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Organisational culture and climate

Editor's Note to Readers

Welcome to the sixth edition of Human Capital Matters for 2015—the digest for leaders and practitioners with an interest in human capital and organisational capability. Human Capital Matters seeks to provide APS leaders and practitioners with easy access to the issues of contemporary importance in public and private sector human capital and organisational capability. It has been designed to provide interested readers with a monthly guide to the national and international ideas that are shaping human capital thinking and practice. The inclusion of articles is aimed at stimulating creative and innovative thinking and does not in any way imply that the Australian Public Service Commission endorses service providers or policies.

Thank you to those who took the time to provide feedback on earlier editions of Human Capital Matters. Comments, suggestions or questions regarding this publication are always welcome and should be addressed to: humancapitalmatters [at] apsc.gov.au. Readers can also subscribe to the mailing list through this email address.

This edition focuses on organisational culture and climate, terms used frequently by academics and practitioners when discussing influences that have a significant impact on organisations. Both terms imply that there are aspects of the organisation that are widely understood and shared among its members. While the two terms are sometimes used interchangeably they have been seen as separate and different in most of the early literature[1].  As far back as 2001 however, in an overview of the literature, Ashkanasy and Jackson[2] concluded that culture and climate are 'overlapping and complementary constructs, amenable to multiple research methods that cut across disciplinary boundaries'.

For the purposes on this publication, it is reasonable to conceptualise culture like personality—more stable over time—and climate as the mood(s) of the organisation which can be more easily measured and monitored. Climate is usually measured in terms of what an organisation does—practices, policies, procedures and routines. Culture is described by the organisational values and history which drive the practices and policies.

For example, psychosocial safety climate (PSC), what the organisation does to protect (or otherwise) employees' psychological safety, has become an area of intense interest given the increasing direct and indirect costs associated with work-related stress. Work-related stress has been defined to mean prolonged exposure to psychosocial hazards—aspects of the work environment, work design and organisational management—which cause harm. It has been called the 'slow accident' effect of work, the causes of which, some argue, are readily identifiable. PSC reflects the practices and policies in an organisation that are designed to reduce the risk of the "slow accident".

The State of the Service Employee Census for 2015 measures a number of aspects of climate in the APS, specifically psychosocial safety climate and attendance climate. The Psycho-social Safety Climate 12 (PSC 12) was developed as part of the Australian Workplace Barometer  (details are provided in this edition) and is available for benchmarking purposes. The APS Attendance Climate tool was developed by the APSC based on work by Johns and Xie in 1998 and 2000 (abstract only is available on-line).

This edition of Human Capital Matters will provide, firstly, a quick description of what organisational dimensions are seen to make up climate or culture. It will then move to papers in which measurement and the practical implications of measuring workplace climate have been discussed.

The articles are:

The first article is the Kennedy Group's succinct description of the differences between culture and climate. It provides details about the five widely-recognised components of organisational culture: values, beliefs, myths, traditions, and norms. The article reaffirms the commonly-held assertion that climate is the more easily measured dimension of the work environment and that leadership is the most important determinant of organisational climate. Other measurable aspects of climate are reported and include: organisational structure; and, perceptions about accountability, behavior, communication, rewards, and reciprocity of respect.

The second article by Dollard and her colleagues for Safe Work Australia reports on psychosocial safety climate (PSC) and worker health in Australia. It begins with the 'standout finding' that 'depression costs Australian employers approximately AUD$8 billion per annum as a result of sickness absence and presenteeism and AUD$693 million per annum of this is due to job strain and bullying'(italics added).

The third article by Law, Dollard, Tuckey and Dormann reports on relationships between perceived PSC and bullying and harassment, psychological health and, in turn, on work engagement.

