Psych Educ, Document ID: 2022PEMJ0, doi:, 10.5281/zenodo.

7183054 ISSN 2822-4353

Research Article

Agreement and Importance of Organizational Climate on Employee Engagement in a

Privately-Held Company in the Retail Hardware Industry of Cebu City
Wincel Joy Z. Simbajon*, Mark Anthony N. Polinar, Alexander Franco A. Delantar
For affiliations and correspondence, see the last page.

Abstract
An environment that is both positive and productive at work is essential to the organization's success. A healthy and
positive work environment increases employee engagement and a sense of purpose. The study looked at the current
organizational climate and employee engagement of a privately held company in the Cebu City retail hardware
industry. A descriptive- correlational method was used to evaluate the variables and their associations. For a smaller
population, Cochran's sampling method yielded 52 respondents. The weighted mean and Pearson correlation
coefficient were used for the study's data analysis. According to the results, respondents strongly agreed and
regarded their organizational climate as very important, with a weighted mean of 3.26 and 3.40, respectively.
Additionally, respondents strongly agreed that the organization gave employee engagement a high priority. All
relationships considered for the study correlate, as indicated by Pearson r. The researchers concluded that
employees perceive their workplaces as healthy, which leads to positive employee engagement. The study also
provided several recommendations to improve the organizational climate, employee engagement, and new research
directions for academics.

Keywords: organizational climate, employee engagement, privately-held company, retailhardware industry,

Cebu City

Introduction Manila Bulletin (2022), 4.6 million workers in the

“To win the marketplace, you must first win the
workplace.” as per Doug Conant, CEO of Campbell’s
Soup (2020). A healthy and positive workplace is vital
in ensuring employees’ well-being. As per the World
Health Organization (2009), a healthy workplace is
one where rank-and-file employees and managers
collaborate to continually refine the health and safety
of all people and, by doing this, sustain the business's
productivity. A healthy and positive workplace ensures
that employees are well-valued and as crucial as
valued customers, regardless of the industry.
Nevertheless, organizations must first understand their
employees’ perceptions and experiences of their work
environm en t. According to Tahir (2020),
organizational climate is a solid barometer for judging
employees' sentiments about their employer's policies
and practices. Using organizational climate as a
barometer, a company's current policies and
procedures will be more strategically aligned with the
organizational goals and objectives and increase
employee engagement in the workplace.
Organizational climate is the employees' mental
impression of the company. Climate focuses on the
organization's attributes as perceived by the employees
(Castro & Martins, 2010). Employees who perceive
the present climate as terrible intend to leave the
organization and look for other employment
opportunities. In a recent study published by the
Philippines quit their jobs voluntarily across all
industries and are labeled "The Great Resignation."
The current phenomenon, the Covid-19 pandemic, is
the main factor that adversely affects the workers'
mental health, leading them to leave the organization.
Another survey indicated that 25% of the employees
believed that their employers provide good support for
mental health conditions (Aetna International, 2020).
Also, 38.5% of the respondents have lied to their
employers about their reasons for taking a sick day.
Therefore, the figures showed employers' inferiority in
prioritizing their employees' mental health conditions.
Poor mental health shifts the employees' perception
from excellent to poor, creating a bad organizational
climate that affects employee engagement. To boost
productivity, organizations should deeply understand
the attitude and behaviors of their employees to
enhance employee engagement and achieve
organizational commitment.
In this study, the researchers aim to examine the
organizational climate on employee engagement of a
privately-held company in the retail hardware industry
in Cebu City. The prominent researcher, who served as
an employee engagement officer, wants to contribute
to the company to enhance the existing climate of the
organization and align it to strengthen employee
engagement. Also, the proposed recommendations
crafted by the researchers will help the selected
company's best assets, the employees, to be more
engaged in the firm’s strategy to achieve

