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Organizational Climate: understand what its importance is

Renan Araújo

people analytics

Simply put, organizational climate is the perception of an organization’s employees about the company’s processes, policies, and practices. Understanding how the climate is in your company contributes significantly to retaining talent and reducing absenteeism.

Some time ago, most companies were concerned with maintaining a highly productive team, without worrying about the health and well-being of their professionals. However, these issues have been gaining more and more importance within the organizations, so that the directors and other leaders also pay attention to the organizational climate.

To get an idea about the need for this knowledge for the company, in the year 2019 the WHO included Burnout Syndrome, characterized by physical and psychological exhaustion in the professional environment, in the list of work-related diseases.

With that in mind, we have prepared this content for you to understand a little more about what the organizational climate is, what the advantages of worrying about this issue are, and useful tips on how to improve it in your company. Read on to learn more!

What is Organizational Climate?

As we explained, the organizational climate is the perception of an organization’s employees about the company’s processes, policies, and practices. If the Organizational Climate is negative, consequently there will be a reduction in productivity, and the satisfaction of the professionals will be reduced.

Organizational climate is a construct, that is, a concept created from other concepts. So when we talk about climate, we necessarily talk about its components. According to the scientific literature on the subject, organizational climate is an amalgamation of the perceptions of male and female employees regarding various aspects of their experience, such as:

  • Compensation & Benefits
  • Professional growth opportunities
  • Fairness in merits and promotions
  • Work equipment (software, office, computers, etc.)
  • Teamwork
  • Direct leadership.

What factors directly affect the Organizational Climate of a business?

Below we have selected the main factors that affect the Organizational Climate of a company. Check it out!

Interpersonal relationships

When we talk about interpersonal relationships, we are referring to the professional’s day-to-day relationships – both with colleagues and with leadership.

In this sense, it is necessary to take into consideration that the attitudes of managers tend to have a direct impact on climate. After all, it will reflect on the way the men and women being led react to different kinds of problems, as well as lead and guide them whenever necessary.

To get an idea, according to a Gallup survey, relationships with managers are responsible for up to 75% of layoffs, which proves the impact this has on the day to day running of a business

HR Policies

What HR policies are implemented in your company? When we talk about this topic, we are referring to everything from the recruitment and selection process to the benefits and termination policies.

Let’s understand it: if the hiring of new employees does not take into consideration the culture of your business and how well that person is suited to that profile, there is a risk of hiring individuals who do not identify with the routine of your organization. Consequently, their sense of responsibility for their demands may be reduced, as well as their job satisfaction.

Business infrastructure

The structure of a business can also affect the organizational climate, both positively and negatively. If your management does not provide the conditions for the professionals to work properly, chances are that the quality of the demands will be impacted, which harms the motivation of the employees as a whole.

How to improve a company’s organizational climate?

Thinking about bringing constant improvement to the organizational climate, check out the tips we selected that can be applied in your company!

1. Create an environment of trust between leaders and followers

We have even mentioned about the importance of having engaged leaders in your company to improve the organizational climate. In this sense, it is essential to create an environment of trust between the management and the professionals in your business, in a way that encourages maximum involvement among staff members in general.

The practice of one-on-ones, for example. This is a periodic meeting between the manager and his subordinate, a practice that has a positive impact on both the company and the staff.

In his book The Hard Thing About Hard Things, Ben Horowitz states that one of the great things about this habit is that it enables a more accurate flow of information from the bottom up in a business. According to the author, some information is only shared in a secure and private environment. When there are problems and risks involving the company and these points rise freely, there is the possibility to act proactively.

In addition, one-on-ones also count as differentiators:

  • improvement in the flow of information in the company as a whole;
  • greater engagement of staff;
  • higher levels of trust between the teams and their leaders.

Some daily attitudes by the leadership also contribute to a positive organizational climate:

  • sincerity and empathy on the part of the leadership;
  • transparency on the part of the company’s top management;
  • integrity between what is preached and what is practiced;
  • fulfillment of individual responsibilities.

2. Allow your professionals to be valued

What could staff members say about your company? Besides the leaders having this understanding through the one-on-ones, it is also important to know how people feel about the work routine and even how their personal life has influenced their demands. In this way, there is the possibility of working in a more adequate way the dialog with team members, according to their particularities.

Furthermore, have tools that allow the whole company to celebrate the achievements of their colleagues. Whether it is individual recognition or recognition for the whole team, praise is always positive, especially when the work performed has generated great impact for the organization and also for the customers.

Another important point of praise is the opportunity to reinforce the company’s values. Whenever they are practiced by the teams, it is possible to recall the topics of the organizational culture that were perceived in this work, which contributes to the entire organization also absorbing these values.  

