The main objective of the research to find out existing institutional functioning and situation of higher education institutes was to find out and compare the perceptions of teachers and students about institutional climate and its efficiency. The study was descriptive in nature with quantitative approach. Survey method was considered appropriate for collecting the desired data for quantitative study. The tool was prepared to cover the dimensions of planning and management, institutional climate, cost effectiveness, institutional integrity in higher education institutions. While the required data obtained vi questionnaires. The study population include all the students of the higher educational institutions of the Punjab. Stratified sampling was used. The collected data was analyzed quantitively. In quantitative analysis researcher used descriptive statistics, while t-test and correlation were used. results of the study revealed that many factors had great influence for institutional climate like planning and management, integrity of the members of the institute’s environment and cost effectiveness. The study may provide criteria to track the environment and effectiveness of higher education institutions either public or private. Additionally, studies can be conducted on larger scale to maintains/model / standards for the effectiveness of the higher education institutions.