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organ izatio nal goals and o b jectives.
Research Questions
The study aimed to examine the current organizational
climate that the employees perceived and assess if it
influences employee engagement. The research
empirically sought to provide answers to the following
questions:
1. What is the degree of agreement and importance of
rank-and-file employees to the organizational climate
in terms of the following factors:
1.1 Role Clarity;
1.2 Respect;
1.3 Communication;
1.4 Reward System;
1.5 Career Development; and
1.6 Planning and Decision Making?
2. What is the degree of agreement of rank-and-file
employees to employee engagement concerning the
following factors:
2.1 Praise;
2.2 Persist;
2.3 Perform; and
2.4 Perfect?
3. Is there a relationship between:
3.1 Degree of agreement and Degree of the
importance of organizational climate;
3.2 Degree of agreement of organizational climate
and degree of agreement of employee engagement?
3.3 Degree of the importance of organizational
climate and degree of agreement on employee
engagement?
4. What recommendations should be crafted by the
researchers based on the study?
Literature Review
The following sub-headings houses contemporary
pieces of literature and empirical evidence that pertain
to organizational climate and employee engagement.
Organizational Climate
Understanding the organizational climate is one of the
many aspects that must be considered across all
industries. Organizational climate affects employees'
mood, attitude, and behavior towards their work
environment (Abdulkarim, 2013). Motivated
employees are goal-driven and enthusiastic.
Employees with a high level of motivation tend to
work productively to produce and increase revenue.
Additionally, an organization with a favorable climate
Simbajon et al.
often results in a healthy work environment which
affects employee efficiency. Organizations nowadays
consider a comfortable working atmosphere and a
healthy working environment to increase job
satisfaction, employee retention, and organizational
commitment.
Several studies claim that organizational climate is
vital to employees’ satisfaction and productivity.
Employees working in a suitable organizational
climate are most likely to be satisfied and engaged
(Morris & Bloom, 2002; Schaufeli, 2016; Albercht et
al., 2018). Hamidianpour et al. (2015) argued that the
organizational climate positively impacts employee
creativity in small and medium-sized enterprises. In
addition to the researchers’ argument, a thorough
understanding of the organizational climate enables
managers to strategically manage their workforce and
bring out creativity. Viitala et al. (2015) also stated
that a strong relationship exists between the
organizational climate and employees' well-being and
work engagement. Engaged employees are enthusiastic
and have high levels of energy doing their job, as per
the researchers. The study by Rozman et al. (2020)
indicated that stress hurts employee relationships in
the workplace and employee satisfaction. With this,
scholars believe it is vital for an organization to
determine ways to lessen anxiety. Moreover, stress in
the workplace is related to absenteeism, tardiness,
lower productivity, engagement, and morale.
Employee Engagement
Employee engagement is more than the physical
presence of employees in the workplace. It is not only
about attendance but is more about the emotional,
cognitive and psychological attachment to the
organization. Engagement is an employee's right
attitude toward the organization and its values
(RobinsonS et al., 2004). Furthermore, engaged
employees are dedicated and willing to go the extra
mile for the company. Their efforts are visible in their
output and performance.
Same with organizational climate, there is
considerable evidence generated by different scholars
that centers on employee engagement and how it
improves work performance. Abun et al. (2021)
conducted a local study on organizational climate and
employees' work engagement in an Ilocos region
school. Using Pearson r, the data showed that
organizational climate significantly correlates with
working engagement. It indicated that the higher the
organizational climate perceived by employees, the
higher their work engagement. With that, the
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researchers concluded that the school's management
works closely on refining the organizational climate so
that employees will be more engaged in their work,
improving the school's performance. Another study
indicated that engaged employees show loyalty and
commitment and exert more effort in doing the job
(Robertson-Smith & Markwick, 2009). Also,
employees spend more or less 8 hours at the
workplace, so it is not surprising that the employees'
mental health will be affected by the work
environment, as per the researchers. In contrast, the
dissertation of Mejalli (2020) found that organizational
climate does not correlate with employee engagement
in nonprofit organizations, as indicated in the first part
of the research objective. The study implies that the
two variables have no association and that the
improvement of one variable will not matter to the
other variable.
Methodology
Research Design
This study used the descriptive-correlation
methodology. Simply put, this design described the
features of individual variables as they appear in a
natural situation (Gravetter et al., 2009). The potential
for the two components under examination to interact
was looked into. This study used quantitative data to
investigate a non-causal comparative approach.
Research Participants
Rank-and-file employees currently working for the
chosen privately held company in Cebu City were the
participants. The study enrolls 52 people using
Cochran's formula for a smaller population. The
researchers’ procedure had a 5% margin of error and a
95% confidence level. The researchers' Z value is 1.96,
based on the 95% confidence interval. The study's
main participants included accounting staff, audit staff,
office workers, purchasing clerks, customer service
representatives, and administrative staff.
Inclusion-Exclusion Criteria:
The following are the inclusion-exclusion criteria
formulated by the researchers:
1. Bonafide rank-and-file employees of the selected
privately-held company;
2. Regular position;
3. Must have a tenure of at least one year (1); and
4. Voluntarily participate in the data gathering.
Simbajon et al.
Instruments of the Study
The two (2) components of the instruments taken into
consideration in this present study are quantitative
(used questionnaires). The following are the crucial
details about the tools used in the study:
Part I: The Degree of Agreement and Importance of
Organizational Climate
The study by Adrian Furnham and Leonard D.
Goodstein, The Organizational Climate, published in
1997, served as the inspiration for the tool used to
measure the degree of agreement and significance of
organizational climate (OCQ). The researchers
updated the current tool by leaving out several vital
components and reducing the number of items per
variable to just five.
Part II: Degree of Agreement of Employee
Engagement
The researchers adopted the survey question bank
from Genos as the second part of their study on
employee engagement. Genos provides top-notch
assessments and training courses in employee
motivation, emotional intelligence, and organizational
performance.
Data Gathering Procedures
The primary researcher contacted the dean of the
College of Management, Business, and Accountancy
(CMBA) at Cebu Institute of Technology- University
to perform this study. The prominent researcher is
currently enrolled in the MBA program. After the
request was granted, the primary researcher sent a
second letter to the company involved in the study
asking for authorization to conduct the actual research.
The required health regulations were scrupulously
followed in data collection because we are currently
experiencing a global health pandemic. The prominent
researcher used Google Forms to send questionnaires
to lessen the risk that the target participants would
contract the Covid-19 virus. This was done because of
the ongoing global health pandemic and compliance
with the company's policy despite the local
government's existing regulations.
Ethical Considerations
Ethics has been a foremost aim throughout this
research, especially while gathering data. The
researchers applied the non-discrimination, social
responsibility, openness, and child welfare principles.
The researchers must remain impartial when
performing a study survey, including giving out
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questionnaires, to avoid being overly influenced by his Table 2. Respondents’ Degree of Agreement of
d e s i r e s , f e e l i n g s , or a f f i l i a t i o n s . The Employee Engagement
researchers ensured that this study greatly affected the
environment's employees by increasing understanding
of the aspects taken into consideration and presenting
its significant advantages.

