Saddaf Saleem

 FINAL PROJECT “ORGANIZATION CLIMATE AND ITS RELATIONSHIP WITH EMPLOYEES MOTIVATION” A REPORT SUBMITTED TO THE DEPARTMENT OF MANAGEMENT SCIENCE, VIRTUAL UNIVERSITY OF PAKISTAN IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF MASTER IN BUSINESS ADMINISTRATION Submitted by mc- SADDAF SALEEM ALTAF DEPARTMENT OF MANAGEMENT SCIENCE, VIRTUAL UNIVERSITY OF PAKISTANs ACKNOWLEDGEMENT First of all, I am grateful to Almighty Allah for the completion of this Project, I also thankful to my father and brother for their expert, sincere and valuable guidance and encouragement extended to me. Last but not least the employees who responded to my Questionnaire Without them I could not have complete this project 1 ABSTRACT 1)BACKGROUND OF THE STUDY The favorable organizational climate is essential for employee’s behavior that influences the productivity. Studies in the organizational psychology have shown that organizational climate and employee commitment are major factors and must to each other. 2)PURPOSE AND METHODOLOGY OF THE RESEARCH The purpose of this study was to investigate the relationship between organizational climate and response of employees towards it. The study was conducted on a commercial bank employees and Likert scale method was used for collecting the data. 150 employees were selected for the sample of the study. The simple random sampling method was used. The standardized questionnaire of organizational climate and organizational commitment was distributed in the employees of various branches of a commercial bank. 3)FINDINGS OF THE RESEARCH For all commercial banks State Bank of Pakistan specifies the rules and parameters which are very stringent. Therefore, commercial banks like other financial institutions have set rules and procedures that are followed in letter and spirit. The study shows this aspect clearly. Similarly supervisory staff is normally helpful in financial institutions to ensure clarity on limitations. Pressure to produce shows that employees are all the time under pressure and have to work very long hours. The staff works long hours without any reward or incentive like over time etc. 2 4)RECOMMENDATIONS & ACTION PLAN Our recommendations therefore, are incentives for employees who work long hours and supervisory staff to be more accommodating to induce motivation in employees. The results of the study indicate that organizational climate has a significant positive relationship with employees and their organizational commitment. Climate dimensions used in this study were autonomy, integration, supervisory support, formalization & tradition, innovation & flexibility, clarity of organizational goals, performance feedback, pressure to produce and quality. These dimensions have significant positive relationship with employee’s commitment. 3 Table of contents Acknowledgement Abstract 1. Chapter 1 Introduction…………………………………………page# 1.1 Background ………………………………………….6 1.2 Objectives…………………………………………….7 1.3 Significance…………………………………………..7 2. Chapter 2 Literature Review………………………………………..8 3. Chapter 3 Research methodology…………………………………..9 3.1 Types of data………………………………………….9 3.2 Data collection source………………………………..9 3.3 Data collection tool/instructions………………… …9 3.4 Subjects/ participants………………………………...10 3.5 Data processing analysis techniques and ……………10 Interpretation 4. Chapter 4 Data Analysis……………………………………………12 4.1 Summary………………………………………………13 5. Chapter 5 Conclusion, Recommendations, limitation……………..16 5.1 Conclusion………………………………………… 16 5.2 Recommendation………………………………… . 16 5.3 Limitations………………………………………… 16 References…………………………………………………………….17 Appendix/Appendixes………………………………………………...17 - 4 Specimen List of Illustration List of illustration 1. Table………………………………………….page 12 2. Table………………………………………….page 17 5 SECTION 1 CHAPTER 1: INTRODUCTION Organizations are more concerned about maintaining an effective organizational climate now because of fast growth and competition. Understanding the concept of climate become more important as organizations grew and more awareness spread regarding this concept. “Organizational climate defined as the way in which organizational members perceive and characterize their environment in an attitudinal and value based manner, it has been asserted as an important and influential aspect of satisfaction and retention, as well as institutional effectiveness and success in high education There has been a lot of research on the topic of organizational climate and its impacts; organizational climate is synonymous with corporate environment. Researchers suggest that organizational culture is very closely related to organizational climate. The main aim or objective of research was to study the effect of environment or surroundings of employees and also to study the effect of different variable on their behavior. 