How Leaders Can Influence Workplace Climate

October 17, 2018

How Leaders Can Influence Workplace Climate

The Fall 2018 issue of People + Strategy focuses on living better to lead better. This blog post intended to further the conversation on what it means to change the way we work, live, and engage with our workplace lives.

We’ve been taught since childhood to “lead by example”, but does this maxim apply to company leaders? And is it effective in creating a healthy workplace climate? In short, yes and yes, and the reasons why concern group dynamics and social identities. 

In any workplace, many commonalities exist among all employees. One such characteristic is a shared sense of identity as members of the company. This common identity helps secure the group’s cohesiveness and its perception towards its leaders. Company leaders are often viewed as the embodiment of the common identity and organizational values; they become the prototype of what it means to be a member of that company. Leaders represent the ideal for employee behavior and are the yardstick for the group’s norms (Hogg & Terry, 2000). These statements are supported by the social identity theory of leadership, which states that leaders influence what members see as prototypical or normative behavior desired by the group (Hogg, 2001). The examples that leaders set direct group behavior. Leading by example, therefore, is supported by psychological theory and research. 

Being seen as prototypical is not the only influential characteristic leaders can have in their toolbox. Leaders can have influence through interpersonal relationships with their employees and by showing fairness (Hogg et al., 2005; Ullrich, Christ, & van Dick, 2009). Regardless of how leaders establish their leadership, favorable leaders have the power to influence and change the team’s climate. If leaders are respected, teams will follow the example of the tone they set. People look to their leader to reference appropriate or normative behavior, and their collective behaviors make up the workplace climate. 

Climate Changes
If leaders want to improve their company’s workplace climate, they first need to know the related factors and how their teams fair on each. Workplace climate is a comprehensive measure that includes company culture and employee wellbeing. Employee wellbeing is a concept growing in popularity among employers because of its predictive quality in worker productivity, turnover savings, benefits to cost management, and superior financial performance (Carver, Davenport, and Nyce, 2015). It is a comprehensive approach to employee health and productivity, including elements of emotional and mental health, interpersonal interactions (including harassment), and safety at work. 

Minnesota Workplace Wellness Assessment ℠ data from 888 adults in the US measured seven factors related to workplace climate, as well as two major outcomes: Wellbeing at Work and Wellbeing at Home. These data indicate that Wellbeing at Work can be predicted (in order of strength of relationship) by the related factors of Fairness, Resources, Involvement, Teamwork, Engagement, Leadership, and Opportunity (Colihan and Schulzetenberg, 2018). These drivers of workplace wellbeing are relevant to team members and leaders alike. If the company leader is struggling with burnout, low life satisfaction, sleep deprivation, or inability to relax (all components of wellbeing at work and home), the wellbeing of their employees will be affected. Group leaders are seen to be prototypical; therefore, setting the example by living a well-balanced life defines the company’s values on wellbeing and fosters a healthy workplace climate. 

Also important for workplace wellbeing is egalitarian treatment. How employees feel about the level of fairness in the workplace is the strongest driver for wellbeing at work. Fairness is directly impacted by the leader’s equitable treatment and respect for workers. This includes creating an environment where employees feel they can raise concerns without retribution. Enter the #MeToo movement. As evidenced by recent headlines of sexual harassment victims finally breaking their silence, there has been an onslaught of exposure linking sexual harassment to systemic problems in workplace norms and practices. Leaders who don’t encourage open communication by setting a precedent of reporting misconduct or harassment send messages to victims that they should stay quiet. When people at the top fail to create an environment where employee wellbeing is one of the company’s top priorities, workplace climate suffers. Since the leader is seen as the example to follow, leaders who engage in unfair practices will see trickle-down effects to poor wellbeing at work; likewise, displays of fairness, openness, and trust will reverberate throughout the organization. 

Mean Wellbeing at Work by Perceptions of Fairness

My Organization Treats Me Fairly Mean Wellbeing at Work
Strongly Agree 73
Agree 65
Neither Agree nor Disagree 55
Disagree     50
Strongly Disagree 39

Research has found a major impact on perceptions of fairness and wellbeing at work (Colihan & Schulzetenberg, 2018). Mean scores of wellbeing at work were 87 percent higher for workers who strongly agree compared to workers who strongly disagree that their organization treats them fairly. Fairness has profound implications for organizational success through improved productivity, positive citizenship behaviors, teamwork, and retention of talent. Many leaders might profess that “of course, my workplace is fair,” but 1 in 4 employees reported experiencing harassment at work, clearly leaving room for improvement in professionalism and fairness. 

