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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.

References

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