Behavioral effects of fairness in performance measurement and evaluation systems: Empirical evidence from France

The measurement and evaluation of employee performance are crucial aspects of the management accounting system because of their effects on employee motivation. It is therefore important for management accountants to understand how such effects occur. Fairness may be a key explanatory factor. This study proposes that the effects of the fairness of employee performance measurement and evaluation procedures on employee job satisfaction and organizational commitment are indirect. The results, based on a sample of 60 French managers, support these expectations. For the relationship between procedural fairness and job satisfaction, the effects are indirect through trust and fairness of outcomes. For the relationship between procedural fairness and organizational commitment, the effects are indirect through fairness of outcome, trust and job satisfaction. The results also indicate that affective effects through trust and satisfaction are substantially stronger than that through fairness of outcome. Fair performance evaluation procedures therefore do more than the mere provision of equitable outcomes among French managers.     

Trust in,trust out: a real cost of sudden and significant financial loss

This study examines the loss of trust that occurs when individuals suffer from sudden and significant financial loss. We use a qualitative case study to show that individuals lose trust in a range of parties, including financial advisors, banks, credit providers, government and perhaps most damagingly of all, oneself. Such outcomes are concerning as all financial services are based on trust between various parties, and trust is important in making financial decisions. A lack of trust can lead to poorer individual and societal outcomes. It also suggests that trends to financial self‐sufficiency have risks, which impact well beyond monetary losses.     

Trust and distrust in a network-style organisation: GPs’ experiences and views of a Scottish local healthcare co-operative

This paper considers the conditions needed for an organisation to function as an effective network. In particular, the concepts of trust and distrust are explored. Looking at the new labour reforms of 1997, evidence is presented by means of interview responses from GPs, that this powerful group in primary health care lacked sufficient trust in health care managers. In fact GPs seemed to often distrust them. It is unlikely, therefore, that a Scottish local health care co-operative, created as a result of the 1997 reforms to act as an interface between GPs and health care managers could be effective in allocating health care resources. As a result, the reforms did little to improve primary health care services in Scotland despite the increased funding allocated over recent years to this sector.     

Relationship marketing in the financial services industry: The importance of customer education,participation and problem management for customer loyalty

The effectiveness of relationship marketing efforts in services selling is to a large extent dependent on customers' commitment to increase the depth and breadth of their relationship with the organisation. In this study, we seek to extend current thinking by presenting a model that examines the relative importance of customer education, participation and problem management in driving customer loyalty. To test the relationships between these variables, we use data collected from 1,268 clients of a global financial services firm. Overall, the results support the hypothesised model and show customer education to be the strongest determinant of client loyalty. Current findings provide implications for multi-product financial institutions that are of theoretical and practical interest alike.     

Determinants of financial covenants and pricing of debt in private debt contracts: the UK evidence

This paper presents details of financial covenants given by a sample drawn from the largest 200 non-financial quoted firms in the UK in private debt contracts and analyses these data to see whether there are relationships between the nature of the covenants given and firm characteristics. Data were obtained from 72 firms, of which 17 gave no financial covenants. Firm size was found to be the only significant factor influencing whether firms did or did not give covenants as well as the only factor which influenced the margin given on debt. Some types of covenants given were found to be different from those found in previous research. In particular, there is greater use of EBITDA as a base for both interest cover and gearing covenants. This shows the importance of cash flow based lending as opposed to asset based lending for general financing for large firms.     

Co-commissioning of public services and outcomes in the UK: Bringing co-production into the strategic commissioning cycle

Commissioning as a planning, resource mobilization and prioritization activity needs to harness user and community co-production of public services and outcomes. Based on a public value model, we map how commissioners can go beyond traditional consultation and participation processes to achieve co-commissioning with citizens. Moreover, we discuss how public sector organizations can use their strategic commissioning process to support and embed citizen voice and action in their problem prevention, treatment and rehabilitation strategies to achieve the quality of life outcomes desired by both citizens and public service commissioners.     

The contract,accounting and trust: A case study of an international joint venture (IJV) in the United Arab Emirates (UAE)

This paper reports on the results of a case study that examines the effect of the contract and accounting on inter-organisational trust in an international joint venture (IJV). The empirical setting of the research was an IJV relation between a United Arab Emirates (UAE) firm and its western partner. Data were gathered from multiple sources, including documents, observations, interviews and discussions with managers. The paper aims to explore the process of trust development and the role of the contract and accounting in this. We find that trust developed differently for the partners. Moreover the trust concerns of the partners were not the same. Based on this we conclude that trust was not automatically reciprocated. Instead it needs relating to other items such as the contract, accounting and also the institutional environment. The open-book accounting we observed could only be termed ‘partial’ because the western partner had access to the local partner's books but not the vice versa. But this partial open-book accounting created conflicts between the partners. We argue that developing one kind of trust through one particular medium may help one party but may damage the relationship between the partners.     

Individual Investors' Perceptions Regarding the Meaning of US and UK Audit Report Terminology: 'Present Fairly in Conformity with GAAP' and 'Give a True and Fair View'

The standard unqualified audit report in the United States contains the phrase 'present fairly ... in conformity with generally accepted accounting principles' (PFGAAP), while in the United Kingdom, the corresponding phrase is 'give a true and fair view' (TFV). Despite the former phrase existing in audit reports since 1939 and the latter since 1947, there is little agreement as to what the respective phrases represent. Accordingly, this paper examined UK and US individual investors' perceptions towards various dimensions of the meanings of the phrases including whether they imply that the financial statements are not misleading and free from bias. The results indicate that a majority of both groups perceive that the UK phrase precludes misleading financial statements. A smaller percentage of both groups feel that the US terminology achieves this objective. The results are similar as to whether the respective wording implies that the financial statements are free from bias. In general, the respondents awarded a greater level of confidence to the UK 'true and fair view' than the US 'present fairly in conformity with generally accepted accounting principles.' No policy recommendation is drawn from these results, however, since there is also evidence that as long as audit report language is pre-determined by law or some official body, investors will evince indifference as to the kind of language prescribed.