GUIDE 2024

What is Organizational Climate?

Have you ever wondered why your company is the way it is? If you have been in the same industry but with different organizations, you will notice obvious and subtle differences in the workspace air. This is called organizational climate. If your goal is to promote a strong organizational climate, then read on.

Organizational Climate

Organizational climate is how employees perceive and describe their working environment. This includes how they think of their jobs, practices, and procedures. It also involves what behaviors are encouraged and rewarded.

You can think of this climate as your company’s personality, with unique characteristics and behavior. This makes every organization unique! It affects how employees feel and behave.

The organizational climate is reflected in these ways:

  • Policies: How to perform processes
  • Practices: How to follow practices
  • Expectations: What is expected behavior and what is discouraged
  • Incentives and Rewards: What benefits and perks are given

It is possible that there are many climates within an organization, as organizational climate depends on the department or unit. But you need to look at the organizational climate from a system perspective. The differences within departments need integration to identify the overall or dominant organizational climate.

Organizational Culture or Climate?

Before we proceed further, we need to clarify the difference between organizational culture and organizational climate. Sometimes, culture and climate are used interchangeably!

The organizational culture refers to the overall image of the company. This is reflected in the company’s mission and vision, in its branding and logo, its dress codes, and even in the technologies it uses. It is a big-picture view of the organization. The organizational climate is part of the company culture.

On the other hand, the organizational climate reflects the perceptions of the employees about the culture. It presents a micro-level perspective, compared to the big picture of organizational culture.

According to Bowditch and Buono, “Organizational culture is connected with the nature of beliefs and expectations about organizational life, while climate is an indicator of whether these beliefs and expectations are being fulfilled.”


Why you must learn about organizational climate? Why do you need to learn the shared perceptions of employees about the company? Two reasons stand out:

First, measuring the organizational climate allows you to understand your employees. This can help management design a positive organizational climate to help employees achieve the organization’s goals and align with its strategies.

Second, a positive climate will improve how employees work together and their loyalty to the organization. A positive organizational climate is tied to organizational behavior and organizational commitment.

Types of Climate

It is possible to have different climates in a single organization. To improve the overall organizational climate, you need to identify what is dominant.

These are four prominent types of organizational climates.

  • People-oriented climate: This organizational climate emphasizes the importance of positive interpersonal relations between employees.
  • Rule-oriented climate: This organizational climate prioritizes following the organizational policies and company values.
  • Innovation-oriented climate: This organizational climate focuses on producing new ways of working to foster creative and innovative results.
  • Goal-oriented climate: This is a result-driven organizational climate, focusing on improving and refining its systems to achieve its business goals.

The differences within departments in your company depend on the leadership style and leadership strategies employed by your managers. Leadership is central to forming and maintaining organizational climate.

Characteristics of Organizational Climate

There are distinct characteristics of your organizational climate:

  1. The organizational climate is the general and shared perception of the employees about the organization.
  2. The organizational climate is abstract and intangible. It is challenging to explain and measure.
  3. The organizational climate is the company’s unique and distinct atmosphere, as compared to other organizations.
  4. It is impossible to create an organizational climate overnight. It takes time to shape or improve organizational climate.
  5. The organizational climate is multi-dimensional, involving various dimensions at work.

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Organizational Climate Dimensions

Before we discuss the dimensions of organizational climate, there are various studies that dive deep into this concept. To simplify things, we will just look at them in two ways: the categories and common components of organizational climate.

The various organizational climate dimensions are classified into three categories:

  • Structural dimensions, which relate to the organizational structure;
  • Interactive dimensions, which relate to factors affecting how members interact with one another; and
  • Perceptual dimensions relate to factors influencing an individual’s perception of the organizational climate.

Now let’s look at the common components or dimensions that affect organizational climate.

1. Dominant Orientation

The dominant orientation is a crucial component that determines organizational climate. It is a major concern in the workplace. For example, an organizational climate influenced by control will have a climate known to adhere to the company’s established rules. If the dominant orientation is excellence, then business performance will influence organizational climate.

2. Organizational Structure

Another major component is organizational structure. It indicates direct reporting and responsibilities between employees. This is the foundation of interpersonal relationships within the work environment.

How authority is spread will determine how organizational members participate. A decentralized structure will encourage decision-making and participation. This can lead to motivated employees. However, a centralized structure often discourages participation.

3. Organizational Control System

Related to the organizational structure is the organizational control system. Systems are either flexible or rigid. A rigid control will have limited leeway for self-regulation. This leads to an impersonal or bureaucratic organizational climate.

4. Individual Autonomy

When there is flexible control, individual workers are given sufficient authority, freedom, and power to work. The autonomy of organizational members will lighten the burden of higher-level executives and can lead to efficient operations.

