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CHAPTER-1: INTRODUCTION

In this age of globalization organizations get confronted with increasing


worldwide competition all around. So it becomes very necessary for an organization to
come up with a well thought-out and strategic business planning to be able to offer
products and services with additional value beyond competitor products and services.
Employees can act strategic by contributing to the properly implementation of the
business strategy. The organization gains a competitive advantage from this strategic
behavior. Hence the performance of an organization depends a lot on the behavior of
employees working in it as well the climate prevailing in the organization. For this reason
Human Resource Management (HRM) is an important part of the strategic planning in an
organization (Becker, Huselid & Ulrich, 2001).
Humans are active individuals with past experiences, internalized values, and
norms that are not necessarily those of the employing organization as said by Paauwe,
2004. Lewin and Cartwright (1951) said that human behavior could be understood as a
function of the individual person in its surrounding area. According to James et al (2008)
the various meanings that people associate with their physical surrounding areas are
referred to as their psychological environments. For organizational contexts, James and
Jones (1974) call this aspect as psychological climate which refers to peoples attachment
to their jobs, co-workers, leaders, equity of treatment and the like on individual level. In a
summarized way we can say that employee behavior is a function of characteristics of the
person and characteristics of the individually perceived psychological climate in the
organization. In this study psychological climate characteristics can be degree of trust,
conflict, morale, rewards equity, leader credibility, resistance to change and scape goating
in the organization. Burton, Lauridsen and Obel (2004) defines the sum of the individual
perceptions of these climate characteristics as organizational climate.

Employee Attitude
The importance of attitude in understanding psychological phenomenon was
recognizedearly in the history of social psychology. From the time of the concepts entry i
nto language of psychology, interest in attitude has been strong and growing. However,
over the years attitudes has been studied with differing emphasis and methods. Attitude
can also be defined in two ways, Conceptual and Operational. There is quite a difference
in the conceptual definition of the term attitude, and divergent points of view regarding
the concept of attitude have developed.
When the term first entered the field of social phenomenon, it was natural to
conceive of attitude as a tendency, set or readiness to respond to some social object. For
the first time, ALLPORT noted the definition of attitude, which he had observed
contained the words readiness, set or disposition to act. Even ALLPORT has used
these terms in defining attitude. He defines attitude as follows:

Attitude is a mental and neural state of readiness organized through experience,


exerting a directive or dynamic influence upon the individuals response to all objects and
situations with which it is related
Features of Attitude

Attitudes affect behavior of an individual by putting him ready to respond

favorably to things in his environment.


Attitudes are acquired through learning over a period of time. The process of
learning attitudes starts right from the childhood and continues throughout the life

of a person.
Attitudes are invisible as they constitute a psychologies phenomenon which
cannot be observed directly. They can be observed by observing the behavior of
an individual.

Attitudes are pervasive in nature and every individual has some kind of attitude
towards the objects in his environment. Moreover, attitudes are forced in the
socialization process and may relate to anything in the environment.

Association between Employee attitude and HRM


The association between HRM and performance is not strongly proved as
expected might be because the link is mediated by employee attitudes. To consider this
possibility, it is required to explore the association between HRM and employee attitudes.
Exploration of the association between HRM and employee attitudes is a better test in a
way to deal with information from independent sources. The information on both the HR
practices and performance was provided by the same manager in each workplace,
opening up the possibility of some response consistency bias. This is less likely to be a
problem when the attitudinal information is provided by employees. On the other hand,
there a potential problem created by the need to adopt the workplace as the unit of
analysis, and therefore to combine the attitudinal responses of the employees sampled,
since it is possible that the practices are not applied to all of them in the same way. It was
attempted to address by exploring the responses of those who belong to the largest
occupational group at each workplace since several of the questions were asked about
practices applied to them.
Organizational Climate
According to Burton et al (2004), organizational climate is defined as the
aggregated perceptions of individuals concerning the organization - its degree of trust,
conflict, morale, rewards equity, leader credibility, and resistance to change.
From the literature also it appeared that the term psychological climate is in lines
with the organizational climate. As per James & Jones (1974) psychological climate
consists of separate individual perceptions about the internal environment in the
organization.

It has been measured along dimensions as trust, hindrance,

disengagement, spirit, intimacy, aloofness, production emphasis and consideration


(Burton et al, 2004, p.4). The difference is the level on which it is dealt with those climate
dimensions. Organizational climate buys its concept from the social cognitive theory
which says that behavior, person and environment are interrelated; hence change in one
affects the other.

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Figure 1.1: Social cognitive Theory
Another important perspective distinct from the understanding of organizational
climate in this study is represented by Bowen and Ostroff (2004). They see organizational
climate as linking force between HRM practices and firm performance. Bowen and
Ostroff (2004) related this understanding to a whole school of researchers that defines
organizational climate as shared perception of what the organization is in terms of
practices, policies, procedures, routines and rewards. The definition of organizational
climate in their study is not characterized directly by factors as procedures, routines and
policies in the organization rather is characterized by perceived psychological
interpersonal dimensions like trust, conflict, and morale and so on.
Another term often mentioned within organizational behavior is organizational
culture. It is necessary to understand, because it can be confused and confounded with
organizational climate (Dension, 1996; Schneider, 1990 in Burton et al., 2004). The main
difference is that organizational culture additionally includes norms, symbols, structure
and rituals of an organization (Burton et al., 2004) whereas organizational climate uses it

exclusively as a descriptive measure of organizational activities. It is based upon


perceptions and is itself not an aspect of the organizational structure (Koys and Decotis,
1991 in Burton et al., 2004).
Now since the definition of organizational climate is clear, it is time to look at
climate profiles in particular. The competing values framework: flexibility versus control
and internal versus external focus, by Quinn and Rohrbaugh (1983, in Burton et al., 2004)
is used by Burton et al. (2004) to classify types of organizational climate. Burton et al.
(2004) cull out four climatic profiles: the group climate, the developmental climate, the
rational goal climate and the internal process climate. Those are described based upon
their degree of trust, conflict, morale, equity of rewards, resistance to change and leader
credibility.

Group climate:
The group climate is concentrated on internal focus with high trust and morale.

Developmental climate:
The developmental climate is more externally oriented. Trust and moral are high
as well, but the resistance to change is low.

Rational goal climate:


The rational goal climate is externally oriented to succeed, but morale and trust
are lower.

Internal process climate:


The internal process climate is more mechanical with a high resistance to change,
low of trust and low morale. The focus lies internal, on staying functioning.

Purpose of Study

The purpose of this study is to describe and distinguish the unique qualities of the
organizational climate of Triveni Engineering as perceived by its employee work groups,
to examine associations of that climate with a management system specifically
performance of the employees study. Further it intends to measure the impact of
organizational climate on performance. Secondly it intends to measure the employee
attitude and its impact on performance of the employees.
Therefore, this study intends to measure the impact of both the employee attitude
and the organizational climate on performance.

Context of the Study


This research basically emphasizes the need to identify the right attitude for
effective performance which would also enhance the overall growth of the organization.
Secondly, it caters to establish the favoring organizational climate which would enhance
the productivity of the employees. Thus, this study aspires to determine the impact of
both the employee attitude and organizational climate on the performance of the
employees of the organization.

Significance of the Study


Findings from organizational climate and employee attitude research may have
value in clarifying the future direction of management policies, procedures, and
conventions, thereby enabling the organization to adapt externally and integrate its
functions internally. Understanding of climate factors such as perception of
communication and collaboration can be used in making programmatic strategies and
administrative decisions. The quality and climate for organizational communications is a
major factor associated with programmatic direction. Both formal and informal
communications among colleagues and supervisors affect the motivation and support to

implement innovative educational programs and affects the performance of its


employees. Additionally, organizational climate research findings may contribute to
maintaining or improving employee job satisfaction (Litwin & Stringer, 1968),
motivation to accomplish objectives or goal setting, longevity of employee tenure, and
employees concept of professional status (Bandura, 1986 as cited in Kopelman et al.,
1990). The quantity of research suggested that the academy has invested much time and
thought into research studies on organizational climate, and placing the concept in the
field of organizational development. This study can add to the body of research on
organizational climate, and provide findings to which other researchers may relate.
This provides potential tool for the motivation of the employees which could help
the employees in transforming their negative attitude to positive attitude. The
management may make the employees understand that they are the partners of the
business and the employees organization life depends up on the constructive
contributions made by them.