The fourth article by Kanten and Ulker starts with the idea that the overall 'health' of an organisation can be assessed by measuring employees' perceptions of their work environment or the climate of the organisation.  They report climate can be measured through the aspects based on Litwin and Stringer's work published in 1968 (and which are restated in the work of the Kennedy Group), noting that while there is not unanimous agreement about these dimensions, they are widely known and commonly used climate dimensions. What is interesting about this article is that it uses western ideas about organisational climate and health in a cross-cultural setting in Turkey.

The fifth article, by Johns begins to hone the reading to more practical implications for organisations: measurement of climate and specifically for the APS, measurement of attendance climate. Johns refers to attendance dynamics which include a number of 'climate' considerations such as employees' perceptions about group norms and managers' behaviours. He provides a review of the organisational psychology literature that has informed the development of the APSC attendance climate scales.

Kennedy Group Executive Strategies (2015), Culture vs Climate

This brief article (four pages) identifies aspects of an organisation that contribute to organisational culture and climate. It describes the characteristics of culture—values, beliefs, myths, traditions and norms—and reinforces the idea that culture is 'almost impossible to measure and even harder for people to articulate'. The difficulties associated with changing culture to effect organisational change are underlined though the importance of addressing organisational culture is underlined.

Organisational climate is also described in terms of leadership, organisational structure, historical forces, standards of accountability, standards of behaviour, communication, rewards, trust, commitment, vision and strategies and 'connectiveness'.

The article concludes with 13 ways to achieve the desired organisational culture and climate. It also highlights the importance of leadership in affecting climate and thereby changing corporate culture.

The Kennedy Group established in 1984 and operating from the USA is an international consulting firm and produces brief, on-line booklets about organisational change issues.

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Dollard, M., Bailey, T., McLinton, S., Richards, P., McTern, W., Taylor, A. & Bond, S. 2012 The Australian Workplace Barometer: Report on psychosocial safety climate and worker health in Australia, Safe Work Australia

The authors assert that understanding how workplace psychosocial risk factors interact and contribute to worker wellbeing and productivity can be obtained through systematic measurement and analysis, also known as surveillance. Systematic surveillance is seen as the best way, or 'best practice', to inform intervention and ultimately prevent injury. Accordingly, the Australian Workplace Barometer (AWB) was developed in order to set national benchmarks and provide evidence for the development of standards, policy and interventions.

The authors report that PSC measures an organisation's priorities and commitment in relation to the protection of worker psychological health and wellbeing. In 'high PSC' workplaces, managers will be cognisant of risk factors and will help shape jobs where demands are manageable and resources are adequate. PSC is seen to moderate the negative effects of psychosocial hazards on employees' health and productivity.

The research concluded that a 10% increase in PSC would lead to a 4.5% decrease in bullying, a 4% decrease in demands, a 4% decrease in exhaustion, a 3% decrease in psychological health problems, 8% increase in resources and a 6% increase in worker engagement.

Dollard and her colleagues identify national and state-based, high risk industries in which high job demands and low job resources were linked to health outcomes. They concluded that there was significant variation among the states and territories and advised that interventions needed to be targeted and specific to the organisation.

A particular high risk group were workers between the ages of 25-34 in that they showed the poorest psychological health. This was thought to be related to competing work and family demands among other factors such as low levels of skills discretion (low control and autonomy in the workplace). The most serious concern was reported however in regard to levels of bullying and harassment. Australian levels— at 6.8% according to the AWB—were seen to be substantially higher than international rates.

Professor Dollard and associates were associated with the University of South Australia at the time of this report and completed the work on the AWB under the auspices of Safe Work Australia

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Law, R., Dollard, M.F., Tuckey, M.R & Dormann, C 2011 Psych-social safety climate as a lead indicator of workplace bullying and harassment, job resources, psychological health and employee engagement, Accident Analysis and Prevention

The authors in their abstract for this article assert that:

Psychosocial safety climate (PSC) is defined as shared perceptions of organisational policies, practices and procedures for the protection of worker psychological health and safety that stem largely from management practices (underlined emphasis added). PSC theory ... proposes that organisational level PSC determines work conditions and subsequently, psychological health problems and work engagement.

