Analysis of Work Environment at KPMG | Human Resource Assignment Sample

This is an organizational behavior essay on the work environment at KPMG, written for an undergraduate HR module. It picks one strength, employee motivation, and one weakness, ethical culture, and argues each with theory and published evidence. Maslow's hierarchy of needs and goal-setting carry the motivation section; the firm's record of regulatory sanctions carries the ethics section. The essay gives the firm's size as of FY2021; the FY2025 figures have their own section below.

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Employee Motivation and Organization Culture at KPMG

Introduction

KPMG is an international network of professional firms that provide audit, tax, and advisory services to business corporations, public-sector companies, governments, and nongovernmental agencies. Rather than one large corporation, KPMG represents a collection of several professional, independent firms working under 'KPMG International Ltd'.

The network reported more than 236,000 partners and employees in the year to 30 September 2021 (KPMG International, 2021). The present essay analyzes the work environment at KPMG with the context of employee motivation as its strength and organizational ethical culture as its weakness.

How Does KPMG Motivate Its Employees?

KPMG motivates its people on two tracks. Pay, bonuses and recognition meet the lower-order needs. Work-life balance, learning and leadership development meet esteem and self-actualization, and at its US firm a purpose program asked every employee how their work makes a difference. That two-track design is the strength this essay argues.

Employee motivation is one of the strongest aspects of the KPMG work environment. The organization combines basic needs, self-actualization, and goal-setting concepts (Robbins and Judge, 2013) to motivate its employees. KPMG's employee motivation model integrates conventional extrinsic rewards such as pay, benefits and bonuses with platforms for self-development, leadership and learning, and a paper by one of the firm's UK partners explains why it needs both: motivation shifts with career stage. In focus groups with KPMG's younger employees in the UK, the newest graduates valued job stability, yet what would make them leave was not money but work-life balance, experience and learning. A OnePoll survey carried out for KPMG found 58 percent of Generation Y respondents content to earn 'enough' rather than constantly striving for more, against 48 percent of Baby Boomers (Fairs, 2014).

According to Maslow's theory of the hierarchy of needs, every individual is driven by five levels of needs with the satisfaction of each need leading to the domination of the next need (Robbins and Judge, 2013).

The rewards, benefits, and other forms of extrinsic rewards at KPMG, along with fulfilling the lower order needs, also carry the social esteem of working at one of the largest professional-services networks. On the other hand, the organization also provides several job benefits like work-life balance, life-long learning, autonomy, and leadership development platforms that attract talented and young professionals.

Motivation at KPMG has also changed as the organization has. Quinn and Thakor (2018) use the firm as their example of turning midlevel managers into purpose-driven leaders. For decades, they write, KPMG's partners approached leadership the way they approached accounting, carefully and cautiously, and employees at every level made only safe, incremental improvements. After analyzing hundreds of employee interviews, the firm's leaders settled on a purpose, to help clients "inspire confidence and empower change", and then "invested in a new kind of training, in which the partners learned how to tell compelling stories that conveyed their sense of personal identity and professional purpose" (Quinn and Thakor, 2018).

Bruce Pfau, who led human resources and communication at KPMG's US firm, describes how the purpose reached employees. It opened with a question, 'What do you do at KPMG?', and a video that answered 'We Shape History', retelling the firm's part in events such as certifying the election of Nelson Mandela in 1994. Employees were then asked to answer the question for themselves: the 10,000 Stories Challenge invited the US firm's 27,000 partners and employees to make posters showing how their own work makes a difference (Pfau, 2015).

The challenge was also goal-setting in the textbook sense: a specific target, 10,000 stories by Thanksgiving, with an extrinsic reward of two extra paid days off if it was met (Robbins and Judge, 2013; Pfau, 2015). The target was passed before the Fourth of July, and stories kept arriving after the days off were assured, 42,000 by Thanksgiving, which Pfau reads as evidence that the incentive was not the main motivator. The firm's own data point the same way. The share of employees agreeing that KPMG is a great place to work rose from 82 percent before the initiative to 89 percent after its first year, and year-to-date turnover was 5.6 percent among employees whose leaders discussed purpose against 9.1 percent among those whose leaders did not, an association Pfau calls correlational rather than causal (Pfau, 2015).