1.1: Background Organization climate has a rich history and implementations in both industrial and organizational setups. Kurt Lewin was one the first researcher who studied about this concept. Organization climate studies took the stage in late 1970s and the focus was to integrate the climate research into broader spectrum. 6 1.2: OBJECTIVES Our main objective for this research is, to; To discover the relationship between organizational climate and employee motivation and organizational commitment, whether it is positive or negative. To understand the dimension of organizational climate and its impact on a better organizational commitment and employee motivation. To make this research available so that it can benefit all those who seek to maintain a healthy organizational climate which support the employees in decision making, professional relationship, maintain work life balance etc. 1.3: SIGNIFICANCE There must be a great interest in exploring out the impacts of organizational climate on the company’s success because of the relationship of organizational phenomena such a job satisfaction, job performance, leadership and the quality of work. The main point is to explore the effects of both positive/supportive and negative/strict organizational climate on employee motivation and organizational commitment to conclude, if employee perception of the organizational climate influences the level of motivation and commitment. Today organizations are facing more challenges than ever before. These challenges are not limited but influence all organizations or industries. The motivation for this research is particularly to check of how the organizations foster a supportive organizational climate. 7 Chapter 2 LITERATURE REVIEW Organizational climate is mechanism for understanding the problems and challenges of organizations. It is described as a set of perceptions which individuals have about different work aspects in the organization. (Evans, 1996) Organizational climate is a broad concept of different factors which make up an organization. The climate or the culture maybe considered as the value system of the company. It’s determined by values of the top management or leadership of the company. It sets up a system which trickles down to the different levels of management and takes its root in the company mind set. (Tierney)(Lenz, 1999) A work environment which illustrates that what each employee is valued and makes an important contribution to the organization by utilizing the talent to its potential. (Berry, 1999) Andrew Halpin and Don croft (Halpin and croft, 1963) constructed the climate description questionnaire through a research which was conducted in a school. The purpose of the research was to discuss organizational climate and the factors affecting it. As a result, they were able to discover 6 types of organizational climate: 1) Open climate : It is the climate in which people generally worked well with each other. They had friendly relationship with one another and the head of departments. 2) Autonomous climate: Where the employees have control over their objectives, the plan of action, self governance and initiative, generally the morale of such people tends to be higher as they are independent in thinking thus problem solving become better. 3) Controlled climate: In this environment, less independence is given to the individuals and more control is implied. The individuals are goal oriented and mainly concerned about accomplishment. The individuals are hold what to do rather than using own instinct because of more control implemented by the top management feelings for others are not part of this type of climate. 4) Familiar climate: In this the climate is friendly and more social oriented i.e. social connectivity and needs of the people are mainly considered. Main concern isn’t the productivity of the people that’s why do not work up to their full potential. 5) Paternal climate: In this employees are not motivated as the top management acts paternally thus the behavior was insincere as well. 8 6) Closed climate: This is climate where there is neither concern for high achievement nor any social connectivity. As a result the employees did not work well together and the top management was ineffective in its decisions and managing the people. Chapter 3 RESEARCH METHODOLOGY 3.1 Type of Research/Data This research proposal is “Quantitative” this research is in detailed descriptive form. “Quantitative research involving formal, objective information about the world, with mathematical quantification, it can be used to describe test relationship and to examine cause and effect relationship” 3.2 Data collection source . Primary research is new research, carried out to answer specific issues or questions; it can involve questionnaires, surveys or interviews with individuals or small groups. 