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ORGANIZATIONAL CLIMATE AND EMPLOYEES’ COMMITMENT IN MANUFACTRUING INDUSTRY

CHAPTER ONE

INTRODUCTION

1.01     Background to the Study

In the 21st century, organisations are confronting more difficulties than ever before. These obstacles are not one of a kind to a particular industry or organisation, but rather influence all organisations, regardless of their structure or size. Organisational climate specifically is always challenged by the increasing number of changes affecting organisations nowadays (Nair, 2016). To survive and compete their rivals, organisations are continually looking to enhance their execution. Brown and Leigh (2015) believe that organisational climate is ending up more imperative than ever before due to organisations need to guarantee that those people who increase the value to the standard will need to remain in the organisation and will need to keep pouring their exertion into their work to the advantage of the organisation.

Organizational climate is the core circle of human environment within the boundaries of where the employees in an organization work. Further explained that climate affects every activity in an organization directly or indirectly and is affected by almost everything that happens in the organization. The survival and growth of any organization is directly affected by a favorable climate. Meanwhile Motlagh (2012) defines an organizational climate (sometimes called a corporate climate) as a process of measuring the “culture” of an organization and the organizational climate is a set of characteristics of the work environment, which are perceived directly or indirectly by employees, which is assumed to be the main force in influencing employee behavior.

 Organizational climate serves as a measure of individual perceptions or feelings about an organization. Organizational climate includes management or leadership styles, participation in decision making, provision of challenging jobs to employees, reduction of boredom and frustration, provision of benefits, personnel policies, provision of good working conditions and creation of suitable career ladder for academics (Nicholson and Miljus, 1992).

Work environment or climate perception of employees has significant consequences for both individuals and organizational. Climate or atmosphere in workplace has impact on employee’s motivation, behaviour, attitudes and potential, which, in turn is predicted to influence organizational productivity. Employees are engaged when organizations have healthy work culture and communication practices, where they can get platforms to express their concerns and opportunities to grow and develop their potential. The level of engagement in employees can be enhanced by identifying its drivers (influential factors) and work on them.(Adeyemi, 2015).

Herscovitch and Meyer (2012) defined commitment as the extent to which workers recognize the goals and objectives of the organization and they are willing to make effort and to work harder to help it prosper. Similarly, Bateman and Strasser (2014) described commitment as a multidimensional aspect relating employees’ devotion and faithfulness to readiness to exert effort on behalf of the organization and the desire to maintain membership.

Organizational climate can be defined as a comprehensive impression of one’s organization and individual influence on the working environment, which in turns impacts the individual’s behavior and work related attitudes (Litwin. and Stringer, 1968; Pritchard and Karasick, 1973). Forehand and Gilmer (2014) viewed climate as a unique set of dominant attributes that describes an organization, distinguishes it from others, and influences the behavior of the organization’s members. Researchers described climate as a main characteristic of the internal organizational environment which is an upshot of policies and activities conducted by its employees and exerts pressure to direct labor’s attitudes and behavior (Pritchard and Karasick, 2017). Organizational climate may be utilized as a management technique to endow managers with discerning insights into how their own employees view their organization. It is theorized as a psychological tool for concentrating on the individual and striving to comprehend the cognitive progressions and performance (Davidson, 2013).

Organizational climate are explicated in terms of seven key dimensions: Structure (refers to the level of formalities adopted by an organization and the extent to which jobs and tasks are clearly defined), Responsibility (is measured by the bulkiness of duties delegated to employees by management), Risk (indicates whether organization promotes risk advocacy vs. risk averseness), Reward (refers to promotion system of allocating rewards to deserving employees), Warmth and Support (whether organization is easy-going and lenient or strict and tense), Conflict (extent to which a friendly and healthy atmosphere prevails), and finally Expect

1.02   Statement of the Problem                                         

As today’s businesses continue to struggle to survive or acquire sustainable competitive advantage, it is important for organizations to better understand the factors that influence employees and important employee-oriented work outcomes. The growing significance placed on understanding employees and their behaviour within the organization has produced a great deal of interest in investigating employee perceptions of climate within the organization (Scott, Gaddis and Strange, 2012).