Theoretical Framework

The theoretical framework for this study focused on two existing paradigms:
organizational theory and leadership theory. Organizational theory examines and predicts
how an organizations structure can assist employees in achieving their goals (Sir
Stanford Fleming College, 2006). Organizational theory establishes the framework for
dissecting and interpreting what is essential in directing organizational success and
performance. The International Society for Complexity, Information, and Design (2005)
in their publication stated that organizational theories are the backbone of the field of
organizational studies, which has as its objective the investigation of organizations,
particularly human organizations, in order to better understand their structures, functions
and properties for the purpose of enhancing productivity and satisfaction.

The theoretical framework used in the research given by International Society for
Complexity, Information, and Design, 2005 suggested that organizational theory is an
important factor as it pertains to the study and its potential results. Organizational theory
examines behavior, both at the individual and group levels of analysis .Individual
behavior within the organizational environment is notable, as it may be a critical factor in
predicting how an organization may perform. This performance may beat a high level or
low level, which can affect the organizational bottom line. Leadership theory is a
secondary component to the theoretical framework of the current case study. Rubenstein
(2005) aptly phrased the following: the current evolutionary phase of what we call
leadership can improve our workplaces, productivity, employee retention, and profits and
reduce strife inside the workplace. The theory of leadership has evolved continuously
throughout the past several decades, from the origins of gurus like Frederick Taylor to the
modern theorist or leaders like Peter Drucker or Jack Welch. Leadership contributes to
organizational objectives and achievements (Rubenstein, 2005).
Chu et al. (2005) explored the relationship among role conflicts, work attitude,
work pressure and departure tendency. Their results indicated that work attitude is the
behavior tendency at work, which has a direct impact on work behavior. Wei and Chu
(2008) performed a survey on employees in the financial service industry, and found that
work attitude has a positive effect on job performance. Better work attitude leads to better
job performance. Chih et al. (2008) indicated that work satisfaction and work
involvement have a positive effect on job performance. Organizational commitment
influences job performance via the identification and internalization of individuals within
the organization. When employees are emotionally committed to an organization, their
sales improve (Hunter and Thatcher, 2007). Chen et al. (2008) examined employees
working in companies after merging, and found that their commitment to the new
organization has a significant influence on job performance. Therefore, this research
inferred that the work attitude of employees in any industry has an influence on work
behavior which indirectly affects the performance.

TRIVENI ENGINEERING AND INDUSTRIES LIMITED


Profile
Triveni can be best described as technology focused sugar-plus industry. Through
a rational blend of technology and human capital, they deliver high quality products and
end-to-end solutions to their customers globally. They have head office located in
NOIDA (U.P) .They have a focused, innovative corporation having core competencies in
the areas of sugar and engineering. Their growth has been empowered with steadfast and
distinctive adherence to business ethics, transparent governance and commitment to
highest standards of social responsibility. From a humble beginning in 1930s, they have
transformed themselves into an INR 23 billion company through an interesting blend of
people, technology and entrepreneurial spirit. They believe in growth through leadership
and diversity.
Today, they touch the lives of millions of people globally by serving their
customers in the areas of sugar, turbines, gears & gearboxes and water & wastewater
treatment. While they are one of the leading sugar manufacturers in India, they are also
the market leaders in their engineering businesses, having a global footprint around the
world.
Embracing the virtues of integrity, excellence and commitment, they have move
ahead to take the opportunities and challenges offered by the future. They are geared to
transform into a truly global enterprise through a prudent mix of technical innovation and
exceptional customer service delivery. Their commitment to excellence and strong
corporate governance guides them in this endeavor, as they look ahead at powerful
growth and building a socially equitable, sustainable future.

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Sustained transformation & enhancement of quality delivery is an integral belief


that powers their growth and is the guiding principle for a truly exceptional customer
experience. A rational blend of determined intentions, focused efforts, intelligent
direction and skillful execution offers them a strong platform to deliver world-class
products and solutions to their customers.
They have institutionalized quality in everything that they do. From processes to
people to products, focus on quality touches every constituent of our organization. To
realize their goal of being a customer-focused, truly global corporation, they have
adopted quality enhancement practice by introducing six sigma, quality management
system and total quality management initiatives.
They lay emphasis on continuous improvement and performance excellence to
ensure high standards of quality in their products and solutions. They also focus on
developing a quality management system that is designed to facilitate continual
improvement, stimulate efficiency and enhance their customers experience with their
products and solutions.

Definition of Terms
1. Environment: In the context of organizational climate, environment is combatively
used in literature to reference the social and psychological context of organizations.
2. Organization: It refers to an institution, age ncy or entity established to serve a
specific function. Organizations may be composed of subgroups, occupational units,
hierarchical levels of function, or geographically dispersed units.
3. Organizational climate: According to Kopelman (1990) organizational climate refers
to meaningful interpretations of a work environment by the people in it. Tagiuri and

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Litwin (1968) use the terms climate and organizational climate to refer to the idea of
perceived environmental quality. Forehand and Gilmer (1964) defined climate as the
set of characteristics that describe an organization and that (a) distinguish the
organization from other organizations, (b) are relatively enduring over time, and (c)
influence the behavior of people in the organization (p. 362).
4. Organizational culture: It is a pattern of basic assumptions invented, discovered, or
developed by a given group as it learns to cope with its problems of external adaptation
and internal integration that has worked well enough to be considered valid and,
therefore, to be taught to new members as the correct way to perceive, think, and feel in
relation to those problems.
5. Climate categories: Very broad dimensions of organizational functions, each covering
many aspects of the climate perceptions being measured.
6. Perception / perceive: It is the act or ability to mentally understand, feel, or
intuitively comprehend impressions, qualities or concepts by means of the senses or
knowledge; to be aware of through the senses, to mentally separate a thing from others.

Summary

The organizational climate research may have value in clarifying the future
direction of management policies, procedures, thus enabling the organization to adapt
externally and integrate its functions internally. Understanding of climate factors such as
perception of communication and collaboration can be used in making programmatic
strategies and administrative decisions. The quality and climate for organizational
communications is a factor associated with programmatic direction. Both formal and
informal communications among colleagues and supervisors affect the motivation and
support to implement innovative programs and the performance efforts of its employees.

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Additionally, organizational climate research findings may contribute to maintaining or


improving employee job satisfaction (Litwin & Stringer, 1968), motivation to accomplish
objectives or goal setting, longevity of employee tenure, and employees concept of
professional status (Bandura, 1986 as cited in Kopelman et al., 1990). In these regards,
describing the organizational climate among categories is a potentially useful
management and organizational development strategy for the organization.
Hence this research is intended to find out the relationship between the
organizational climate, employee attitude and performance to enable the employers to
keep their employees motivated and committed towards their work which would
ultimately enhances performance.

