward system.
6. Ad-hoc: Ad hoc questions can be as simple as (referring to seniors as Sir/ Ma’am) or confidence in the company’s mission, vision, and plan. (Research shows only 4 in 10 people know what their company stands for and less than 50% feel connected to their organization’s mission). Although seemingly trivial, these pulse questions can be a building block to creating a more significant change. An impactful change.
Smart companies listen to what they’re being told about their organizational climate and take actions accordingly. Actions with 10x returns.
Thus, Organizational Climate can help make or break your organization. No matter how well designed, an organization is only as good as the people who live and breathe in it. To win in the marketplace, you must win at the workplace. So, are you ready to win?