3.3 Data collection tool Tool which is used for this research is “Questionnaire”. The scale which I choose is “Likert scale”. Questionnaire is use for data collection, it is easy to administer and collection of data. 9 3.4 Subject/participants The target population which I choose is middle level employees. Employees of the organization are the unit of analysis. The sample size is 150 and chooses non-probability sampling for this research. 3.5 Data processing analysis techniques and interpretation A Survey is conducted with the help of questionnaire, the quality can be assured as, this proposal have complete detail of organizational climate and its effects on employees and how its effects on employees. To substantiate my study I prepared and distributed a questionnaire relating to dimensions/factors of organizational climate or working environment. The results of the study indicate that organizational climate has its significant positive relationship with employees and their organizational commitment. Questions on following organizational climate dimensions were given to various employees of a bank in Likert scale form and answers were received. Autonomy Autonomy means how much freedom employees have to take decisions independently with or without taking prior permission. Financial institutions like banks have strict financial controls and strict rules and parameters are set by State Bank of Pakistan. Integration Integration is how well the various department of organization interact and collaborate with each other. Can the needed information freely exchanged within department or prior permissions are required before doing so. Supervisory Support Supervisory support has a great role to play in working conditions. Confident, friendly but firm and accommodative supervisor has good effect on his subordinates. He creates a cheerful working environment therefore, achieves good results from staff working under him. Formalization and tradition Traditionally banking is customer orientated organization. All efforts are targeted to attract customers to bring money in their bank. To achieve this customers are given facilities while staying within the stipulated rules of State Bank of Pakistan. 10 Innovation and flexibility Management is responsible for making changes, bring in new ideas to capture the bigger market’s share and enhance the bank’s capital. Most of the times their approach puts employees under lot of stress but it leaves no choice to employees. Clarity of organization goal Employees mostly know the goals set by management and are aware of objectives. To achieve organization’s target smaller targets are set for employees and apart from their routine work employees have to achieve targets set for them. Performance feed back Employees performance is always under scrutiny and they are told of any discrepancies in their output. Their performance is measured with the targets given to them and finally achieved within the timeframe. Pressure to produce Banking is a real tough job these days. Gone are days when it was lucrative and much wanted. Employees remain under lot of pressure from the work load. Apart from their normal day to day working they are given other targets to achieve within a specified time. Quality Banks expect their employees to produce quality work. Lot of emphasis is laid on this aspect. Quality work only can bring good name and business in the bank and for matter in any organization. No organization can afford sub standard work. 11 Chapter 4 DATA ANALYSIS 4.1Summary QUESTIONAIR ON ORGANIZATIONAL CLIMATE   ORGANIZATIONAL CLIMATE DIMENSIONS R E S P O N S E S AUTONOMY Strong Disagree Disagree Neutral Agree Strong Agree Management let peple make their own decisions much of the time 52 (34.67%) 75(50%) 15 (10%) 5 (3.33%) 3 (2%) Managemet trust people to take work related decisions without getting permission first 50 (33.33%) 45 (30%) 45 (30%) 10 (6.67%) 0 (0%) Management involve people when decisions are made that affect them 15(10%) 75(50%) 35 (23.33%) 15(10%) 10(6.67%) Percentage Mean 117 (26%-%) 95(21.11%) 30 (20%) 13(2.89%) Total Mean 58.5 - INTEGRATION     People in different departments are prepared to share information 10 (6.66%) 15 (10%) 25 (16.67%) 75 (50%) 25 (16.67%) collaboration between departments is very effective 3(2%) 17 (11.33%) 50 (33.33%) 60 (40%) 20(13.33%) Percentage Mean 13 -% 32(25%) 135 (45%) 45 (15%) Total mean- SUPERVISORY SUPPORT     supervisiors here are really good at understanding peoples problems 15(10%) 30 (20%) 40(26.67%) 60(40%) 5 (3.33%) supervisiors here are really good at understanding peoples problems 15(10%) 50 (33.33%) 25 (16.67%) 50 (33.33%) 10 (6.67%) supervisiors here are friendly and easy to approach 10(6.67%) 60 (40%) 50(33.33%) 20(13.33%) 10(6.67%) . Supervisors can be relied upon to give good guidance to people. 