Once all implied consent had been received, each

participant was adequately informed about the
researchers' identity, the importance of the study, and
its justification. The researchers thoroughly discussed
the importance of the participant's role and all the
Pearson Correlation Coefficient Analysis
anticipated benefits of the study. The conversation also
addressed the participant's freedom to leave the study
Table 3. Summary of the Results of Pearson
anytime.
Correlation Coefficient Analysis

Results

This section unveils the findings based on the study’s

research questions. To examine the degree of
agreement and importance of the variables under
organizational climate and the degree of agreement of
the indicators under employee engagement, a weighted
mean was utilized in the study. To further analyze the
data, Pearson Correlation Coefficient was employed in
the study using Minitab.

Respo ndent s' Degree of Agreement and Discussion

Importance of Organizational Climate and Degree
of Agreement on Employee Engagement
This part comprises the different tables for the degree
of agreement and importance of organizational climate
and degree of agreement of employee engagement. It
includes two tables; Table 1 shows the respondents’
answers on the degree of agreement and importance of
organizational culture. Table 2 presents the
respondents’ responses to the degree of agreement
with employee engagement.
Table 1. Respondents' Degree of Agreement and Importance of
Organizational Climate
The study aimed to examine the degree of agreement
and importance of organizational climate and degree
of agreement on employee engagement. Also, the
relationship between the variables used in the study
was investigated.
Table 1 presents the respondents’ degree of agreement
and the importance of organizational climate. Also,
table 1 shows the overall mean of the indicators,
interpretations, and the grand mean. In general, the
grand mean of 3.26 on the degree of agreement and
3.40 on the degree of importance indicate that
respondents strongly agreed and perceived the high
importance of organizational climate. The study by
Motyka (2018) stressed that low-level work
engagement is one of the causes of economic problems
in the world. There exists a significant relationship
between the dimensions of organizational climate and
the measures of employee engagement (Clement &
Eketu, 2019). It was found in the study that rewards
affect employee engagement. Companies recognizing
and rewarding their employees for good performance

