organizational behaviour A large unit manufacturing goods which has been known for its liberal personnel policies and fringe benefits is facing the problem of low productivity and high absenteeism . How should the management improve the organizational climate?  

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Did the perks diminish or were they taken away completely? If they're gone, you might want to try reintroducing them on a performance-based scale. That might salve some hurt feeling and encourage people to be more productive in order to get their perks back.
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It should not change the climate without first determining if that climate is really to blame for the problems.  If it simply starts to enforce a harsher management style it could be counterproductive if there is some other reason (poor organization, for example) for the low productivity.  When changing the culture of an organization, one must be very careful to be sure it is necessary.

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