5. Interpersonal Relationships

This component refers to how informal groups are formed and operated in the workplace. The practices of these informal groups can lead in two different directions: either promote organizational goals or displace them.

6. Conflict Management

Interpersonal relationships can lead to interpersonal conflicts. It’s unavoidable. How conflicts are managed will affect the organizational climate. Effective conflict management will lead to an atmosphere of cooperation between employees. However, if conflicts are not managed, an atmosphere of distrust and suspicion erupts.

7. Communication

Another component is the organizational communication system. How information is shared, who shares it, and the type of information affect the organizational climate. A healthy system means that employees have opportunities to express their new ideas, their honest feedback, and their recommendations.

8. Rewards and Punishments

The rewards and punishments system is another important dimension of organizational climate. A reward system related to performance and productivity produces a healthy, competitive climate among employees.

If the system is fair, employees tend to work hard in the hopes of incentives and promotions. However, if there is bias in distributing the rewards, employees cannot perform their best.

9. Relations or Task-Oriented Management

The leadership style of management also affects organizational climate. In a relation-oriented approach, leadership is focused on developing and supporting the employees. This results in a considerate climate and positive employee behavior.

A task-oriented approach means that employees must show desired results or face repercussions. In the long term, this can lead to low employee morale.

10. Risk Taking

When employees feel free to try out new ideas without hesitation, it leads to a climate that welcomes innovative ideas.

You must remember that these dimensions often overlap with each other. How they operate within an organization is indicative of the current climate. It reflects the organization’s philosophy about its employees and its leadership.

How to Measure Organizational Climate

The organizational climate depends on the experiences and perceptions of your employees. You can conduct regular climate surveys. It is like taking a pulse, as you are assessing the current well-being of the organization. You can do it weekly through a short survey, with 1-2 questions or a Likert scale where employees rate their experience.

Like any survey, pulse surveys have their drawbacks. For example, if it’s administered during a set schedule, it could happen after an unfavorable event (bad meeting, a conflict, working on a tight deadline, and others.). But this is a normal part of the organizational climate. It should lead the leadership to examine and rectify these types of events to improve the organizational climate.

Another way to measure organizational climate is by having discussions with employees. Employee experience is a good indicator of climate. Ask them about their experience with the brand, the mission, and their work. This method is hard track but quite effective.

Five Steps to Improve Organizational Climate

So how can we improve the organizational climate? It’s an ongoing process but here are five critical activities to get started.

1. Identify the Current Organizational Climate

Assessing the current climate is the first step. A climate survey will help you see which organizational culture initiatives affect your climate. Understand what motivates your employees. Understand what also discourages or demotivates them.

Take action from the survey results. You can also dig deeper during individual or team meetings. Ensure psychological safety during these meetings. Employees should feel safe in sharing their concerns without fear of negative repercussions.

2. Equip Your Leadership

A positive organizational culture and organizational climate depend upon strong leaders. Many organizations have well-defined business goals and practices, but they are not reflected by their employees. Leadership can provide a good example and pattern.

You must also help your leaders discern what dominant climate should define their teams. For example, a rule-oriented climate is more apt for those working in legal and finance. While a goal-oriented climate is more relevant for sales or a people-oriented climate for those working in customer service.

3. Improve the Work Environment

Assess your current work environment. Does it promote productivity? Does it stimulate creativity? Do your employees have everything they need to perform their jobs well? A conducive work environment has a positive effect on the climate.

Another consideration is work-life balance. Think of how you can provide opportunities and spaces for your employees to do their work with flexibility. With the COVID pandemic and the increasing numbers of burnout, the status quo on how people work needs reviewing.

4. Strengthen Employee Autonomy and Recognition

Each employee should know how they bring value and contribute to the business goals. You need to give them a positive psychological climate, where they make their own decisions, take risks for innovations, and feel supported along the way. Freedom to do their work will lead to better job satisfaction and motivation.

Also, employees need recognition and reward for their contributions. This recognition must come from the entire organization. Recognition has many forms: awards, incentives, gifts, and others. To share an example, you may start awarding an “employee of the month” to those who go beyond expectations.

5. Provide Psychological Safety

Employees need an inclusive environment that brings a sense of belongingness. This kind of safety is built on mutual respect. Again, this is where your managers are critical to the organizational climate.

Managers and leaders should promote inclusion and teamwork, where every member is supported. Each member must also feel safe to challenge and provide feedback, where the aim is to achieve business goals.


A positive organizational culture with a positive organizational climate is key to good organizational performance. You need to start taking note of how employees experience and perceive the company. I hope this is the start of your journey to improving your organizational climate. If you need more help, we are looking forward to discussing it with you.



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