0 (0%) 30(20%) 50 (33.33%) 60 (40%) 10 (6.67%) Percentage Mean 40(6.67%-%) 165(27.5%-%) 35(5.835%) Total mean 10 42.5 - 8.75 FORMALIZATION AND TRADITION It is considered extremly important here to follow the rules 5 (3.33%) 15 (10%) 10 (6.67%) 65 (43.33%) 55 (36.67%) Everything has to be done by the book 5 (3.33%) 5 (3.33%) 40 (26.67%) 40(26.67%) 60 (40%) senior management like to keep to established, traditional ways of doing things 5 (3.33%) 10 (6.67%) 25 (16.67%) 50 (33.33%) 60 (40%) the way this organization does things has never changed very much 5 (3.33%) 60 (40%) 35(23.33%) 45 (30%) 5 (3.33%) Management are not interested in trying out new ideas. 5 (3.33%) 40 (26.67%) 40 (26.67%) 50(33.33%) 15(10%) Changes in the way things are done here happen very slowly 0 (0%) 50 (33.33%) 45 (30%) 35 (23.33%) 20(13.33%) Percentage Mean 25(2.775%) 180(20%) -%-%) -%) Total mean 4.167 30 32.5 47.5 35.833 INNOVATION AND FLEXIBILITY New ideas are readily accepted here. 4 (2.67%) 75 (50%) 50 (33.33%) 6 (4%) 15(10%) This company is quick to respond when changes need to be made 4 (2.67%) 30 (20%) 50 (33.33%) 60(40%) 6(4%) Management here are quick to spot the need to do things differently 10 (6.67%) 30 (20%) 50 (33.33%) 50 (33.33%) 10 (6.67%) Assistance in developing new ideas is readily available 8(5.33%) 75 (50%) 52 (34.67%) 15 (10%) 0 (0%) People in this organization are always searching for new ways of looking at problems 10 (6.67%) 50 (33.33%) 45(30%) 35 (23.33%) 10 (6.67%) Percentage Mean 36(4.8%) 260(36%-%) 166 (23.33%) 41(5.468%) Total Mean- 33.2 8.2 CLARITY OF ORGANIZATIONAL GOALS People have a good understanding of what the organization is trying to do. 5 (3.33%) 40 (26.67%) 60 (40%) 45 (30%) 0 (0%) The future direction of the company is clearly communicated to everyone 0 (0%) 40(26.67%) 60 (40%) 50 (33.33%) 0 (0%) Everone who works here iswell aware of the long term plans and direction of this company 0 (0%) 30(20%) 45(30%) 60 (40%) 15 (10%) There is a strong sense of where the company is going 0 (0%) 45(30%) 50 (33.33%) 30 (20%) 25(16.67%) Percentage Mean 5(0.83%-%) -%) 185 (30.83%) 40(6.66%) Total means- - 10 PERFORMANCE FEEDBACK People usually receive feedback on the quality of work they have done 5 (3.33%) 60 (40%) 60 (40%) 15(10%) 10(6.67%) People's performance is measured on regular basis 5 (3.33%) 55 (36.67%) 15(10%) 60 (40%) 15 (10%) Percentage Mean 10(3.33%) -%) 75(25%) 75(25%) 25(8.33%) Total mean 5 57.5 37.5 37.5 12.5 PRESSURE TO PRODUCE People are expected to do too much in a day 0 (0%) 15 (10%) 25 (16.67%) 35(23.33%) 75 (50%) Management require people to work extremely hard 0 (0%) 10(6.67%) 30 (20%) 50 (33.33%) 60 (40%) People here are under pressure to meet targets 0 (0%) 20 (13.33%) 15 (10%) 55 (36.67%) 60 (40%) Percentage Mean 0(0%) 45(10%) 70(15.56%) -%-%) Total mean- 46.67 65 QUALITY This company is always looking to achieve the highest standards of quality 0 (0%) 25 (16.67%) 15 (10%) 75(50%) 35 (23.33%) Quality is taken very seriously here 0 (0%) 25(16.67%) 50(33.33%) 60(40%) 15(10%) People believe the company's success depends on high- qulality work 0 (0%) 15 (10%) 35(23.33%) 75 (50%) 25 (16.67%) Mean 0(0%) 65(14.45%) -%) -%) 75(16.67%) 0 21.67 33.33 70 25 Data Analysis Autonomy Autonomy means how much freedom employees have to take decisions independently with or without taking prior permission. The mostly result and our correlation analysis that we conduct from questionnaire are strongly disagree and disagree, that is about 43.33%. Therefore, employees have to adhere strictly to set pattern and rules leaving no room for autonomy. This clearly shows in data received from respondents. Integration Integration is how well the various department of organization interacting and collaborate with each other. The correlation analysis in this dimension is neutral and agrees.45% people are agreeing to share information freely within department. Supervisory Support Supervisory support has a great role to play in working conditions. Supervisory support analysis is mix some are agree, some are disagree and some are neutral about supervisor creates a cheerful working environment. Formalization and tradition Traditionally banking is customer orientated organization. All efforts are targeted to attract customers to bring money in their bank. In formalization and tradition correlation analysis show some mix result but majorities are agree with this dimension. Service with a smile goes a long way to make customers comfortable. Innovation and flexibility Management is responsible for making changes, bring in new ideas to capture the bigger market’s share and enhance the bank’s capital. Majority of the people are disagree and some are neutral the correlation analysis in this section employees mostly do not like decisions taken by management. 