This study investigated the process by which employee perceptions of the organizational environment are related to job involvement, effort, and performance. The researchers developed an operational definition of psychological climate that was based on how employees perceive aspects of the organizational environment and interpret them in relation to their own well-being. Perceived psychological climate was then related to job involvement, effort, and performance in a path-analytic framework. Results showed that perceptions of a motivating and involving psychological climate were related to job involvement, which in turn was related to effort. Effort was also related to work performance. Results revealed that a modest but statistically significant effect of job involvement on performance became nonsignificant when effort was inserted into the model, indicating the mediating effect of effort on the relationship. The results cross-validated well across 2 samples of outside salespeople, indicating that relationships are generalizable across these different sales contexts.