Show Humanity
Both cultivating a healthy workplace climate and earning the respect of workers starts with trust. One way to build trust as a leader is to show vulnerability as a person. Emotional openness, when expressed positively, can result in mutual trust because people can relate to each other and see each other’s humanity. For example, by sharing personal stories or insecurities, feelings of respect, understanding, and trust can be developed regardless of job title. Being open requires setting aside one’s ego and fears. An example of how one leader built trust through openness comes from a client of one of the authors of this post: 

I used to coach a CEO of a large grocery distribution company. He had been widely successful and known as the go-to, fix-it CEO in that industry. He would be brought into crumbling companies where other leaders had failed. Executive boards and shareholders would place immense pressure on him to turn the company around by whatever means necessary. He was, many times, their final attempt before shuttering the doors. This amount of stress would have transformed a lesser leader into a cut-throat penny-pinching boss-zilla. Instead, he would spend his early months talking with the line workers, administrators, truck drivers, and other lower level employees, in addition to the more senior level employees. He shared stories of how he started as a poor grocery bagger in a small town in rural Tennessee and was ostracized by his peers because he came from a broken and impoverished family. He was open about how he never went to college and barely finished high school. He admitted that he didn’t know the all “fancy” words or understand the equations his financial advisors computed. By taking the time to connect and show his vulnerability to his employees at every level, he cultivated an environment of trust and safety. He was the to first to risk vulnerability and do something that felt unsafe. This set a climate of honesty and trust in every company he led. 

Tight Lips Sink Ships 
The antitheses of openness and trust in the workplace is a climate based on fear, secrecy, and feigned concern. Leaders who are preoccupied only with the bottom line and fearful of showing an ounce of vulnerability will negatively impact their employees’ wellbeing at work. Disconnected and distracted leaders help create a workplace environment that discourages—or even penalizes—people for raising questions, proposing new ideas, or reporting harassment. Lencioni (2012) describes a CEO he worked with who charged out of a meeting where difficult issues were finally being raised, saying “I don’t have time for this.” His extreme discomfort with conflict communicated that employees might be better off keeping comments to themselves. 

The good news is that a leader has influence over the climate of their company. As eloquently stated by Ghandi, “If we could change ourselves, the tendencies in the world would also change. As a [person] changes [their] own nature, so does the attitude of the world change towards [them].... We need not wait to see what others do.” Leaders must first address their own attitudes and behaviors before asking others to change theirs. Lead by example. Be open, be fair, and be well; others will follow. 


  • Carver, K., Davenport, T. O., & Nyce, S. (2015). Capturing the value of health and productivity programs. People & Strategy, The Professional Journal of HRPS, 38(1).
  • Colihan, J., & Schulzetenberg, A. (2018). Minnesota Workplace Wellness Assessment.
  • Hogg, M. A. (2001). A social identity theory of leadership. Personality and social psychology review, 5(3), 184-200.
  • Hogg, M. A., Martin, R., Epitropaki, O., Mankad, A., Svensson, A., & Weeden, K. (2005). Effective leadership in salient groups: Revisiting leader-member exchange theory from the perspective of the social identity theory of leadership. Personality and Social Psychology Bulletin, 31(7), 991-1004.
  • Hogg, M. A., & Terry, D. J. (2000). Social identity and self-categorization processes in organizational contexts. Academy of Management Review, 25(1), 121–140. 
  • Hogg, M. A., van Knippenberg, D., & Rast, D. E. (2012). The social identity theory of leadership: Theoretical origins, research findings, and conceptual developments. European Review of Social Psychology, 23(1), 258–304.
  • Lencioni, P. (2012). The advantage: Why organizational health trumps everything else. Jossey-Bass, San Francisco, CA. 
  • Ullrich, J., Christ, O., & van Dick, R. (2009). Substitutes for procedural fairness: Prototypical leaders are endorsed whether they are fair or not. Journal of Applied Psychology, 94(1), 235.
The Authors: 

Anthony J. Schulzetenberg, M.A., is a Ph.D. student in Educational Psychology at the University of Minnesota.

Joe Colihan, Ph.D., is the owner and founder of Colihan Consulting.