Accounting treatment - Essay Example

?INTRODUCTION Fair accounting treatment refers to the fulfillment of all legal obligations that are imposed by the government in the organizational act. It is the responsibility of all the organizations to strictly follow the guidelines because the fulfillment of all the obligations justifies the fair role of the organization. The justification of the company’s fair role has a clear reflection in the management of its accounting. This report is conducted to analyze the impact of organizational fairness in accounting activities on the performance of company managers along with the impact on managers perception in return of fair treatment of the organization. Another important purpose for writing this paper is to analyze the importance of conducting experimental research in the management accounting. Good managers are considered as assets for the organization. It is very important for the organizations to contain managers with positive attitude for the organizational activities regarding the fairness and legal obligations. The role of accountant is very critical in the organization because the accountant knows all about the cash flows and the overall money management of the company. All the managers have knowledge regarding the fairness of company’s operations and activities. It is believed that fair compensation system can improve the performance of the employees in the organization. The fair compensation system is a part of fair management accounting system in the company. This research paper will justify the importance of fair treatment of organization in improving the productivity of the organization. RESEARCH FINDINGS AND ANALYSIS Management accounting system is one of the most important procedures of the organization because it gives a clear understanding of organizational fairness or unfairness treatment with its employees and the government. Several researches have been conducted so far to identify the impact of organization’s fairness on the performance of the organization (Arshad, Asif and Baloch, 10-19). It has been identified that Fairness in operations has a significant impact on the performance of organization. Organization’s performance refers to the effectiveness and efficiency of the organization. Fairness has always been used as a standard for justifying the beneficial existence of organization in the society. Organization has a responsibility towards the government to pay complete taxes without any kind of disobedience and illegal activity. All the obligations that are imposed by the government in the organizational and industrial act should be followed by every organization to play a fair role in the country. Nowadays, it is not easy for the companies to play fair role in all the aspects of the business because competition has become very stiff and every company is seeking to get the competitive edge by any means. Therefore in such kind of environment it is difficult to manage all the operations with fairness. In the presence of this fact still the organizations are liable to fulfill all the obligations that are imposed by the government to justify its social beneficial existence in the country. Fairness in all the parts of the organization has a very positive impact on the employees and managers who are working in the organization (Kumari, 116 – 128). It is easy for the company managers to observe the fairness in accounting system of the company because it is completely based on figures so it is has become easy for the mangers to evaluate the fair treatment of organization. Therefore, it can be concluded with the fact that fairness in management accounting activities can justify the fairness of organization among the managers. This topic has got a great importance in present competitive world that’s why this topic has been selected for further exploration on this area. Now come specifically to understand the importance of this research paper. The consideration of fairness in the organizational activities has a significant impact on the overall performance of the business, but particularly the area of compensation and reward system of the company is considered to understand the role of fairness in the performance improvement of the organization. Several researches have been conducted so far to determine the impact of compensation and reward system on the performance of employees. It has been identified that appropriate performance evaluation of employees and deserving compensation and reward increase the productivity of employees in the organization. But here the thing that needs to be clarifying that how a deserving compensation system or fair compensation system should be developed. Who will evaluate the fairness of the organization in the area? The managers of the company have the authority to evaluate the fair treatment of organization with its employees by proper analysis of company’s management accounting system. The HR managers of the company have the authority to evaluate the performance of employees and give them a return that they deserve in return of their performance. It is very common in most of the private organizations that company is driving very high level of profits because of employees’ hard work but giving the employees a very minor compensation or reward in return. Employees are not completely satisfied because of this organization’s practice. The expectation of employees is high but the return is low after giving a great performance, this seems a very unjustifiable practice of the organizations. It is the believe of company’s managers that if the compensation and reward system is properly designed and all the employees treated fairly and if they are rewarded about what they expect in return of their performances then the dedication and loyalty of employees become very high and that would have a direct impact on the company’s productivity. Fair compensation and reward system will help managers greatly to motivate the employees for giving a good performance in the organization to get the possible benefits in return of their hard work (Greene). It is very common in the organizations that employees are not satisfied with the compensation and rewarding system of the company. Employees have more expectation of return but do not receive it which causes a decrease in the motivation level of employees in their jobs. The absence of motivation can be clearly observed in the performance of employees. Fairness in the compensation system of the company refers to the benefits that have been giving to the employees should be completely on the basis of their performance and hard work. The expectation of employees should be fulfilled to satisfy their needs. Nowadays, satisfied employees are considered as one of the key elements of getting the competitive edge in the concentrated competition. Motivation of employee is highly considerable to enhance the performance of the organization (Hasanen, 55-57). Huge multinationals