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    Organizational justice and turnover in public accounting...
    research summary posted May 3, 2012 by The Auditing Section, last edited May 25, 2012, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale 
    Organizational justice and turnover in public accounting firms: A research note
    Practical Implications:

    The results of this study are important for audit firms to consider when designing their employee evaluation processes which determine promotions and pay increases.  The evidence indicates that if employees perceive that the process is unfair and biased, they will be less committed to the accounting firm and that they will experience lower levels of job satisfaction.  The evidence also suggests that as employees experience lower levels of commitment to the accounting firm, they will be more likely to consider exploring employee opportunities outside of the accounting firm. Therefore, the authors suggest that accounting firms may be able to partially increase employee commitment to the firm by maintaining a fair process for determining promotions and pay increases, and this increase in commitment may result in decreased turnover.


    Parker, R. J. and J. M. Kohlmeyer III. 2005. Organizational justice and turnover in public accounting firms: a research note. Accounting, Organizations and Society 30 (4): 357-369

    Perceived discrimination, job satisfaction, staff promotion and compensation, organizational justice, organizational commitment, turnover intentions
    Purpose of the Study:

    This study considers the relationship between “organizational justice” which is employees’ perceptions of how fairly they are being treated by their employer and “turnover intentions” which refers to employees’ intentions to leave their existing employer.     

    Even though previous research conducted within the management discipline has considered the effects of employee perceptions of organizational justice, very little research has been conducted on organizational justice in accounting settings.  Therefore, the authors developed a theoretical model that could explain how organizational justice and turnover intentions could impact a public accounting firm.  The theoretical model predicts that employees who perceive the firm’s process for determining promotions and raises to be biased will experience higher levels of “perceived discrimination” which, in turn, leads to lower levels of job satisfaction.  These individuals should also experience lower levels of “affective organizational commitment,” which can be described as the following: 

    • A strong belief in the goals or values of the organization
    • A willingness to exert effort for the organization
    • A strong desire to continue to be part of the organization 

    The authors also consider that lower levels of job satisfaction and organizational commitment will be associated with higher levels of turnover intentions. 

    Design/Method/ Approach:

    The research evidence is collected prior to 2005.  The authors use a group of accountants from offices of three Big 5 firms in one Canadian metropolitan area.  Participants completed a survey which was distributed by a representative from each of the firms.  The surveys utilized to gather the data were based on surveys that were previously developed and utilized in conducting similar research in other disciplines.

    • The authors find that increases in the level of perceived discrimination is associated with lower levels of job satisfaction and lower levels of organization commitment. 
    • The authors find that lower levels of organizational commitments are associated with greater employee turnover intentions.  However, changes in the level of job satisfaction are not associated with changes in employees’ intentions to leave the firm.


    Audit Team Composition
    Staff Hiring - Turnover & Morale
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