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CHAPTER-2: REVIEW OF LITERATURE

Patterson, Malcolm G, West, Michael A, Lawthom, Rebecca and Nickell,


Stephen(1998), in their paper suggested that people are the most valuable resource of an
organisation, and that the management of people makes a difference to company
performance. In this research, they address these assumptions directly. But rather than
focusing simply on the traditional question of whether and which human resource
management practices most affect performance, they ask four central questions: 1. Is
there any relationship between employee attitudes (job satisfaction and commitment to
their organizations) and the performance of their companies? 2. Does organizational
culture predict the subsequent performance of organizations? 3. Do human resource
management practices make a difference to company performance and, if so, which of
these practices appear most important? 4. How do other managerial practices, such as
competitive strategies, emphasis on quality, investment in research and development, and
investment in technology, compare in terms of their influence upon company
performance with the influence of human resource management practices?
Their fundamental aim in the report is to aid managers in determining where to
direct their efforts in order to have most impact upon the performance of their companies.
They have drawn upon data gathered from an intensive ongoing ten year study of over a
hundred small and medium-sized manufacturing enterprises in the United Kingdom.
These data provide a clear picture of the links between various managerial practices and
company performance.
Cappelli, Peter and Neumark, David (1999), showed their interest in the
potential effects of different systems for organizing work and managing employees on the
performance of organizations has a long history in the social sciences. The interest in
economics, arguably more recent, reflects a general concern about the sources of
competitiveness in organizations. A number of methodological problems have confronted

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previous attempts to examine the relationship between work practices and the
performance of firms. Among the most intractable has been a concern about establishing
causation given heterogeneity biases in what have typically been cross-sectional data.
The results from prior literature are suggestive of important productivity effects but
remain inconclusive. To address the major methodological problems they use a national
probability sample of establishments, measures of work practices and performance that
are comparable across organizations, and most importantly a unique longitudinal design
incorporating data from a period prior to the advent of high performance work practices.
Their results suggested that work practices that transfer power to employees, often
described as high performance practices, may rose productivity, although the statistical
case is weak. However, they also found that these work practices on average raise labor
costs per employee. The net result is no apparent effect on efficiency, a measure that
combines labor costs and labor productivity. While these results do not appear to be
consistent with the view that such practices are good for employers, neither do they
suggest that such practices harm employers. They are, however, consistent with the view
that these practices raise average compensation and hence may be good for employees.
Overall, then, the evidence suggests that firms can choose high road human resources
practices that raise employee compensation without necessarily harming their
competitiveness.
Gelade, Garry A. and Ivery, Mark (2003), examined relationships between
human resource management (HRM), work climate and organizational performance in
the branch network of a retail bank. It extends previous research on group-level climateperformance and HRM-performance relationships and examines how climate and HRM
function as joint antecedents of business unit performance. Significant correlations are
found between work climate, human resource practices, and business performance. The
results show that the correlations between climate and performance cannot be explained
by their common dependence on HRM factors, and that the data are consistent with a
mediation model in which the effects of HRM practices on business performance are
partially mediated by work climate.

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Patterson, Malcolm Warr, Peter and West, Michael (2004), predicted that
associations between company climate and productivity would be mediated by average
level of job satisfaction. In a study of 42 manufacturing companies, subsequent
productivity was significantly correlated in controlled analyses with eight aspects of
organizational climate (e.g. skill development and concern for employee welfare) and
also with average job satisfaction. The mediation hypothesis was supported in
hierarchical multiple regressions for separate aspects of climate. In addition, an overall
analysis showed that company productivity was more strongly correlated with those
aspects of climate that had stronger satisfaction loadings. A second prediction, that
managers perceptions of climate would be more closely linked to company productivity
than would those of non-managers, was not supported. However, managers assessments
of most aspects of their companys climate were significantly more positive than those of
non-managers.
Jaramillo, Fernando Prakash Mulki, Jay and Solomon, Paul (2006),
researched to investigate the effects of ethical climate on salespersons role stress, job
attitudes, turnover intention, and job performance. Responses from 138 salespeople who
work for a large retailer selling high-end consumer durables at 68 stores in 16 states were
used to examine the process through which ethical climate affects organizational
variables. This is the first study offering empirical evidence that both job stress and job
attitudes are the mechanisms through which a high ethical climate leads to lower turnover
intention and higher job performance. Results indicated that ethical climate results in
lower role conflict and role ambiguity and higher satisfaction, which, in turn, leads to
lower turnover intention and organizational commitment. Also, findings indicate that
organizational commitment is a significant predictor of job performance.
Cascio, Wayne F(2006) , in his paper found that the behavior of individual
workers has important financial consequences for organizational performance and
productivity, as well as for employees themselves. They have examined just a few of the
many possible areas where the control of costs associated with employee behaviors (e.g.,
turnover, absenteeism, presenters, unhealthy lifestyles) and the benefits associated with

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wise management of employees (promotion of positive employee attitudes, training and


development programs targeted to strategic challenges, use of valid staffing practices for
hiring and promotion) can increase productivity and decrease operating expenses.
Comprehensive audits of human resource policies at all levels of employees and
managers may well reveal opportunities for even greater gains.
Wei, Fan Zhejiang, Yang and Xin ,Yang (2007), studied the influence of
employees attitude towards their organizations workplace health policies on their
organizational commitment and job satisfaction were examined in a China-based
company with data collected from 123 workers and managers. The main hypotheses were
that employees attitude towards WHP were associated with (a) their job satisfaction, (b)
and organizational commitment. Support was obtained for each hypothesis. Employees
attitudes towards workplace health policies were both positively related to their job
satisfaction and organizational commitment. However, the hypothesis that employees job
levels related to their attitudes was not tested in this study. At last, implications and
suggestions were given regarding developing workplace health policies in Chinese
organizations in this research.
Guest, David E and Conway, Neil (2007) explored the link between human
resource management (HRM), employee attitudes and workplace performance using the
2004 Workplace Employment Relations Survey. It was found that there is an association
between a composite measure of HRM and workplace performance and between a
composite measure of employee attitudes and workplace performance. But, in contrast to
most previous research, there is no association between HRM and employee attitudes and
a negative association between HRM and employee well-being. This study explores some
key issues concerning the relation between employees attitude towards human resource
management (HRM) and performance. These include the way in which they
conceptualize and measure HRM, the nature of performance and the process whereby
HRM and performance might be linked. The main focus is on the way HRM and
performance might be linked and in particular a core assumption in many models that
HRM has its impact through its effect on workers attitudes and behavior.

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Luthans, Fred, Norman, Steven M, Avolio, Bruce J. and Avey, James B(2007)
, in their paper investigated whether the recently emerging core construct of positive
psychological capital (consisting of hope, resilience, optimism, and efficacy) plays a role
in mediating the effects of a supportive organizational climate with employee outcomes.
Utilizing three diverse samples, results showed that employees psychological capital is
positively related to their performance, satisfaction, and commitment and a supportive
climate is related to employees satisfaction and commitment. The studys major
hypothesis that employees psychological capital mediates the relationship between
supportive climate and their performance was also supported. In conclusion, the results of
this study not only suggest the seeming value of employees psychological capital at all
levels within organizations, but also the benefits that may result from organizations
providing positive, supportive climates. Since psychological capital is state-like and
there is at least preliminary evidence that it can be developed , investing in and
developing employees psychological capital may be an example of the new thinking and
new approaches that are needed for the flat world environment facing todays
organizations and their leaders.
Lichtman, Robert J (2007), examined how organizational climate factors, such
as opportunity for personal growth, development, advancement, etc., influence the degree
that supply chain managers perceive their work situation as facilitating their giving their
best effort (performance) to their work. This study focuses on supply chain managers, as
this is a new, important, and previously unstudied managerial group. It was hypothesized,
based on past research, that supply chain managers who perceived a supportive climate in
their organization would feel that their work facilitates their giving their best effort at
work while those supply chain managers who perceived their organizational climate as
unsupportive would perceive their work situation as not conducive to their putting forth
their best effort at work. The results indicated that of the six climate questions dealing
with self-fulfillment, advancement, interpersonal relations, etc., supply chain managers
who reported that their work environment facilitates putting forth their best effort
indicated that they perceived their organization as providing a high degree of opportunity