PSC is conceptualised by the authors as management's commitment to workers' psychological health and the priority management gives to safeguarding workers' health as opposed to production demands.

In a survey of 30 organisations and 220 employees it was shown that organisational PSC was associated negatively with health impairment through bullying and harassment and was positively associated with motivation through work rewards and engagement. In organisations with low PSC workers reported more workplace bullying and fewer resources in the form of supervisor support, procedural justice and job rewards. Bullying and harassment were shown to be the most important factors linking PSC to psychological health problems even when other factors were controlled.

The authors concluded that psychosocial safety climate is an efficient target for organisational interventions.

Law, Dollard and Tuckey, the first three authors, were associated with the Work & Stress Research Group, Centre for Applied Psychological Research, School of Psychology, University of South Australia, South Australia at the time of this report. Christian Dormann was associated with the Johannes Gutenberg-University, Mantz, Germany

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Kanten, P & Ulker, ER (2013) The Effect of Organizational Climate on Counterproductive Behaviours: An empirical study on the employees of manufacturing enterprises. The Macrotheme Review 2(4), Summer

In their research involving 204 employees across two energy enterprises, Kanten and Ulker found a significant relationship between counterproductive behaviours and aspects of organisational climate, specifically perceptions of 'reward'. They started from the premise that employees who perceive a supportive organisational climate are more likely to display persistence, innovation and helpfulness when faced with unexpected problems. They also stated that, conversely, when employees perceive that the work environment is not supportive they are likely to exhibit negative or counterproductive behaviours. Counterproductive behaviours were defined as unproductive, voluntary activities that directly harm organisational functions or property to reduce effectiveness, violate organisational norms and damage organisational goals and the well-being of its members. Counterproductive behaviours were seen to contribute to increasing costs and decreasing commitment, organisational citizenship and productivity.

The range of counterproductive workplace behaviours has been contentious and Kanten and Ulker determined that the typology developed by Robinson and Bennett[3] in 1995 allowed for more structure and insight. This typology divides behaviour into interpersonal—e.g., verbal abuse, intimidation, gossiping— and organisational counterproductive behaviours—e.g., stealing, withholding effort, tardiness, absenteeism.

From their research Kanten and Ulker conclude that if employees perceive organisational support they are likely to feel committed to the organisation and avoid counterproductive behaviours. Employees are likely to undertake additional work and act in innovative and creative ways to achieve organisational goals. A significant relationship was not found between counterproductive behaviour and risk or conflict. The authors also reported that reward and structure dimensions do not affect counterproductive behaviours but that counterproductive behaviours affect reward and structure dimensions; that is, employees are more likely to face negative organisational policies when they exhibit counterproductive behaviours.

Pelin Kanten School of Tourism and Hotel Management at Mehmet Akif Ersay University, Burdur, Turkey . Funda Er Ulker Hayrabolu Vocational School, Tekirdag, Turkey

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Johns, G. 2009, Absenteeism or Presenteeism? Attendance dynamics and employee well-being The Oxford Handbook of Organizational Well-being, Chapter 2 Susan Cartwright and Cary L. Cooper (Eds), Oxford University Press, (pp. 7-23)

Johns examines the relationships between employee absenteeism, presenteeism and employee well-being. He defines absenteeism as failing to report for work as expected. Presenteeism is defined as reporting for work when one is ill and there is a decrement in productivity. The interplay between these behaviours is referred to as attendance dynamics and Johns presents a substantive chapter on the interplay of employee well-being and attendance dynamics. The article takes a broad view of well-being, encompassing physical, mental and emotional well-being and assumes that a positively evaluated work experience (which is one component of organisational climate) is conducive to employee well-being.