No organization in today’s competitive world can perform at peak levels unless each employee is committed to the organizations’ objectives and works as an effective team  member. The work place is changing dramatically and demands for highest quality of products are increasing. Appointment of good workers is critical but of greater significance is the organizations ability to create a committed workforce. According to Hancock, Allen, Bosco, McDaniel and Pierce, (2013) organizational commitment is the main predictor of turnover and performance; hence organizations that are concerned about employees and want to keep high performing employees should consider increasing organizational commitment.

Literature suggests that positive work related behaviour and attitudes largely depends on employee perceptions on the extent to which their employer values their contribution and cares about their wellbeing (Allen, Shore & Griffeth, 2014). To remain competitive in the face of these pressures organizational commitment is crucial. Without employee commitment there can be no improvement in any business area. To succeed in the face of increasing competition organizations need improved productivity at all levels. This requires commitment on the part of all employees which can only be achieved through better management practices in the area of managing rewards and compensation, by creating a perception of fairness through competitive wages and benefits (Coetzee, 2015).

It would appear in general that workers are largely dissatisfied with overall organizational climate. This is based on the researcher’s observations and interactions with members of the staff. The staff indicates that there is some form of dissatisfaction. Workers view their organizational climate as characterized by the following factors: Unchallenging jobs, shortage of personnel where workers are expected to perform responsibilities, which were supposed to be performed by other employees, lack of feedback about performance, lack of recognition for work done well through merit or announcements in meetings, lack of material resources which make it difficult for employees to carry out duties, poor communication where there is no two-way communication between managers and subordinates and lack of staff development activities which prevent personnel from being equipped with knowledge and skill that they need in order to provide quality service (Fajana, 2002).

1.03    Objective of the Study

The main purpose of the study is to investigate organizational climate and employees’ commitment. Other specifics objectives of the study are:

1.     To determine the impact of job autonomy on employee morale

2.     To ascertain the effect of a leadership style on the employee productivity

3.     To establish relationship between reward system and employee job satisfaction.

1.04     Research Questions

To achieve the above stated objectives, answers would be provided to the following questions.

1.     What is the impact of job autonomy on employee morale?

2.     What is the effect of a leadership style on the employee productivity?

3.     Is there any relationship between reward system and employee job satisfaction?

1.05     Research Hypotheses

The following hypotheses would be tested.

H1: Job autonomy does not have impact on employee morale

H2: Leadership style does not influence the employee productivity

H3: there is no relationship between reward system and employee job satisfaction

1.06          Significance of the Study

The study of organizational climate and employees’ commitment is hoped to be of benefits to students, business men, corporate organization, and Nestle Nigeria. The study also hopes to highlight the problem associated with organizational climate and to make use of the analysis to improve the working situation thereby minimizing the problems of organizational climate in organization and its environment.

The findings in this study will have both theoretical and practical contributions by adding to the existing knowledge on research that has already been done in relation to organizational climate and employees’ commitment.

1.07   Scope and Limitation of the Study

The research work will cover exclusively organizational climate and employees’ commitment of Nestle Nigeria Plc. The research work will be limited to employees of Nestle Nigeria Plc.

The limitation of this study is the time factor. Since the researcher carried out the research of the same time with her studies, there was limited time for to cover all the necessary areas of the research study. And also lack of audience from the respondent.

1.08   Definition of Key Terms

Organizational climate: This is a process of measuring the “culture” of an organization and the organizational climate is a set of characteristics of the work environment, which are perceived directly or indirectly by employees.

Employee Commitment: this is the bond employees experience with their organisation. Broadly speaking, employees who are committed to their organisation generally feel a connection with their organisation, feel that they fit in and, feel they understand the goals of the organisation

Turnover Intention: This is a measurement of whether a business' or organization's employees plan to leave their positions or whether that organization plans to remove employees from positions. Turnover intention, like turnover itself, can be either voluntary or involuntary

Job Satisfaction: Job satisfaction or employee satisfaction has been defined in many different ways. Some believe it is simply how content an individual is with his or her job, in other words, whether or not they like the job or individual aspects or facets of jobs, such as nature of work or supervision.

Employee Performance means the output or level of productivity of employee which is a determined by employee development in place by their organisation.

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