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to achieve these factors. Whereas, supply chain managers who perceived their
organization as not supportive of these six factors perceived that their work environment
did not facilitate their putting forth their best effort.
Spruill, Edric L.(2008) , in his case quantified correlation factors between
organizational climate and employee performance at one specific division of an
organization. The goal was to determine if the factors that defined organizational climate
and employee performance could be correlated to a statistically significant degree that
would then illustrate the need for leaders to understand what could influence the
organizational efficiency and productivity of employees. An electronic web-based survey
was utilized to collect survey responses from the participants. The demography consisted
of employees below the senior manager level within the specific division. The results
suggested that organizational climate is significantly correlated to employee performance
according to 17 of 18 hypotheses.
Riketta, Michael (2008), conducted meta-analytic regression analyses on 16
studies that had repeatedly measured performance and job attitudes (i.e., job satisfaction
or organizational commitment). The effect of job attitudes on subsequent performance,
with baseline performance controlled, was weak but statistically significant (=.06). The
effect was slightly stronger for commitment than for satisfaction and depended negatively
on time lag. Effects of performance on subsequent job attitudes were elusive (= .00
across all studies), which suggested that job attitudes are more likely to influence
performance than vice versa.
Voon, Boo-Ho, Hamali, Jamil And Tangkau, Jennifer(2009), in their paper
examined the relationships among service climate, employee satisfaction, employee
loyalty, and organizational performance of service organizations. The service-driven
market orientation model of Voon (2006) was adapted to gauge the service climate from
the employees perspective. Structured questionnaires were given to senior employees of
three selected service organizations. A total of 120 usable questionnaires were analyzed
and the findings indicate that service climate positively influence employee satisfaction,

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employee loyalty, and employee perceived organizational performance. There were also
positive relationships among employee satisfaction, employee loyalty and organizational
performance
Ngo, Hang-Yue Foley, Sharon and Loi, Raymond (2009), in their paper tested a
conceptual model to examine the impact of family friendly work practices (FFWPs) at
the organizational level. In their model, top management support for equal opportunities
is considered an antecedent of FFWPs and positive organizational climate, and firm
performance and employee turnover are considered outcome variables. Structural
equation modeling (SEM) was used to analyze the data collected from a sample of HR
managers in multinational corporations (MNCs) in Hong Kong. The results showed that
top management support for equal opportunities was positively related to a firms level of
FFWPs and organizational climate. In addition, FFWPs were positively related to
organizational climate. They further found that organizational climate acted as a mediator
between FFWPs and firm-level outcomes.
Johnson, Diane E (2009), argued that these non-financial measures may be better
predictors of performance than traditional financial accounting measures. The assumed
relationship between non-financial measures and performance is that non-financial
measures drive performance. Employee attitudes often are used as non-financial
measures of performance. However, Schneider et al. (2003b) have developed a model
that suggests performance (i.e., financial outcomes) drives employee attitude, rather than
the reverse. Their research empirically explores this relationship.
Their findings suggested that financial performance leads to employee attitudes,
most specifically when the financial performance improved. The findings were of interest
to researchers (and practitioners) in a number of important ways. Most notably, they
found that when exploring the relationship between financial performance and employee
attitudes, it was important to investigate changes in financial performance rather than just
levels of financial performance. When only levels of ROA were investigated, attitude
levels, in general, were significantly higher in banking centers that had performed the
worst financially and lower in banking centers that had performed the best financially.

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These findings were contrary to the expectations derived from theory and prior research.
However, when looking at the changes in financial performance over three- and sixmonth periods preceding the collection of attitudinal data, banking centers that
experienced the highest positive change in ROA had employees with significantly greater
attitude levels than employees in banking centers that experienced the lowest change in
financial performance.
Raza, Syed Ahmad (2010), in his study considered the objectives of (a) to
identify the strengths of the organizational climates of Public and Private Degree
Colleges as perceived by the heads, teachers and college students. (b) To identify the
weaknesses of the organizational climates of Public and Private Degree Colleges as
perceived by the heads, teachers and college students. (c) To measure the performance of
the teachers as perceived by the heads of the organizations. (d) To explore the
performance of teachers as perceived by the college students. (e) To find out the
relationship between organizational climate and performance of college teachers.
The nature of this study was co-relational type. Population of this study
comprised of the following categories (1) Principals of all Public and Private degree
colleges in Punjab (2) all the teachers working in Public and Private degree colleges in
Punjab (3) all the students studying in these colleges. For choosing the sample from the
population random sampling technique was used. The sample was consisted of 100
degree colleges (70 Public + 30 Private); their heads, five teachers and fifteen students
from each college were also included in the sample. The total was 100 heads, 500
teachers and 1500 students. In order to measure the variables the research instruments
were the questionnaires for heads, teachers and students of sampled degree colleges. Data
collected from sampled colleges was tabulated, analyzed and interpreted by applying
mean, standard deviation, standard error of mean, coefficient of correlation and t-test
techniques in the light of the objectives of the study.
Voorde, K. Van De , Veldhovena M. Van and Paauwe, J.(2010), in their paper
presented a two-wave cross-lagged study (average interval of two years) on time

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precedence in the relationship between organizational climate and organizational


performance in 171 branches of a financial services organization in the Netherlands. It
was argued that four HR-induced organizational climate dimensions influence
organizational performance. Additionally, it was also hypothesized that high
organizational performance influences the four organizational climate dimensions
through investments in HR practices and through signaling effects. Finally, it was
reasoned that possibly both processes are present simultaneously. Results of testing a
series of competing models in AMOS showed that organizational climate at time point 1
influenced organizational performance at time point 2 rather than the reverse, or both
processes being present simultaneously.
Ahmad, Habib Ahmad, Khursheed Shah, Idrees Ali (2010), in their study
utilized survey data collected form 310 employees of 15 advertising agencies of
Islamabad (Pakistan) to test interdependency of job satisfaction and job performance,
effect of organizational commitment and attitude towards work on job satisfaction and
impact of organizational commitment and attitude towards work on performance.
Response patterns, analyzed by gender, education, department, income and age are also
discussed. Results showed a weak relation between job satisfaction and performance
where as organizational commitment has strong positive relation with performance and
attitude towards work has a strong positive relation with job satisfaction. The study
identified insignificant impact of organizational commitment on job satisfaction and
attitude towards work on job performance.
Putter, Lars (2010), in his paper studied the relationship between organizational
climate and organizational performance is tested for a large multinational company.
Besides, he tested what influence management support and organizational unit size have
on organizational climate perception. In total, 30.892 employees among 49 operating
companies participated in the study. Regression analyses showed that there is a
significant relation between organizational climate and profitability, sustainability &
growth, EBIT margin, productivity and employee engagement. No relation between
organizational climate and employee turnover was identified. Besides, he did not found

22

evidence that the relation between organizational climate and profitability, sustainability
& growth, EBIT margin and productivity is mediated by employee engagement.
Furthermore, it was found that organizational climate is strongly influenced by
management support, and that the relation between organizational unit size and
organizational climate is mediated by management support. These results contribute to
the literature on organizational climate and performance. Besides, these results are of
great value to the business world, as managerial implications have been identified that
can be used to improve organizational climate, and thus, company performance
Raza, Syed Ahmad and Shah Arid, Pir Mehr Ali (2010), aimed to determine
the impact of organizational climate on performance of college teachers. The researcher
selected the area of college education as the focus of the study. The study was delimited
to all the public sector degree colleges of Punjab. Population of this study consisted of all
the principals and teachers working in public sector degree colleges of Punjab and the
simple random sampling technique sample was used. The sample consisted of 70 degree
colleges, their heads, and five teachers from each sampled college. In order to measure
the variables, the research instruments were the questionnaires for principals and
teachers. Each questionnaire consisted of 30 items. The data collected from sampled
colleges were tabulated, analyzed and interpreted in light of the objectives of the study by
applying statistical tools of research, such as mean, standard deviation, standard error of
means, and coefficient of correlation. On the basis of analysis, it was concluded that the
majority of public college principals opined that open climate was very highly and
positively correlated to teacher performance, but paternal and closed climates were
negatively correlated to teacher performance. In light of the conclusions, it is
recommended that teachers may be given chances to discuss their academic problems in
groups, seminars, and conferences. Workshops may be arranged more for this purpose.
The management style of principals may be improved through in-service training,
seminars, workshops and departmental meetings and supervision. Performance of
teachers can be increased by promoting open, as well as controlled, climates and avoiding
closed climate. These climates may be ensured through administrative policy and
measures