Johns notes that job satisfaction has been a traditional indicator of well-being and is negatively related to absenteeism. There is growing evidence however that feelings of injustice and related experiences that threaten well-being are better predictors of absenteeism. Absence has been shown to be higher in response to direct measures of inequity, breaches of psychological contract, salary caps, failure to gain promotion and when organisational support is perceived to be low. It is noteworthy that absenteeism increases during periods of downsizing or restructuring.

One of the most important developments of the past decades has been the recognition of how social context affects attendance. Absenteeism has been shown to be highly susceptible to normative influence, mostly centred around natural workgroups. Workplace units can be shown to have distinctive absence cultures and absenteeism is particularly likely to manifest among individuals and social units characterised by poor social integration—when social ties and organisational support are considered weak and identification with the organisation is low.

Johns notes that 'a good attendance management system is one that facilitates organizational effectiveness while fostering employee well-being'. For example, while it is important to set an expectation of good attendance, it is detrimental to employee well-being to claim illness if they are really caring for family. He reports that this precludes dialogue about attendance issues and defaults to a medical model of absence which is not necessarily factual. This is, as Johns sees it, a common error in attendance management systems alongside 'draconian' management policy such as punishment for lateness and excessive concern for the number of absences as opposed to total time lost. Rather than encourage presenteeism, Johns suggests that 'family friendly' policies for absence should be pursued. 'The overall goal is not to absolutely minimise absence but to manage attendance in light of organisational, (medical) and family realities' (p. 21).

Beyond such policies, job designs that allow a degree of autonomy and control over the work experience appear to stem absenteeism, particularly if a job design allows employees to adjust their work when ill.

Johns makes a special mention about the impact of organisational restructuring on job design. Organisational change can sometimes produce poor job designs that reduce autonomy and control, promote role overload and ignore adequate training for new or changed responsibilities. These after-effects are often related to increased absenteeism.

The role of the supervisor or manager does not go unremarked either. It has been found that absence rates among staff are positively correlated with the absence rates of the managers. This supports the idea that setting a group norm about attendance is an important aspect of attendance management and that managers/supervisors may serve as models of attendance. It has been reported that groups with good relationships among staff and with managers were less likely to manifest absences. Johns suggests then that setting an expectation about attendance, modelling attendance behaviour and ensuring effective relationships among team members is likely to produce 'superior benefits' in the form of attendance.  Such a workplace climate has the additional benefit of placing the manager in a good position to deal with 'fair exceptions' in regard to attendance. This is seen by Johns as 'the hallmark of a good system of attendance accountability' (Johns, p. 22)

Finally, much of this understanding about attendance dynamics informed the development of an Attendance Climate Scale for the Australian Public Service Commission (APSC)[4]. This measure includes four components:

  • Individual employee's perceptions of the management of attendance
  • Management perceptions of their ability to manage attendance
  • Attendance climate questions adapted from work done in 2000 by Xie and Johns
  • Individual and workgroup norms for absence behaviours adapted from work by Johns and Xie, 1998

The APSC Attendance Climate Scale has been tested and the properties of the scale found to be adequate measures of employees' and managers' perceptions of absence management and attendance climate and norms. The scale will form part of the evaluation of the APS Absence Management Toolkit and will be available for wider use in the APS.

Gary Johns, Department of Management, John Molson School of Business, Concordia University, Quebec, Canada

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[1] 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 wars' Academy of Management Review, vol 21, no. 3, pp 619-654

[2] Ashkanasy N.M. & Jackson C.R.A  2001, 'Organizational Culture and Climate' in N. Anderson, D.S. Ones, H.K. Sinangil & C. Viswesvar (eds) Handbook of Industrial, Work & Organizational Psychology, vol 2, Sage Publications, London

[3] Robinson SL & Bennett RJ 1995 A Typology of Deviant Workplace Behaviours: A multidimensional scaling study. The Academy of Management Journal, Vol 38, No 2 pp 555-572

[4] Australian Public Service Commission 2015 RN 29-15 Measuring Attendance Climate in the APS, Commonwealth of Australia, Canberra