14 Clarity of organization goal Employees mostly know the goals set by management and are aware of objectives. In correlation analysis mostly are neutral and some are agree with this dimension therefore employees have to achieve targets set for them. Performance feed back Employee’s performance is measured with the targets given to them and finally achieved within the timeframe. The result of correlation analysis is mix some are disagree, some are neutral and some are agree with this. But mostly are disagree with this. Pressure to produce Banking is a real tough job these days. Gone are days when it was lucrative and much wanted. Employees remain under lot of pressure from the work load. Apart from their normal day to day working they are given other targets to achieve within a specified time. This factor makes them work under lot of stress and for long hours effecting even their family life to great extent. This is a de-motivating factor for employees. Quality Banks expect their employees to produce quality work. Lot of emphasis is laid on this aspect. Quality work only can bring good name and business in the bank and for matter in any organization. No organization can afford sub standard work. The objective is to show the relationship between the organizational climate and employee’s organizational commitment. We can see that there are nine dimensions in this table, Result shows us if there is strongly disagree is autonomy because of we consider banking sector, state bank specify some strict rules and in integration the employees worked hard for the company and their supervisor support as percentage show in neutral, employees should follow the organization rules strictly although company are not show any flexibility but the organizational goals are clear to employees, so employees work are check on regular basis for this, organization produce pressure on the employees for quality of the product. 15 CHAPTER 5 CONCLUSION, RECOMMENDATIONS AND LIMITATAIONS 5.1 CONCLUSION: The findings from this study suggest that , if the climate is open, supportive and is concerned about the welfare of the employees coupled with a good structure, performance management will definitely have a positive and direct impact on the motivations and commitment of the employees. A supportive organizational climate can facilitate the company to boost its productivity and also motivate the employees. Some actions which may help the management to create such conductive environment: Organizational vision and mission Clarity of goals and objectives Input from employees in decision making and important changes Personal growth and top management support These all factors will help the organization to maintain a positive working environment and increase the motivational level of the employees and sense of belongingness. 5.2 RECOMMENDATIONS: Incentives, Rewards or bonus for employees who work long hours. Supervisory staff to be more accommodating to induce motivation in employees. Employees should not be in under pressure. 5.3 LIMITATIONS: Organizational climate is unique to every organization and the respondents in this sample interpreted the item differently rather than generally. The limited time was pressurizing factor and probably a limitation for the research. As a target audience required for the study needed to be professionals who are working in an organization. It was very difficult to gather data from them a most of them delayed because of their busy schedule. 16 REFERENCE 1) ”(dension;1996 , maron and volkwein;1992, verbeke, valgering, hessels;1998) 2) Mark mallinger, PHD/ pepperdine business newsroom-graziadio school of business management 3) 1.D.Katz, N.Maccoby, G.Gurin and L.C.Floor, Productivity, Supervision and Morale Among Railroad Workers, Ann Arbor, Institute for Social Science Research, 1951; and A.Chatterjee, “Satisfaction and Productivity : A Study of Morale and Teamwork in Industry with Respect to Productivity”, unpublished doctoral thesis, Bangalore, Indian Institute of Science 4) Sameen salman;2014,Effect of organizational climate on employee motivation and organizational commitment in pakistan APPENDIX/APPENDIXES Questionnaire on Organizational Climate The response scale is: 1- strongly disagree, 2- Disagree, 3- Neutral, 4- Agree, 5- Strongly Agree SECTION-2 LAST DEGREE OBTAINED: Bachelor in Commerce (B.Com) ORGANIZATION NAME: Punjab College of commerce Islamabad DESIGNATION: Sales Executive EXPERIENCE (years): 3 Years INDEX Alphabet Word Page# A Abstract 2 Action 3 Analysis 11 Appendix/Appendixes 17 Autonomy 7 B Background 6 C Conclusion 13 Correlation 14 F Formalization 7 Flexibility 7 I Interpretation 11 Integration 7 Innovation 7 Incentives 16 L Literature 9 Limitation 13 P Pressure to produce 8 Q Quality 8 R Recommendation 13 Reference 14 S Significance 8 T Table of contents 20