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increase employee engagement. This implies that
organizational climate should be given more attention
as it positively predicts employee engagement.
Further, the study of Hassanin and Ghanem (2019)
emphasized the correlation and strong influence of the
organizational climate level on employees' job
engagement. Improving the organizational climate
resulted in the reduction of absenteeism and leaves at
work, an increase in productivity, and better service
Table 2 unveils the result of the respondents’ degree
of agreement on employee engagement. The table
presents the overall mean of the variables,
interpretation, and the grand mean. The grand mean of
table 2 is 3.51 with an interpretation of strongly agree.
It implies that respondents of the privately-held
company strongly agree that they are engaged with the
company in achieving its goals and objectives.
Employee engagement improves employee
commitment to the organization and job involvement.
Engaged and motivated employees work together to
achieve organizational goals (Parishad, 2013).
Engaged employees are assets to the company as they
contribute their knowledge and skills to help it achieve
its goals. Employee job engagement was significantly
predicted by the perception of organizational climate
(Koch, 2013). Employee engagement enhances
productivity, profitability, and customer satisfaction
(Tanwar, 2017). An organization can strengthen
employee engagement by providing information, top
management support, and aligning efforts with
strategy. With this, organizations should consider
strategies in human resources to engage their
employees effectively. The high levels of trust and
cooperation experienced by employees made them
more engaged in their job roles. Employees who feel
positive in their work environment are more active and
less stressed. According to the study by Chakraborty
and Ganguly (2019), a positive work environment
affects employees' well-being, productivity, and
engagement. There is a connection between employee
engagement and business results. Therefore, employee
engagement is also connected to employee attitude,
intentions, and behaviors. In the study of Osborne and
Hammoud (2017), implementing successful employee
engagement strategies is critical to organizational
success. With this, leaders must be fair, build trust,
demonstrate respect, and be active listeners to
understand the employees' concerns (Osborne &
Hammoud, 2017). Therefore, leaders must consider
strategies that improve employee engagement and
profitability.
Table 3 shows the summary of the results of the
Pearson correlation coefficient of the study. The result
Simbajon et al.
from the first part of Table 3 reveals the correlation
coefficient from the Pearson’s R Test between the
degree of agreement and the degree of the importance
of organizational climate in a privately held company
in the retail hardware industry in Cebu City is 0.525.
This suggests that there is a moderate positive
correlation between the two variables. Since the p-
value is lesser than a=0.05, the null hypothesis is
rejected. This means a significant relationship exists
between the degree of agreement and the degree of the
importance of organizational climate. The result
gathered from the sample shows that respondents with
a higher degree of the agreement also had a higher
degree of the importance of organizational climate.
This positive direction of correlation implies that these
two variables are directly proportional to each other.
This means that when the degree of agreement of the
respondent is higher, the degree of importance is more
elevated.
The second portion of table 3 below reveals the
relationship between the degree of agreement of
organizational climate and the degree of agreement of
employee engagement in a privately held company in
the retail hardware industry in Cebu City. The Pearson
correlation coefficient r between the degree of
agreement of organizational climate and the degree of
employee engagement is 0.768 with a p-value of
0.000, implying a high positive correlation between
the two variables. Since the p-value is lesser than
a=0.05, the null hypothesis is rejected. This means a
significant relationship exists between the degree of
agreement on organizational climate and the degree of
agreement on employee engagement. The result
gathered from the sample shows that those respondents
who had a higher degree of agreem ent on
organizational climate also had a higher degree of
agreement on employee engagement. This positive
direction of correlation implies that these two variables
are directly proportional to each other. This means that
when the degree of agreement with the respondent's
organizational climate is higher, the degree is
increased.
The third part of table 3 indicates the relationship
between the degree of the importance of organizational
climate and the degree of agreement of employee
engagement in a privately held company in the retail
hardware industry in Cebu City. It can be seen from
Table 3 that the Pearson correlation coefficient
r between the degree of the importance of
organizational climate and the degree of agreement of
employee engagement in a privately held company in
the retail hardware industry in Cebu City is 0.485 with
a p-value of 0.000. Thus, it is significant at a 0.05
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significance level because of the p-value of (0.00) <