23

Luu, Hieu (2011), examined the relationship between employee attitudes and
selected measures of job performance (sales volume, turnover, and absenteeism). Using
annual employee survey data from Eroski, a cooperative retail business in Spain,
evidence was found that employee attitudes are positively related to sales volume. This
relationship is, however, only present in stores with a high level of employee ownership
and employee involvement (called Coop stores). In stores with lower level of employee
ownership (called Gespa stores), no such evidence was found. In both types of stores, no
evidence of employee attitudes related to turnover rate and absenteeism rate was found.
These empirical findings fit well with literature on job attitudes and producer
cooperatives. It was argued that the findings are consistent with Coops superior
institutional features over Gespas.
Cooke, William N. And Meyer, David G.(2011), in their paper studied the
effects of high-involvement, high commitment HRM systems on performance was any
treatment, except by assumption, of the cognitive responses of employees to these
systems. To examine these largely untested assumptions, the literature was integrated and
extended on knowledge-based perspectives of firms and psychological workplace
climates; developing a structural model of the multifaceted nature of knowledge and skill
development climates and the direct and multiplicative effects of these climates on
employee psychological states of performance. Estimated against a sample of 888
employees across eight automotive supplier firms, their modeling obtains substantial
empirical support, which lended credence to the underlying assumptions made about
employee cognitive responses in the strategic HRM literature. Among more pronounced
findings, employees psychological states of performance are positively and strongly
associated with climates within which employees place greater value on learning new
skills and were more receptive to the diffusion of new technologies.
Heffernan, Margaret and Dundon, Tony(2012) , explored the relationship
between organizational-level High Performance Work Systems (HPWS) and individual
employee-level behaviors. Data was collected from 188 employees in three companies in

24

the Republic of Ireland (RoI). The findings showed that employees in organizations with
a high investment in HPWS report lower job satisfaction, affective commitment and
higher perceptions of job pressure than those in organizations with a medium or low
investment in HPWS. Using cross-level analyses, perceptions of relational distributive
and relational procedural justice were found to mediate the relationship between HPWS
and employee outcomes of job satisfaction and affective commitment. Interactional
justice and relational procedural justice partially mediated the relationship between
organizational-level HPWS and employee work pressure. By using justice theory, the
research contributes to the body of knowledge concerning the causal processes between
HR practice and performance outcomes.
Liao, Chin-Wen Lu, Chien-Yu Huang, Chuan-Kuei and Chiang, Ta-Lung
(2012), in their paper aimed to explore the relations among work values, work attitude
(including job involvement and organizational commitment) and job performance, and
explored how the directors leadership may be a moderator between the work values and
work attitude of green industry employees in Taiwan. Data was collected through
convenience sampling. The samples in this study were employees and directors in the
green energy industry in Taiwan, A total of 650 questionnaires were sent to employees
and 120 questionnaires to directors. Of these, 485 valid questionnaires from the
employees were received as well as 92 questionnaires from the directors. The research
results found a positive correlation between work values and job attitude (including job
involvement and organizational commitment). A mediated effect was shown in work
attitude and job involvement toward work value and job performance. Directors with a
supportive and directive leadership style had a moderate effect on the relations between
work values and work attitude (including job involvement and organizational
commitment).

25

CHAPTER 3: RESEARCH METHODS AND PROCEDURES

Purpose of the Study


To have a deep knowledge about the subject matter
To determine the relationship between employee attitude and performance as well
as organizational climate and performance
To find out which of the two has the greatest impact on the employee performance
To frame the research questions and have a discussion on it.

Research Design
A research design is a type of blueprint prepared on various types of blueprints
available for the collection, measurement and analysis of data. A research design calls for
developing the most efficient plan of gathering the needed information. The design of a
research study is based on the purpose of the study.
A research design is the specification of methods and procedures for acquiring the
information needed. It is the overall pattern or framework of the project that stipulates
what information is to be collected from which source and by what procedures.
Typically, a research design involves the following components or tasks:1. Define the information needed
2. Design the exploratory, descriptive and/or causal phases of the research
3. Specify the measurement and scaling procedures
4. Construct and pretest a questionnaire or an appropriate form for data collection.
5. Specify the sampling process and sample size
6. Develop a plan of data analysis.

26

In this study, the type of research used is Descriptive Research design. For getting
into detail of descriptive research, it is first necessary to know about Conclusive research
design as descriptive research is a type of conclusive research design.
Conclusive Research Design
It is the research designed to assist the decision maker in determining, evaluating
and selecting the best course of action to take in the given situation. It is more formal and
structured than exploratory research. It is based on large, representative samples, and the
data obtained are subjected to quantitative analysis. The findings from the research are
considered to be conclusive in nature in that they are used as inputs into managerial
decision making.
Conclusive research design is further divided into two-descriptive research and
causal research. Descriptive research is the one that has description of something
usually market characteristics or functions as their major objective. It is concerned with
the six Ws i.e., who, what, when, where, why and way the research is conducted. Causal
research is the one where the major objective is to obtain evidence regarding cause-andeffect relationships.
In this study, descriptive plus causal research design both are being used as the
research design. This is due to the reason that the problem is clearly defined and our
major objective lies in to describe the need and relevance of employee attitude and
organizational climate in the context of organization and how this affects the performance
of the employee. The study also demands certain predictions which are also the part of
descriptive research design. Further, the impact of both attitude and climate needs to be
measured against performance; hence the causal research design came into the picture.
Collectively, it contributes to conclusive research design.

Research Question

27

The research questions are refined statements of the specific components of the
problem. Each component of the problem may have to be broken down into
subcomponents or research questions. Research questions ask what specific information
is required with respect to the problem components. The formulation of the research
questions should be guided not only by the problem definition, but also by the theoretical
framework and the analytical model adopted.
Research questions linked with this study are as follows1. Is there a statistically significant relationship between organizational climate and
employee performance?
2. To what extent employee attitude plays a significant role in enhancing the employee
performance?
These research questions will be discussed later in the report

Participants
The participants are the people who were taken into consideration in the study.
These are the employees of the Triveni Engineering who filled the questionnaires and
were analyzed to determine as to how much their performance is affected by their attitude
and the organizational climate.

Data Collection

28

Collection of data is the first step in statistics. The data collection process follows
the formulation for research design including the sample plan. The data can be secondary
or primary.
D
aa

ii

P
t

a
C
o
e
cc
o
n

a
a

l
l

o
t

ee
i

m
m

cc

l
o

Figure 3.1: Types of Data Collection


Collection of Primary Data can be through observations or through direct
communication with respondents on one form or another or through personal interviews.
I have collected primary data by the means of a Questionnaire. The Questionnaire was
formulated keeping in mind the objectives of the research study.
Secondary data means data that is already available i.e., they refer to data, which
has already been collected and analyzed by someone else. In other words, it is the data
collected for some purpose other than the problem at hand. When a secondary data is
used, it has to be taken into consideration the various sources from where data can be
obtained. This includes information from various books, periodicals, magazines etc.
Advantages of Secondary data
1. Help in identifying the problem
2. Help in developing an approach to the problem.
3. Help in formulating an appropriate research design
4. Help in answering certain research questions and test some hypotheses
5. Help in interpreting primary data more insightfully.

29

Instrument Used
In this study, the instrument used is questionnaire .A questionnaire is defined as a
structured technique for data collection that consists of a series of questions, written or
verbal, that a respondent answers. The questionnaire has been developed keeping in
consideration the objective of the study.
Objectives of a Good Questionnaire
It must translate the information needed into a set of specific questions that the
respondents can and will answer.
A questionnaire must uplift, motivate, and encourage the respondent to become
involved in the interview, to cooperate, and to complete the interview.
A questionnaire must minimize response error.
In this research, basically three parameters are used out of which one is divided
into three described as follows:1. Organizational Climate
2. Employee Attitude
3. Employee Performance
Organizational Climate is measured by the following four1. Ethical Climate
2. Role Conflict
3. Role Ambiguity
4. Collaboration
Employee Attitude is measured by the following three1. Belongingness
2. Cooperation
3. Appreciation
Organizational Climate measures the nature of existing climate in the organization
on the basis of the ethicality of the existing climate, the role conflict, role ambiguity and
collaboration.
Employee attitude measures the degree to which the employee feel committed
toward his organization and is measured by degree of belongingness, cooperation and
appreciation.

