Effect of Performance System on Ethical Behavior and Culture

This presentation explores the impact of performance management on the ethical behavior and culture of an organization. It discusses the importance of selecting employees based on their ethical behavior, the role of management in instilling ethics, and the influence of performance management practices. The presentation also highlights the use of MYOB's performance management tool, Work.com, and the financial and non-financial measures used by MYOB to measure company performance.

MANAGERIAL ACCOUNTING

INTRODUCTION
 Pay of the employee must link to
performance, knowledge, and skills
 performance related pay job format helps
appraised the employees accordingly
 main participant of ethical culture is
employees’ perceptions of organizational
justice (Peirson et. al, 2015)

EFFECT OF PERFORMANCE SYSTEM ON THE ETHICAL
BEHAVIOUR AND CULTURE OF THE ORGANIZATION
 Selection of employees should be on the
basis of their ethical behavior
 The management of an organization must
perform ethically that influences other
employees and inculcate the essence of
ethics
 The senior management must instil ethics in
its employees by imparting frequent training
on a code of conducts (Peirson et. al, 2012)

 Ethical culture is a bit complicated in nature and
there are multiple factors that influence the same
 Performance management helps so as to ensure
that the employees are delivering in the best
interest of an organization (Phillip, Richardson and
Michael, 2012)
 performance of the juniors is managed by the
managers of an organization
 The long term success or failure of an organization
can be determined through performance
management and performance management
practices (Phillip, Richardson and Michael, 2012)

 Human Resource Management practices play a
major role in development of a profound
management system (Grohsjean, Kober &
Zucchini, 2016)
 HRM ensures employees’ performance and overall
performance

MYOB
 Tool for MYOB - Work.com
 Work.com an enterprise-wide system
designed by salesforce.com
 Work.com helps the personnel to celebrate
individual and team successes, share and
align goals, track individual and team goals,
offer feedback (MYOB, 2018)
 track performance and accomplish goals

 Work.com reduced the process of paperwork
 more convenient and transparent through
electronic work
 systematic plan, manage, recognize and
reward the performances.
 Sharing valuable feedbacks with respect to
performance has its own significance

 Measuring performance is the basis of
improvement in performance
 senior personnel in MYOB are well aware of
its long term organizational goals
 the juniors are aware of the actions that are
required
 Helps in constructive decisions.
 Digital use of performance management has
enabled the employees to communicate with
one another effectively (MYOB, 2018)

 compile data and is a basis for decision making
 all its levels are engaged in providing timely,
relevant and concise information
 Helps in effective decisions to fulfil overall
organizational goals
 reward and recognition programmes required in
every organization to celebrate the performance
of the dedicated employees

FINANCIAL & NON-FINANCIAL
MEASURES BY MYOB
Three layers of management
 Top level Management
 Middle-Level Management
 Lower Level management
 Success depends on how the levels of
management have performed
 MYOB has created a Remuneration and
Nomination committee to create a rewarding
and motivating remuneration (MYOB, 2018)

 Greater the employee's reward system, the
greater shall be a participating role in achieving
company objective
 maximize shareholders returns
 MYOB created a Remuneration and Nomination
committee (MYOB , 2018)
 Rewarding and motivating performance.
 great initiative taken by the company to ensure
that the workforce keeps intact and grows along
with the company (Gregoire, Corbett, & McMullen,
2011)

 Key management personnel rewards are
aligned with the best interest of its
shareholders (MYOB, 2018)
 salary has been divided into fixed and a
variable part
 Fixed salary denotes the industry standards
 The variable salary includes cash and equity
participation

METRICS SELECTED TO MEASURE
COMPANY PERFORMANCE
 company use the following two parameters
to decide performance
 Board sets up challenging but realistic
performance targets which can be attainable.
 100% achievement of this target gives 100%
incentive (MYOB, 2018)

NON - FINANCIAL MEASURES
 quality and customer satisfaction, for ex:
after-sales service.
 motivated workforce try to achieve the
quality of the product or the service (MYOB,
2018)
 Employee hunts for customer satisfaction

CONCLUSION
 Management can install some corrective
measures to rectify the position.
 Linking remuneration of the employees helps
in achieving management objectives
 Employees will always have an incentive to
achieve targets

REFERENCES
 MYOB. (2018) MYOB 2018 annual report and accounts. Available from:
https://investors.myob.com.au/FormBuilder/_Resource/_module/HhW--
OHCfU-MPYnMov-UPA/documents/8413_MYOB_AR17_EDIT_v7a_INTER
ACTIVE.pdf
[Accessed 3 May 2019]
 Peirson, G, Brown, R., Easton, S, Howard, P. and Pinder, S. (2015)
Business Finance, 12th ed. North Ryde: McGraw-Hill Australia.
 Phillip, D, Richardson, A and Michael Wu. (2012) Talent Management
at Multinational Firms in China. Available from:
https://knowledge.wharton.upenn.edu/article/talent-management-at-
multinational-firms-in-china/ [Accessed 3 May 2019]
 Gregoire, D.A., Corbett, A.C., & McMullen, J.S. (2011) The cognitive
perspective in entrepreneurship: An agenda for future research.
Journal of Management Studies, 48(6), 1443–1477. Available from
https://www.effectuation.org/wp-content/uploads/2017/06/The-cogniti
ve-perspective-1.pdf
[Accessed 3 May 2019]
 Grohsjean, T., .Kober P. & Zucchini, L. (2016) Coming back to
Edmonton: Competing with former employers and colleagues,
Academy of Management Journal, 59: 394-413. doi:
10.5465/amj.2014.0200