The Roles of Organizational Justice and Trust in a Gain-Sharing Control System

32 Pages Posted: 28 Jul 2006

See all articles by Frances A. Kennedy

Frances A. Kennedy

Clemson University - School of Accountancy & Legal Studies

James M. Kohlmeyer

East Carolina University - College of Business

Robert J. Parker

University of New Orleans - Department of Accounting

Date Written: July 27, 2006

Abstract

This study examines the roles of organizational justice and trust in a specific type of management control system (MCS), gain-sharing. According to the proposed theory, employee perceptions involving the procedural and distributive justice of the gain-sharing plan influence employee trust in management. Positive perceptions of fairness lead to high trust, which, in turn, has positive consequences for the organization such as lower employee turnover and higher organizational performance. To investigate these issues, a survey was administered to employees of a large manufacturing company. Results of structural equation modeling indicate that employee perceptions regarding the fairness of the gain-sharing plan are positively related to employee trust in management. Further, trust is linked to employee turnover intentions. The results imply that the organizational justice of a MCS has consequences for the attitudes and behaviors of employees and thus the success or failure of the MCS.

Keywords: Gain-sharing, organizational justice, trust, turnover

JEL Classification: M41

Suggested Citation

Kennedy, Frances A. and Kohlmeyer, James M. and Parker, Robert J., The Roles of Organizational Justice and Trust in a Gain-Sharing Control System (July 27, 2006). AAA 2007 Management Accounting Section (MAS) Meeting. Available at SSRN: https://ssrn.com/abstract=920880 or http://dx.doi.org/10.2139/ssrn.920880

Frances A. Kennedy

Clemson University - School of Accountancy & Legal Studies ( email )

Clemson, SC 29634
United States

James M. Kohlmeyer (Contact Author)

East Carolina University - College of Business ( email )

Greenville, NC 27858-4353
United States

Robert J. Parker

University of New Orleans - Department of Accounting ( email )

New Orleans, LA
United States

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