3. Propose training and capacity building

Training and capacity building contribute directly to a company’s good results. When we talk about this topic, we are not just referring to hiring lectures and courses from big names in the market. The professionals themselves can pass on their knowledge to others, contributing to the learning of the entire organization.

After all, different areas perform very different functions. The way a certain team works can contribute to the day-to-day work of another team, which increases both productivity and motivation.

And what is more, whenever a person takes a course that provides teams with important insights, there is the possibility of passing on these learnings, which consequently allows for the optimization of professional qualities.

Not only does training contribute to the organizational climate, but it also makes it possible:

  • personal development of the entire team;
  • increased productivity;
  • improvement in the employees’ confidence in performing their functions;
  • reduction in turnover;
  • increased company credibility.

4. Encourage diversity

Relying on diversity in companies should be a priority in all organizations. According to a research done by Harvard Business, in organizations where there is this attention, conflicts are reduced by up to 50% if compared to brands that do not invest in the topic.

Furthermore, in a study by management consulting firm McKinsey and Company, those with racial and ethnic diversity are 35% more likely to have above-average earnings in their industry.

In another survey done by Vagas.com with about 2000 professionals, for 70% of the participants the diversity issue is ahead of issues such as promotions, incentives, and infrastructure. Due to all these numbers, the need to foster diversity for improvements in the organizational climate becomes clear.

5. Show the importance of organizational climate to all leaders

Once again, we come across the topic about leadership. They have great influence when it comes to improving the organizational climate and, for this reason, it is necessary that managers understand the need to invest in this issue.

If necessary, hold training sessions on climate for your leaders, so that they are immersed in the subject and can develop strategies, together with the company as a whole, to improve this issue.

What are the indicators of organizational climate in a company?

Now that you know effective strategies on how to improve the organizational climate, it is time to explain some of the indicators that can be evaluated. Let’s understand them!

1. Absenteeism

Absenteeism can be considered one of the oldest problems in organizations. If in your company there is a high number of professionals regularly missing or arriving late, it is a sign that the organizational climate is negative. How does absenteeism impact a company? Let’s understand it:

  • weakening of the organizational culture;
  • drop in productivity;
  • dissatisfaction of teams;
  • issues with health and motivation;
  • increase in costs;

Among the main causes identified for the increase in absenteeism, illness and health problems, lack of motivation and engagement, lack of structure, and low expectations regarding professional development can be considered as the main ones – and all these points are impacted when an organizational climate does not go well.

2. Turnover

If turnover is on the rise among your professionals, there is a need to check what points in your business influence this rate. Among the reasons that can influence it, we highlight:

  • physical and psychological wear and tear among staff members;
  • differentiated treatment for teams;
  • lack of opportunity;
  • little autonomy;
  • conflicts with the leadership;
  • absence of a solid organizational culture.

When there is a good organizational climate, people are encouraged to stay at work. In 2016, a survey conducted by the Intersyndical Department of Statistics and Socioeconomic Studies identified a 24% voluntary turnover rate among companies in Brazil. When we compare this rate with the 150 best companies to work for in the country, the difference is significant: there, the rate is 7%.

3. Lack of feedback

Feedback is essential for a solid, high-performance culture. For this reason, there is a need for the company to continuously work on this issue in its business, so that leaders and team members are encouraged to convey a clear message to make the most of the benefits that this practice brings.

In a study carried out by Gallup, there is a connection of the existence of feedback with the professional development of team members. In such study, it was pointed out that 44% of millennials who have frequent meetings with their leaders declare themselves engaged. Moreover, according to the 2018 HR Panorama in Brazil, 78% of people believe that it contributes to professional development. 

4. Productivity

Increasing productivity without affecting team members’ satisfaction is one of the main goals of any management. When there are good results in this sense, it is a sign that the organizational climate is positive, since there is greater proactivity from the professionals in seeking innovation and improvement in their activities.

What is an Organizational Climate Survey and why should one adopt it?

As we have seen, it is fundamental to know the organizational climate. But how can you measure the feelings that your staff has about the company? Through the Organizational Climate Survey, there is the possibility to understand what the work environment is like and the effect it has on the members of your team. Thus, it is possible to identify their perception and draw improvement plans, based on the results achieved.

For the Survey objective to be achieved, the ideal scenario is that it is frequently conducted in your team. However, the analysis of the points highlighted by the professionals must be done strategically, so that the improvements observed can bring about improvement in the climate of the entire company. Consequently, there will be increased satisfaction, reduction in turnover, drop in absenteeism, among other gains presented over this content.

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