Review of the Literature
The Concept of Climate
The concept of organizational climate has a long history in the organizational literature. From early writers (e.g. Litwin & Stringer, 1968) to more recent research (e.g. Ashkenasy, Wilderom & Peterson, 2000; Schneider, 1990) the concept has been used to reflect the atmosphere of work and relationships and has been regularly shown to have an impact on work-related outcomes and aspects of company performance (e.g. Patterson, Warr & West, 2004). Despite ongoing debates as to the theoretical status and measurement of organizational climate (James & Jones, 1974: Schneider, 2000) and how climate differs from the concept of organizational culture (Denison, 1996; Payne, 2000), there is a general consensus regarding the definition and underlying assumptions of organizational climate. Schneider (1985, 1990) defines climate as the shared perceptions of organizational members concerning practices, behaviours, and procedures that are rewarded and supported in the workplace. Others have viewed it as a set of concepts to understand the context of the organization, representing the norms, attitudes, feelings and behaviours prevalent at the workplace (Litwin & Stringer, 1968; Pugh & Payne, 1976; Schneider & Bartlett, 1968, 1970; Denison, 1996). In addition, research findings have emphasized the ‘intervening’ nature of organizational climate in that climate is affected by a set of input variables on the one hand, and influences the outcomes and performance variables on the other (Payne, 1971; Dastmalchian, 1986). A majority of studies drawing on this concept have used a generalized approach rather than relating the notion of climate to a particular set of organizational activities or issues. As Schneider & Reichers (1983) have pointed out, “to speak of organizational climate per se without attaching it to a referent is meaningless” (p.21). They called for the inclusion of the idea of a climate measure and concept that has a focus in that we should be looking at climate for “something”. This “something” might involve issues such as a climate for safety (Zohar, 2000; Zohar & Luria, 2005), climate for sexual harassment (Fitzgerald, Drasgow, Hulin, Gelfand & Magley, 1997), climate for justice (Liao & Rupp, 2005), climate for well-being (Burke, Borucki & Hurley, 1992), climate for service (Schneider, 1980; Schneider, White & Paul, 1998; Schneider and Bowen, 1995), or an industrial relations climate (Dastmalchian et al, 1989, 1991). The principle is that organizational climate as a concept has many facets and that researching it needs to bring a greater level of focus to the specific facets being studied. As in the case of personality and attitude literatures, say Schneider, Bowen, Ehrhart & Holcombe (2000), unless the predictor variable is conceptually and operationally linked to the criterion variable, the probability of a relationship between them is low. The same logic applies to climate. That is, unless the concept and measure of climate is based on “something” of interest, the relationship between it and the other key organizational variables can be expected to be modest at best. Using this logic we now move more directly to the notion of human resources (HR) climate. We are suggesting in this proposal the organization’s human resource practices are another key area where the issue-focused notion of climate can and should be applied.
Human Resource Management and Organizational Performance
An organization’s HR practices refer to those activities that relate to recruitment, development and management of its employees (Wall & Wood, 2005). Over the past decade a link has been established between a specific set of HR practices and organizational performance. HR may be linked to organizational performance because effective practices may develop employee commitment to their jobs and elicit increased employee effort. Different terms are used to describe the effective set of practices including ‘high commitment management’ (Walton, 1985), ‘high involvement management’ (Lawler, 1986) and ‘high performance work systems’ (Appelbaum et al., 2000). High performance work systems (Appelbaum et al. 2000), for example, accord a central position to employee involvement and greater job control (Batt & Appelbaum, 1995; Berg, 1999) providing workers with the opportunity for involvement, greater job satisfaction, and the development of mutual trust between employees and managers. These positive experiences of high performance work systems produce discretionary effort from employees which improves firm performance due to employee satisfaction, perceived fairness, trust and belief that managers are delivering on their promises (Guest 1999, 2003, Sturges et al., 2005). Notwithstanding evidence of links between HR and performance, the ways in which HR practices can improve organizational performance are not well understood. Wall & Wood (2005) suggest three broad improvements that can be made in the HR performance research: (1) more reliable/valid measures of HR practices and using multiple informants; (2) larger samples with better response rates; and (3) using longitudinal research designs. Our study takes these suggestions into account. In addition, we aim to develop theory to explain the link between HR practices and organizational and individual performance. Viewing climate as an intervening variable, we seek to develop, conceptually and empirically, the notion of HR climate as a missing link in the study of human resource management and its affect on performance. That is, our position is that HR practices and policies lead to organizational and employee outcomes through the creation and development of an appropriate HR climate in organization.
- Appelbaum, E., Bailey, T., Berg, P. & Kalleberg, A. (2000). Manufacturing Advantage: Why High-Performance Work Systems Pay Off. Ithaca: Cornell University/ILR Press.
- Ashkenasy, N. Wilderom C. and Peterson M. (2000). Handbook of Organizational Culture and Climate, London: Sage.
- Batt, R. & Appelbaum, E. (1995). Worker participation in diverse settings: Does the form affect the outcome and if so, who benefits? British Journal of Industrial Relations, 33(3): 331-378.
- Berg, P. (1999). The effects of high performance work practices on job satisfaction in the United States steel industry. Relations Industrielles, 54(1):111-35.
- Bolman, L., & Deal, T. (2003). Reframing Organizations: Artistry, Choice, and Leadership (3rd Edit). San Francisco Jossey-Bass.
- Bowen, D., & Ostroff, C. (2004). Understanding HRM-form performance linkages: The role of the strength of the HRM system. Academy of Management Review, 29(2), 203-221.
- Burke, M.J. Borucki, C.C. & Hurley, A.E (1992). Reconceptualising psychological climate in a retail service environment: A multiple-stakeholder perspective, Journal of Applied Psychology, 77, 5: 717-729.