(0.05). The result gathered from the sample shows
that respondents with a higher degree of the
Importance of Organizational Climate also had a
higher degree of agreement on employee engagement.
This positive direction of correlation implies that these
two variables are directly proportional to each other.
This means that when the degree of the importance of
the organizational climate of the respondent is higher,
then the degree of agreement on employee engagement
is increased.
Conclusion
On a final note, the researchers of the present study
conclude that the rank-and-file employees in a
privately-held company in Cebu city strongly agreed
and perceived the high im por tan ce of the
organizational climate. On the other hand,
communication as a critical variable in organizational
climate resulted in moderate agreement and
importance. Also, the study highlighted that
respondents strongly agreed that employees in the
company were seriously engaged with an intention to
achieve goals and objectives. Additionally, the study
revealed that all the relationships considered resulted
in a positive correlation. This implies that when the
respondents perceive a positive and healthy
organizational climate, they tend to be more engaged
in the organization, especially in achieving its goals
and objectives. Apart from this, communication, as per
the results, is considered a variable that needs to be
enhanced by the management since it is crucial to the
organization in building trust which leads to boost
engagement within the workplace.
Furthermore, in light of the factual findings, it is
desired that the organizational climate on employee
engagement from the respondents' point of view will
refine with the recommendations developed by the
researchers that serve bridge in addressing the gaps
identified in the study.
Based on the findings, the researchers crafted the
following recommendations to strengthen the
organizational climate on employee engagement in a
privately-held company in Cebu City: The
organization should elevate communication within the
organization as it was found to be moderate in the
findings. This includes open communication between
employees and their immediate heads. With this,
employees will know what is expected of them at
work. It also allows employees to voice their opinions
and participate in some of the organization’s planning
Simbajon et al.
and decision-making, showing intermediate results.
Employees feel engaged as their opinions and
suggestions are heard by the management.
Communication includes constant and informal
feedback to check employees, appraisal tools, opinion
polls, and surveys to listen to employees’ sides. In
addition, providing recognition and rewards also
promotes a positive organizational climate. Employees
will feel that their excellent work is being recognized.
This includes small gifts, thank you notes, free meals,
monetary compensation, or posted on bulletin boards.
With this, they will continue doing the job well.
Employees will be motivated to work and are willing
to go the extra mile for the company. The management
should understand that investing in their employees
through rewards is a way to boost employee
motivation which results in good business
performance. Finally, for future scholarly studies, the
researchers suggest adding the demographic profile of
the respondents and testing if the factors under
demographic will be significantly associated with the
employees’ long-lasting perception working
environment that represents organizational climate.
Expanding the present study by selecting two or more
entities would be fruitful to the discipline's body of
knowledge. Moreover, replicating the present study in
applying it in a different setting is also recommended
by the researchers.
Acknowledgement
This current study will not be made without the
presence of valuable people. To Dr. Mark Anthony N.
Polinar, the prominent researcher's research adviser,
for his unending support throughout the journey, and
his enthusiasm for teaching and willingness to share
his knowledge greatly aided the main researcher in
making the study successful. The main researcher also
expresses gratitude to Dr. Alexander Franco A.
Delantar, the college dean of the College of
Management, Business and Accountancy (CMBA), for
his approval and unconditional support. Ms. Lady Vi
B. Costas, MEd, the study’s statistician, expertly
provides her valuable insights and results of the
statistics that make the study more worthy to the
readers. Many thanks and appreciation also goes to the
family and friends of the main researcher for their
constant help and understanding throughout this
research process. The researchers would also like to
sincerely acknowledge the contribution of the rank-
and-file employees of the retail hardware who
voluntarily participated in the study. Last but not least,
the main researcher would like to give the highest
praise to our loving God for the wisdom he has
bestowed upon us all, as well as for providing
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Affiliations and Corresponding Information
Wincel Joy Z. Simbajon
Cebu Institute of Technology - University
Mark Anthony N. Polinar, DBA, CHRA, CB
Cebu Institute of Technology - University
Alexander Franco A. Delantar, DM, JD, MEd
Cebu Institute of Technology - University

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