30

Lastly, the employee performance measures the extent to which the employees
performance is being affected by the organizational climate and the employee attitude.
Hence, the questionnaire used in the study obeys all the above listed objectives of
questionnaire.

Pilot Study
A pilot study is an initial investigation to give information that will be necessary
when designing a future trial or study. For example a pilot may be used to:

assess the time required to examine each patient,

to determine the quality of a proposed questionnaire, or

to estimate the variability of key variables (for sample size calculation).


There should be an outline of the future study for which the pilot is being used to

gather information. As the sample size of a pilot study is seldom sufficient to draw
reliable conclusions, the pilot should not be an end in itself.
In this study, the pilot study has been conducted on 40 samples to check the
reliability of the questionnaire .The sampling method used in the pilot study was
convenient sampling.

Reliability of Pilot Study

31

Case Processing Summary


N
Cases

Valid

%
40

100.0

.0

40

100.0

Excluded
Total

Reliability Statistics
Cronbach's Alpha

N of Items

.731

30

Table 3.1: Exhibit 1


From the above, we can see the cronbach alpha value come out to be 0.73 which
is greater than 0.6. This implies that the questionnaire is reliable and can be used for the
purpose of the study further.
Reliability of Overall Questionnaire
Case Processing Summary
N
Cases

Valid

%
150

100.0

.0

150

100.0

Excludeda
Total
.
Reliability Statistics
Cronbach's Alpha

N of Items
.711

30

Table 3.2: Exhibit 2


Here, the reliability of the entire questionnaire came out to be quite good as the Cronbach
value is 0.711 which is greater than 0.6 that is acceptable.

32

Procedures

The questionnaires were assigned randomly in the work time in the organization.
All the questionnaires were returned voluntarily. Participants were assured of
confidentiality. No one in the organization assessed the completed questionnaires and the
assistant sent all the sealed questionnaires to the researcher.

Sampling

Sampling is a method to draw a representative sample from the population or


universe through which the population parameters are estimated. The term population
refers to set of data not to the sources of the data, from the whole universe.
Specifically, it addresses three questions:

To Whom to survey (The Sample Unit)


How many to Survey (The Sample Size)
How to select them (The Sampling Procedure)

Sampling is the selection of some part of an aggregate or totality on the basis of


which a judgment or inference about the aggregate or totality is made. In other words, it
is the process of obtaining information about population by examining a part of it. In
most of the research work and surveys, the usual approach happens to be to make
generalizations or to draw inferences based on samples about the parameters of
population from which the samples are taken. For the collection of data deliberate
sampling has been done in which various types of information were collected from the
employees.

33

Sampling technique used

In this study, convenient sampling was used. This sampling method involves
deliberate selection of a particular unit of the universe for constituting a sample based on
the easy availability of the people..

CHAPTER-4: DATA ANALYSIS AND FINDINGS

34

Data Analysis

Analysis of data is done on the basis of responses received through the


questionnaires. The questionnaires were filled by all the employees of the organization
according to the instructions mentioned. Then these responses are entered in SPSS for
analysis.
Analysis and interpretation of data contains two steps

Analysis of data

interpretation of the analyzed data

The data is entered as shown below:-

Figure 4.1: Snapshot 1


The responses are entered as shown below:-

35

Figure 4.2: Snapshot 2

For this study, the method used for analyzing the data is Regression Analysis
which measures the impact of dependent variable on independent variable. Here, the
impact of employee attitude and organizational climate is being measured on
performance. The regression coefficient tells us the intensity of impact on the dependent
variable. In this study, dependent variable includes performance and independent variable
includes employee attitude and organizational climate.

This research study used regression analysis to illustrate the relationship between
organizational climate and employee performance & employee attitude and employee
performance. Regression analysis expands upon correlational analysis. While correlation
measures a linear relationship, regression creates a line to describe the relationship
(Moore, 2001). Moore (2001) further posited, the usefulness of a regression line
depends on the correlation between the variables.

36

This research study used the method of R, which shows how successful the
regression was in explaining the response (Moore, 2001, p. 290). The predictor and
response variable values were identified from the participants to the survey from the
research target population. The survey responses to the 30 questions were allocated to the
factors defined for organizational climate and employee attitude. These responses to the
questions on the survey were assigned a value of 1-5 (for disagree, somewhat disagree,
etc.) and were used as the numeric values for the organizational climate and employee
attitude factors subjected to regression analysis. The responses to the questions on the
survey were allocated to the factors defined for the employee performance factors. These
responses were used as the numeric values subjected to regression analysis.
For checking of the impact of the organizational climate and employee attitude on
performance, the performance is regressed on the both the former parameters. The
regression equation can be expressed as:
Performance= Employee Attitude + Organizational climate
Where,
Performance= Dependent variable
Employee attitude= Independent variable
Organizational climate=Independent variable
Coefficientsa
Standardized
Unstandardized Coefficients
Model
1

B
(Constant)

Std. Error
1.120

.347

OC

.148

.134

Att

.420

.105

a. Dependent Variable: Perf

Coefficients
Beta

Sig.

3.232

.002

.092

1.100

.273

.333

3.984

.000

37

Model Summary

Model

R Square

.379a

Adjusted R

Std. Error of the

Square

Estimate

.144

.132

.45120

a. Predictors: (Constant), Att, OC

Table 4.1: Exhibit 3


From the above we can see that regression coefficient for employee attitude was
significant when performance is regressed on employee attitude with =.333, p<0.01.
This implies that employee attitude has the significant effect on the employee
performance. On the contrary, the organizational climate does not have significant impact
on the performance of the employee since the =.092, p>0.01 indicating insignificant
relationship between performance and organizational climate. The R squared value of .
144 shows that variables from the two factors accounted for 14.4% in the variance of
performance.

Review of methodology

Research Design:

Descriptive research

Research Instrument:

Structured Questionnaire

Sampling Plan
i) Sample Method:

Convenient Sampling

ii) Sample Size:

150

iii) Sample Unit:

Employees working in the


Organization
Table 4.2: Methodology review

38

Source of Data
a) Primary Data: Structured Questionnaire
b) Secondary Data: Journals, Company Data, etc.

Results of Research Questions


The research questions framed were:
RQ1: Is there a statistically significant relationship between organizational climate and
employee performance?
RQ2: To what extent employee attitude plays a significant role in enhancing the
employee performance?
These questions would be discussed based upon the hypothesis which could be as
mentioned:The result of these research questions would be explained with the help of the
hypothesis for each research question.
Hypothesis for RQ1
H1: Collaborative climate has significant impact on the employee performance.
H2: Role clarity and ambiguity has significant impact on employee performance.
Hypothesis for RQ2
H3: Belongingness towards the organization plays a significant role in affecting
performance.
H4: Appreciation by the top management significantly motivates employee to perform
good.

39

Discussion of Research Question


Test of Hypothesis 1
With the help of the correlation analysis this hypothesis can be tested. Hence from the
figure below:

Correlations
Perf
Perf

Pearson Correlation

C
1

Sig. (2-tailed)
N
C

Pearson Correlation

.406**
.000

150

150

.406**

Sig. (2-tailed)

.000

150

150

**. Correlation is significant at the 0.01 level (2-tailed).

Table 4.3: Exhibit 4


It can be said that collaborative environment is significantly and positively related
with performance with value of correlational coefficient as .406 and p value as .000
which is less than 0.01 thus making it significant. Hence, it can be interpreted as the more
the climate is collaborative the more the effect on the performance can be seen.
Therefore, the collaborative environment is moderately related to performance
and hence we can say the hypothesis H1 is supported by the result.
Test for Hypothesis 2
The regression result could best explain this hypothesis. From the below figure it
can be depicted that the role clarity and role ambiguity significantly effects the employee
performance. The intensity of the impact of role ambiguity can be shown by the

40

regression coefficient value () of .228 and p value .005 which is less than 0.05 which
indicates that less the ambiguity; more effective will be the performance.
On the other hand, the role clarity does not have significant effect on the
performance with =.120 and p value=.138 not less than .01 which is insignificant.
Therefore, this hypothesis is partially supported.