- Combs, J., Liu, Y., Hall, A., & Ketchen, D. (2006). How much do high performance work practices matter? A meta-analysis of their effects on organizational performance. Personnel Psychology, 59(3):501–528.
- Dastmalchian, A. (2008). Industrial relations climate in Blyton, P., Bacon, N. Fiorito, J and Heery, E. (Eds). Sage handbook of industrial relations, London: Sage.
- Dastmalchian, A. (1986) .Environmental characteristics and organizational climate: An exploratory study. Journal of Management Studies, 23:609-633.
- Dastmalchian, A. Blyton, P. & Adamson, R. (1989). Industrial relations climate: Testing a construct. Journal of Occupational Psychology, 62: 21-32.
- Dastmalchian, A. Blyton, P. & Adamson, R. (1991). The climate of workplace relations, London: Rutledge.
- Denison, D.R. (1996). What is the difference between organizational culture and organizational climate? A native’s point of view on a decade of paradigm war. Academy of Management Review, 21:619-654.
- Dillman, D. (1978). Mail and telephone surveys: The total design method. New York: JohnWiley & Sons.
- Fitzgerald, L.F. Drasgow, F. Hulin, C.L. Gelfand, M.J. & Magley, V.J. (1997). Antecedents and consequences of sexual harassment in organizations: A test of an integrated model. Journal of Applied Psychology, 82, 4:578-598.
- Guest, D. (1999). Human resource management - The workers’ verdict. Human Resource Management Journal, 9(3): 5-25.
- Guest, D., Michie, J., Conway, N., & Sheehan, M. (2003). Human resource management,corporate performance in the UK. British Journal of Industrial Relations, 41(2): 291-314.
- James, L.R. & Jones, A.P. (1974).Organizational climate: A review of theory and research.Psychological Bulletin, 84, 1:96-112.
- Lawler, E. (1986) High-involvement Management. San Francisco: Jossey-Bass.
- Liao, H. & Rupp, D.E. (2005). The impact of justice climate and justice orientation on workoutcomes: a cross-level multifoci framework. Journal of Applied Psychology, 90(2):242-56
- Litwin, G. & Stringer, R. (1968). Motivation and organizational climate. Boston: Harvard University Press.
- Micelli, M. & Near, J. (1985). Characteristics of organizational climate and perceived wrongdoing associated with whistleblowing. Personnel Psychology, 38, 525-544.
- Payne, R. (1971). Organizational climate: The concept and some research findings. Prakseologia39/40, ROK, 143-158.
- Payne, R.L. (2000). Climate and culture: How close can they get? In Ashkanasy, N.M.,Wilderom, C.P.M. & Peterson, M.F. (Eds.) Handbook of organizational culture and climate, London: Sage, 163-176.
- Patterson, M. Warr, P. West, M. (2004). Organizational climate and company productivity: The role of employee affect and employee level. Journal of Occupational and OrganizationalPsychology, 77:193-216.
- Pugh, D. S. & Payne, R.L. (1976). Organizational behaviour in its context: The Aston program III. Farnborough: Saxton House.
- Schneider, B. (1980). The service organization: Climate is social. Organizational Dynamics, 9, 52-65.
- Schneider, B. (1990). Organizational Climate and Cultures. San Francisco: Jossey-Bass.
- Schneider, B. (1985). Organizational behaviour. Annual Review of Psychology, 36: 573-611.
- Schneider, B. & Bartlett, J. (1968). Individual differences and organizational climate I: The research plan and questionnaire development. Personnel Psychology, 21, 323-333.
- Schneider, B., & Bowen, D.E. (1995). Winning the service game. Boston: Harvard Business School Press.
- Schneider, B. & Reichers, A. (1983). On the etiology of climates. Personnel Psychology, 36, 19-39.
- Schneider, B., White, S. & Paul, M.C. (1998). Linking service climate and customer perceptions of service quality: Test of a causal model, Journal of Applied Psychology, 83, 150-63.
- Schneider, B. (2000). The psychological life of organizations, in Ashkanasy, N.M. et al. Handbook of organizational culture and climate, London: Sage, pp.xvii-xxii.
- Schneider, B. Bowen, D.E., Ehrhart, M.G. & K.M. Holcombe (2000). Climate for service: evolution of a construct, in Ashkanasy et al. Handbook of organizational culture and climate, London: Sage, pp 21-36.
- Schneider, B., While S.S. & Paul, M.C. (1998). Linking service climate and customer perceptions of service quality: Test of a causal model. Journal of Applied Psychology, 83,2: 150-163.
- Sturges, J., Conway, N., & Guest, D. (2005). Managing the career deal: The psychological contract as a framework for understanding career management, organizational commitment and work behaviour. Journal of Organizational Behaviour, 26(7): 821-838.
- Ulrich, D. (1997). Human resource champions: The next agenda for adding value and delivering results. Boston: Harvard Business School Press.
- Wall, T.D. & Wood, S. J. (2005). The romance of human resource management and business performance, and the case for big science. Human Relations, 58(4): 429-62.
- Walton, R. (1985). From control to commitment in the workplace. Harvard Business Review, March-April: 77-84.
- Yin, R. (2009). Case study research: Design and methods. San Francisco: Sage.
- Zohar, D. (1980). Safety climate in industrial organizations: Theoretical and applied implications. Journal of Applied Psychology, 65, 96-102.
- Zohar, D. (2000). A group-level model of safety climate: Testing the effect of group climate on microaccidents in manufacturing jobs, Journal of Applied Psychology, 85,587-596.
- Zohar, D. & Luria, G. (2005). A multilevel model of safety climate: Cross-level relationships between organization and group-level climates, Journal of Applied Psychology, 90, 616-628.