have a great focus on the motivation of employees. Google Inc and Apple Inc are the best examples. Google Inc provides a wide range of benefits and compensation to its employees in return of their dedicated performances. The employees of Google are highly satisfied with their jobs and making maximum efforts to lift up their organization always on the top in the competition (Strauss). Several other examples have justified that fair compensation system can improve the performance of the organization up to a greater extent. Fair compensation system will strengthen the motivation and motivation will let the employees to give the high productivity in the organization. Most important thing for designing the fair compensation and reward system is the appropriate and unbiased performance evaluation system of employees. The apparent performance evaluation of employees will help the management to give deserving rewards to the employees. The deserving compensation will completely fulfill the expectation of employees and motivate them to work harder to get the better compensation and benefits. In this way fairness plays a very important role in the enhancing the performance of the organization. Organizational productivity can be enhanced by many sources that includes adaptation of new technology, increase the labor force, investments in the new production plants, etc. These all sources required a considerable amount of investment. The emerging and truly low investment way to enhance the performance or productivity of the organization has been determined that is to increase the productivity of employees by satisfying them in the organization. The satisfaction of employees depends upon the reward and compensation system of the organization. Good or appealing compensation system is a very good driver of increasing the employees’ motivation and dedication towards the work. The fair compensation system is the way to reward the employees of the company in return of their performances either it is good or bad. Fair compensation system is not increases the cost or expanses of the company because it would be the result of employees performance. Improved performance would increase the company’s profits and the part of increased profits would be distributed among good performers, therefore the cost of fair compensation would not be bear by the company. This type of cost is considered as the indirect cost of the company. Multinationals have a great focus in enhancing this practice in the units to increase the productivity of the organization. Microsoft is a great example for improving the organizational productivity by its employees’ satisfaction (Andersen). Microsoft provides great packages to its employees to retain them for a long term with the company. The management of the company believes that productive employees are one of the key sources to get the competitive advantage in the company. Starbucks is another important example that needs to be considered here. It is believe of Starbucks management that satisfaction of employees is clearly reflected in their behavior and satisfied employees can make the customer satisfied with their behavior. Starbucks is a coffee shop therefore the role of service employees is very important because they are directly encountered with customers while providing a service. Happy and satisfied employees will be able to serve better to the customers with their pleasant behavior. Fair system of compensation made the employees satisfied in the Starbucks. Fairness in compensation relates to indirect cost that we’ve covered this semester in ACC 333. The fairness of compensation system has proved the importance of experimental research in management accounting. Lots of unidentified dimensions can be explored though the experimental research in management accounting. The exploration of such king of facts makes easier for the organization to determine those are that are the most beneficial for the organization. Experimental research led the researchers to analyze the management accounting in the frame of new experiments. It seems that a lot of unanswered questions in management accounting can be explored by experimental researches. Experimental methods have the tendency to give the results with complete justification. Justification is very important in researcher findings and experimental researches have clear justifications in its results. After analyzing the importance of experimental research in management accounting I want to ask whether experimental accounting research can be used in financial accounting. This question has a great importance for the researchers in the area of accounting. Lots of unanswered and unclear thoughts and questions will be explored by conducting a research in the area of financial accounting. The experimental researches in the area of financial accounting would be very helpful in exploring the new facts that would be able to analyze more accurately the impact of financial accounting on the organizational performance. CONCLUSION With all discussion and examples it has been proved that fairness has a significant role in improving the performance of the organization. Fairness in activities is also very helpful for the managers of the company. Managers can effectively motivate the employees when the company has fair rewarding or compensation system. Employees become highly motivated when they receive deserving compensations in return of their performances. The importance of experimental research in management accounting has also been delivered in this paper. Now I have become capable of finding the importance of conducting experimental research in management accounting. In the last part of this paper the question regarding the experimental research in the area of financial accounting has opened the new door for researchers of accounting. It is the assumption that the experimental researches in the area of financial accounting will be very beneficial for the organization to completely analyze the role and impact of financial accounting in the organization. Works Cited Andersen, Klaus Holse. EMEA Press Centre. Microsoft. 2013. 3 Dec. 2013. Arshad, Sara, Rabiya Asif and Mushtaq Ahmed Baloch. “The Impact Of "Fairness" In Working Conditions On Organizational Performance In Pakistan Telecommunication Company.” International Journal of Economics and Management Sciences. 2.4 (2012): 10-19. Greene, Kate. Employee Compensation that Encourages Performance. 3 Dec. 2013. http://www.humanresourcepartners.com/articles/compensation.pdf Hasanen, Lars. Organizational death and employee motivation: Investigating a plant closure in a multi-plant organization. Diss. Stockholm, 2010. Kumari, Neeraj. "Impact of Perceived Fairness of Performance Appraisal on Employee Performance." International Review of Basic and Applied Sciences. 1.4 (2013): 116 – 128. Strauss, Karsten. How To Keep Employees Happy (And To Just Plain Keep Them). Forbes, May. 2013. 3 Dec. 2013. Read More