Coefficientsa
Standardized
Unstandardized Coefficients
Model
1

B
(Constant)

Std. Error
1.823

.242

RC

.106

.071

RA

.184

.065

Coefficients
Beta

Sig.
7.522

.000

.120

1.493

.138

.228

2.829

.005

a. Dependent Variable: Perf

Table 4.4: Exhibit 5


Test of Hypothesis 3
The correlational analysis between the belongingness towards the organization
and individual performance shows that the belongingness is not the significant factor in
affecting the performance as the correlation coefficient came out to be 0.035 and p value
of .671 which is greater than .01 makes it insignificant ( as depicted in the figure shown
below).
Hence, this hypothesis is not supported.

41

Correlations
Perf
Perf

Belongingness

Pearson Correlation

.035

Sig. (2-tailed)

Belongingness

.671

150

150

Pearson Correlation

.035

Sig. (2-tailed)

.671

150

150

Table 4.5: Exhibit 6


Test of Hypothesis 4
The correlational analysis between appreciation and performance depicted
that the more the appreciation received by the employee the more will be the effect of it
on performance. Therefore, appreciation is significantly related to performance with r
value of 0.477 and p value of .000 (p<0.01). Hence if the top management continues
to appreciate their employees for their good work, the performance of the employee
would be enhanced. The detailed result is depicted below:
Correlations
Perf
Perf

Appreciation

Pearson Correlation

Sig. (2-tailed)
N
Appreciation

Pearson Correlation

.000
150

150

.477**

Sig. (2-tailed)

.000

150

**. Correlation is significant at the 0.01 level (2-tailed).

Table 4.6: Exhibit 7


Thus, the hypothesis 4 is supported by the result.

.477**

150

42

CHAPTER 5: CONCLUSIONS & RECOMMENDATIONS

Summary of the Findings


The primary focus of this research study was to ascertain if a statistically
significant relationship exists between organizational climate and employee performance
as well as between employee attitude and employee performance. These two variables i.e.
organizational climate and employee attitude have additional factors to help define and
clarify the manner in which the research would be conducted. The survey questionnaire
used a Likert-scaled response system, questions that were mapped to each variable, and
factors for each variable.
From the research, we got to know that employee performance is enhanced by
having positive attitude, so it is necessary to have positive attitude to have the favorable
impact on the performance. On the hand, from the study it is depicted that the
organizational climate does not play the most significant role in affecting the
performance. In the organization in which the study is conducted, having positive attitude
is more essential than possessing a reasonable organizational climate.
The regression analysis results indicate that there is a significant and positive
relationship between service climate and employee satisfaction. The results show that
regression value is 0.379; R is 0.144 with p=0.000. This indicates that 14% of the
variance in the employee performance is explained by employee attitude and
organizational climate. Sufficient understanding of the employee needs will create
positive and superior attitude among the employees of the organization. The organisation
should not only focus on the external customers but also internal customers in catering to
all their needs and also creating the significant organizational climate.
Hypothesis 1 investigates the impact of collaborative climate on employee
performance.

43

The hypothesis predicts that once the organisation has a reasonable climate wherein the
employee can perform effectively and efficiently. Thus, it is believed that when the
employees are satisfied with the climate maintained by the organization, they will
perform better.
Hypothesis 2 investigates the relationship between role clarity & role ambiguity
and employee performance. This hypothesis predicts that more the clearer the role of the
employee is, the more will be the employees performance. The organisation, which
practiced all the dimensions, will lead to high employee performance.
Hypothesis 3 investigates the relationship between belongingness with the
organization and employee performance. This hypothesis predicts that once the employee
is satisfied with his work place and feels as if it is his own organisation then it will surely
affect the employee performance positively.
Hypothesis 4 investigates the relationship between appreciation given by top
management and its impact on the employee performance. This hypothesis states that if
the employee is appraised for his good work, he/she would be motivated and would
perform better.

Conclusion
For over 70 years, the attitudes-performance problem has been the subject of
much research in social sciences. Producer cooperatives and labor-managed firms have
also attracted much attention from scholars in various fields. This paper, a study of
attitudes-performance and climate-performance in a cooperative setting, is a contribution
to both of these important topics. By doing the statistical analysis, it was found that
employee attitudes can potentially help boost performance, and that employee attitudes
are not significantly related to belongingness but significantly related to appreciation.
Secondly, for the organizational climate, it was found that collaborative and role

44

ambiguity has significant impact on the performance whereas role clarity does not have
significant effect on the performance.
The results of this descriptive study revealed that employees perceptions of
attitude were significant and positively related to employee performance. The result also
indicates that organisation and employee performance is the main practices of the
organisation followed by employee loyalty and competitor orientation. The findings
suggest that organization should focus on making the climate helpful and friendly which
indirectly contribute to organizational enhanced performance which makes it competitive
in the business. Employee within the organisation should communicate to each other in
order to share the ideas or opinion regarding the current issues specifically about the
latest preferences service that is expected by the customers nowadays. This will much
assist the service organisation in order to create competitive advantage and have a
friendly environment internally.
As expected, the result suggested that employees attitudes towards their
workplace positively associated with their performance. That means employees with
more positive attitudes towards their workplace are more likely satisfied with their jobs.
Moreover, among the overall attitudes, employees perceived support from the
organization and their supervisor, the appraisal by supervisors were also strongly related
to their performance. In the study, it was expected that employees were positive towards
the climate also but this result was not supported.

Recommendations
The following are the recommendations that can be implemented taking into
consideration this particular research study:

Need Analysis- Leaders of the organization require formal and informal


education to understand the needs of the employees who work in the organization.

45

Leaders should evaluate internal resources and solicit the assistance of external
resources to understand the nuances of his or her area of responsibility.

Rigid Investigation- More specific investigation of the impact of climate should


also be performed because the nature of service provided and operational
differences of the each department may moderate the relationships between
climate and organizational performance

Cross Cultural Issues: The element of cross-cultural differences should be


investigated.

Regular supervision: Employee turnover is one factor that may be affected by


leaders not understanding the importance of an organizational climate. Continuing
to monitor and maintain a positive organizational climate could reduce attrition
within the organization, which could contribute to increases in organizational
efficiencies

Limitations
There are some limitations which are encountered during the research. They are as
follows:

The results of this study couldnt be generalized to all employees in the big social
context, and should be used carefully.

This research enables us to examine the correlations of each variable, but this
study has not taken the personality issues in exploring employees attitudes,
therefore we should be careful about attributing all the results to performance
itself.

There is no concrete basis to prove the response given is a true measure of the
opinion of all the employees as a whole.

46

The questionnaire contained mostly multiple-choice questions; therefore many

respondents may not have given a proper thought before answering the questions
The response of the respondents may not be accurate thinking that the
management might misuse the data

Most respondents might be influenced by their peers in answering the questions

Due to the fact that most of the respondents were young, the questions might not
have been answered with due sincerity

Another limitation is that this study only investigated the link between employee
attitudes, climate and performance. There are many other potential firm factors
that could have differential effects on employee attitudes - employee performance
relationship.