Linking day-to-day responsibilities to a higher purpose let employees read their own jobs in terms of self-actualization. Since self-actualization is the level at which individuals pursue their potential and develop themselves (Robbins and Judge, 2013), the purpose exercise was aimed squarely at the top of the hierarchy rather than at pay, and the stories that kept coming after the reward was secured suggest it reached that level.

What Are the Weaknesses in KPMG's Organizational Culture?

The weakness is ethical rather than motivational. Between 2021 and 2023 the UK Financial Reporting Council sanctioned KPMG four times: over its advice to Silentnight, its audits of Conviviality and Carillion, and false and misleading information it gave the regulator. The essay reads that record as a gap between stated values and enforced processes, not isolated error.

Fines on KPMG LLP in four Financial Reporting Council cases, 2021 to 2023

Chart data

Item	Value (million pounds)
Silentnight advice, August 2021	13 million pounds
Conviviality audits, January 2022	3.01 million pounds
False information to the FRC, July 2022	14.4 million pounds
Carillion audits, October 2023	18.55 million pounds

A run of regulatory sanctions for professional misconduct has emerged as one of the key weaknesses of KPMG in the last few years, and the record is a matter of public decision notices rather than allegation. On 19 January 2022 the UK Financial Reporting Council sanctioned the firm over its audits of the drinks retailer Conviviality plc for the years ended 30 April 2017 and 29 April 2018, imposing a financial sanction of £4,300,000, reduced to £3,010,000 for admissions and early settlement. The regulator said the failings "were serious, spanned several significant areas of the financial statements and related to a number of fundamental auditing standards including the requirement to obtain sufficient appropriate audit evidence, apply sufficient professional scepticism, and prepare proper audit documentation" (Financial Reporting Council, 2022a). Conviviality collapsed in 2018.

The July 2022 sanction matters more for a culture argument, because it is about how the firm dealt with its own regulator. On 25 July 2022 an FRC disciplinary tribunal sanctioned KPMG over the provision of false and misleading information and documents to the FRC in its Audit Quality Reviews of the Regenersis audit for the period ended 30 June 2014 and the Carillion audit for the year ended 31 December 2016. The firm was fined £20,000,000, reduced to £14,400,000 "to reflect KPMG's self-reporting, co-operation, and admissions" (Financial Reporting Council, 2022b). On 12 October 2023 the FRC sanctioned the firm again over the Carillion audits themselves, for the years ended 31 December 2014, 2015 and 2016 and additional 2017 audit work, with "a total financial sanction of £26,500,000, reduced by 30% to £18,550,000 to reflect the firm's co-operation and admissions" (Financial Reporting Council, 2023).

An earlier sanction, in August 2021, fined the firm £13 million for misconduct in its advice to the bed manufacturer Silentnight before the company's 2011 administration and sale; the tribunal found that KPMG "failed to act solely in its client's interests" (Financial Reporting Council, 2021). Outside the UK, KPMG Lower Gulf, the network's Middle East member firm, was hired in 2018 by the Dubai-based private equity group Abraaj to review allegations that the group had mismanaged its healthcare fund. Anderson's commentary reports that investors thought the review "rushed and superficial" and that the son of an executive at KPMG Lower Gulf worked at the fund (Anderson, 2021). KPMG's poor performance in terms of its stakeholder accountability and ethics can erode its organizational gains and other positive aspects of the organizational culture. Considering that a systematic culture of unethical behavior results in severe negative consequences like lawsuits, fines, and customer boycotts (Robbins and Judge, 2013), an organization needs to create a positive ethical culture.

As seen in the case of KPMG, the organization has been caught in the mesh of fines and allegations for the last few years. Overlooking the unethical aspects of organizational culture can affect employee satisfaction, loyalty, as well as client satisfaction leading to decreased productivity and increased opportunities for unethical practices (Robbins and Judge, 2013).

To address this weakness, KPMG needs to align its core processes with organizational values and strengthen its ethical climate by enforcing clear norms. Organizational culture can only become effective when there is an alignment between leadership values/behavior and organizational values/processes (Rosen, 2019). In this case, there is a gap between leadership values and organizational processes leading to unethical or non-professional practices.

Also read our research proposal on the effect of CSR on brand image, which covers the reputation side of the same problem.

In parallel, every strategy, policy and decision at KPMG has to be anchored on the core values and principles of the organization. An explicit commitment to core ethical values will send a message to employees of the organization about the ethical priorities (Epley and Kumar, 2019) of the company.

How Big Is KPMG in 2025?

KPMG International reported globally aggregated revenues of US$39.8 billion for the year ended 30 September 2025, up 5.1 percent in local currency and 5.4 percent in US dollars, with growth in every region and function. Global headcount rose 1.8 percent to 276,030, and the network's firms operate in 138 countries and territories (KPMG International, 2025).

KPMG International, year to 30 September 2025

Global revenue

US$39.8bn

Revenue growth in local currency

5.1%

Partners and employees

276,030 Up 1.8 percent on the year.

Countries and territories

138

Those figures change the argument above in two ways. A headcount of 276,030 is roughly 40,000 more people than the FY2021 figure the introduction quotes, so the motivation model described here now has to work across a materially larger workforce. And because KPMG is a network of independent member firms rather than one company, a culture or ethics failure in one member firm does not automatically travel, which is both the firm's defense and the reason this essay treats the pattern of fines as a structural problem rather than a local one.

Limitations and Conclusion

Two limitations should be read into the argument above. The first is the source base: the section on motivation rests largely on accounts by KPMG's own people, the Fairs paper and Pfau's article, and on survey and turnover figures the firm collected itself, so it describes the program as its designers saw it rather than the experience of the people inside it. The second is the unit of analysis. KPMG is a network of independent member firms: the focus groups were run in the UK firm and the purpose program in the US firm, the four sanctions fell on the UK firm, and the Abraaj criticism on KPMG Lower Gulf. An essay that treats "KPMG" as one employer overstates how far a motivation program or an ethical failure travels between them.

The conclusion the evidence supports is narrower than either half of the essay on its own. KPMG's motivation model is genuinely well designed: it addresses the lower-order needs with pay and benefits and the higher-order ones with autonomy, learning and a purpose program, and the firm researches what motivates its own people rather than assuming it. That design did not prevent four regulatory sanctions between 2021 and 2023, one of which, £14.4 million, was for false and misleading information the firm gave its own regulator. The gap is therefore not a gap in motivation but a gap between values that are communicated and processes that are enforced, and it is the processes that carry the sanctions. For the UK firm the sanctions fell on, the practical implication is that an ethical climate has to be built into how audit and advisory work is reviewed, documented and checked for conflicts of interest, not into how employees are inspired (Rosen, 2019; Epley and Kumar, 2019).

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Sources

• Anderson, T., 2021. Can KPMG Recover from its Recent Scandals?. [online] International Policy Digest. Available at: https://intpolicydigest.org/can-kpmg-recover-from-its-recent-scandals/ [Accessed 19 September 2026]
• Epley, N. and Kumar, A., 2019. How to design an ethical organization. Harvard Business Review, May-June. Available at: https://hbr.org/2019/05/how-to-design-an-ethical-organization
• Fairs, D., 2014. Shifting employee motivations. [pdf] KPMG LLP (UK), September, pp.1-7. Available at: https://assets.kpmg.com/content/dam/kpmg/pdf/2014/09/kpmg-slant-future-work-shifting-employee-motivations.pdf [Accessed 24 September 2026].
• Financial Reporting Council, 2021. Sanctions against KPMG and former partner in relation to Silentnight, August. [online] https://www.frc.org.uk/news-and-events/news/2021/08/sanctions-against-kpmg-and-former-partner-in-relation-to-silentnight/ [Accessed 19 September 2026].
• Financial Reporting Council, 2022a. