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CEP discussion paper
Organizational Climate and Company Productivity: the Role of Employee Affect and Employee Level
M Patterson, P Warr and M West April 2004
Paper No' CEPDP0626:
Full Paper (pdf)

JEL Classification: M11; M12; J5; J24

Tags: organizational structure; organizational climate; employee welfare; manager; productivity.

Consistent with a growing number of models about affect and behaviour and with a recognition that perception alone provides no impetus for action, it was 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 company¿s climate were significantly more positive than those of non-managers.