Implication for Practice


This study contributes to the recognition that the perception of organizational
climate shows variance between business units within a large organization, and that these
differences might have important financial consequences (Wright and Gardner 2002).
Although the variance in survey scales at the level of branch is rather limited compared
with the variance at the individual employee level, we found that these small differences
between business units preceded significant differences in business unit performance. At
the level of the business unit, the aggregated organizational climate survey scores can be
considered a thermometer with much narrower safety margins than those applying to the
individual measurement level. Additionally, we found no support that organizational
performance preceded climate scores. Therefore, this study confirms the usefulness of
including organizational climate data in balanced and or HR scorecards (Paauwe 2004) as
a parameter relevant for achieving future financial performance. Monitoring and
managing these differences in organizational climate scores is important for
organizations. After all, these factors are performance-stimulating factors with high
opportunity for control by line- and HR managers as compared to external factors, such

47

as conjuncture or market prices. So, it seems important to take into account


organizational climate information in future management decisions and the subsequent
shaping of HR-policies and practices.
The organizational climate dimension of task support might be conceptually more
adequately placed at the individual or job levels, instead of the branch level, and it might
be more related to other relevant organizational outcomes then productivity, like turnover
and or absenteeism. The climate dimension of socio-emotional support might be more
related to well-being outcomes. It might inform employees that their wellbeing and not
financial performance is the most important goal for their business unit, resulting in a
negative relationship with financial performance. So, it is important to investigate the
intervening processes whereby organizational climate affects organizational performance
e.g., the cognitive and affective states and salient organizational behaviors as suggested
by Kopelman et al. (1990). Moreover, more research is needed with regard to the impact
of specific organizational climate dimensions on parallel organizational outcomes as
recommended by Ostroff et al. (2003).
When a firm performs well and employees benefit from that success, it is easy to
see how those employees attitudes should be positive (or the reverse if a firm performs
poorly); however, those favorable attitudes should then translate into positive individual
behaviors that ultimately contribute to a firms success. Thus, organizations need to
constantly reinforce positive attitudes. As discussed earlier, the culture of the firm is the
ideal way to develop and strengthen those positive attitudes and behaviors and create a
climate for valuing human resources as encouraged by Schneider and his colleagues
(Schneider and Bowen, 1993; Schneider et al., 2003a; Schneider et al., 1994).

Implications for Future Research

More research is needed with regard to time aspects in the relationship between
organizational climate and performance. We applied a longitudinal design with repeated

48

measures of both organizational climate and performance and we used structural equation
modeling. However, apart from considering forward and inverse causation explanations,
we did not address the issue of which time lag is necessary for the proposed link between
the organizational climate and performance in much detail. The effect of organizational
climate on organizational performance might depend on the length of the time interval.
The true effect of substantial organizational climate changes may only be visible over a
longer period than the average two years in this study, since the stability of the
organizational climate scales and the business unit performance declines over time.
Another important area for future research could be to investigate the timing
sensitivity of the relationships explored in this study. There is no specific theory on the
lasting effects of attitude on performance. The relationships presented in this paper can
further analyzed and enhanced through the use of structural equation modeling to test the
model fit and established the causal relationships hypothesized. Future researchers may
also wish to gather data on service climate and organizational performance capability
from the sources other than employees, which may provide a degree of triangulation or
validity of the data.

REFERENCES
Journals:

49

Ahmad, Habib Ahmad, Khursheed Shah, Idrees Ali (2010) Relationship between Job
Satisfaction, Job Performance Attitude towards Work and Organizational Commitment
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Improve Establishment-Level Outcomes? NATIONAL BUREAU OF ECONOMIC
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Cascio, Wayne F(2006) The Economic Impact of Employee Behaviors on Organizational
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Cooke, William N. And Meyer, David G.(2011) The Effects Of Workplace Climates On
Employee Performance Capacities: A Knowledge-Based Perspective
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Heffernan, Margaret and Dundon, Tony (2012), Researching Employee Reactions to
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50

Johnson, Diane E (2009) Examining the Relationship between Employee Attitudes and a
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organizational climate, and firm performance: A study of multinational corporations in
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51

Riketta, Michael (2008) The Causal Relation Between Job Attitudes and Performance: A
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Voorde, K. Van De, Veldhovena M. Van and Paauwe, J.(2010) Time precedence in the
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Luu, Hieu (2011), The Relationship between Employee Attitudes and

Organizational Performance: Evidence from Cooperative Retail Stores


Raza, Syed Ahmad (2010) Relationship between Organizational Climate and

Performance Of Teachers In Public And Private Colleges Of Punjab


Putter, Lars (2010) The relation between organizational climate and performance

and an investigation of the antecedents of organizational climate


Spruill, Edric L.(2008) A Correlational Analysis Relating Organizational Climate
To Employee Performance: A Case Study

ANNEXURE: Questionnaire
Name:

Designation:

Contact No:

52

Please read this form carefully and give your sincere and honest feedback in five point
scale (Strongly Agree, Agree, Disagree, Strongly Disagree, No comment) whatever you
feel.

1. My company has a formal, written code of ethics.


Strongly Agree
disagree

Agree

Neutral

Disagree

Strongly

2. Rules and procedural climate affects performance positively.


Strongly Agree
disagree

Agree

Neutral

Disagree

Strongly

3. Both employees and management follows the code seriously.


Strongly Agree
disagree

Agree

Neutral

Disagree

Strongly

4. Top management in my company has let it be known the consequences of failure


to meet
the ethical standards of behavior.
Strongly Agree
disagree

Agree

Neutral

Disagree

Strongly

5. People, here are guided by their own personal ethics not by their organization.
Strongly Agree
disagree

Agree

Neutral

Disagree

Strongly

6. I receive incompatible requests from two or more people.


Strongly Agree
disagree

Agree

Neutral

Disagree

Strongly

53

7. I receive an assignment without the manpower to complete it.


Strongly Agree
disagree

Agree

Neutral

Disagree

Strongly

8. I receive an assignment without adequate resource and materials to execute it.


Strongly Agree
disagree

Agree

Neutral

Disagree

Strongly

Disagree

Strongly

Disagree

Strongly

9. Clear, planned goals and objectives exist for my job.


Strongly Agree
disagree

Agree

Neutral

10. I know exactly what is expected of me.


Strongly Agree
disagree

Agree

Neutral

11. I know how my performance is going to be evaluated.


Strongly Agree
Strongly disagree

Agree

Neutral

Disagree

Disagree

Disagree

12. There is a spirit of cooperation within my work group


Strongly Agree
Strongly disagree

Agree

Neutral

13. All ideas are freely exchanged within my work group.


Strongly Agree
Strongly disagree

Agree

Neutral

14. My work group coordinates its efforts with others which help in enhancing
performance.

54

Strongly Agree
Strongly disagree

Agree

Neutral

Disagree

15. I get the support from top management in dealing with the new ways of going
work
Strongly Agree
Strongly disagree

Agree

Neutral

Disagree

16. I am given the opportunity to work jointly with other people/work groups across
administrative lines and program areas.
Strongly Agree
Strongly disagree

Agree

Neutral

Disagree

Neutral

Disagree

17. This company is a great place for work.


Strongly Agree
Strongly disagree

Agree

18. I feel a sense of ownership for this organization rather than just being an
employee.
Strongly Agree
Strongly disagree

Agree

Neutral

Disagree

19. I would recommend others to join this company if given opportunity.


Strongly Agree
Strongly disagree

Agree

Neutral

Disagree

Disagree

20. The people I work with are very cooperative here.


Strongly Agree
Strongly disagree

Agree

Neutral

55

21. My manager cooperates & motivates me to do my best.


Strongly Agree
Strongly disagree

Agree

Neutral

Disagree

Disagree

22. Management tries to listen what employees are saying.


Strongly Agree
Strongly disagree

Agree

Neutral

23. My senior managers appreciate me whenever I do any good thing.


Strongly Agree
Strongly disagree

Agree

Neutral

Disagree

Disagree

Neutral

Disagree

Neutral

Disagree

24. Management considers employees hard work.


Strongly Agree
Strongly disagree

Agree

Neutral

25. My supervisor expresses confidence in me.


Strongly Agree
Strongly disagree

Agree

26. I receive quality feedback in my work.


Strongly Agree
Strongly disagree

Agree

27. I receive sufficient feedback in my work which aids in improving performance.


Strongly Agree
Strongly disagree

Agree

Neutral

Disagree

28. In my opinion, having positive or negative attitude towards work/organization


greatly

56

impacts the performance.


Strongly Agree
Strongly disagree

Agree

Neutral

Disagree

29. I think the more receptive employees to any change; the greater will be their
perceived
performance capacities.
Strongly Agree
Strongly disagree

Agree

Neutral

Disagree

30. My manager/supervisor provides coaching and/or guidance to help me improve


my
performance.
Strongly Agree
Strongly disagree

Agree

Neutral

Disagree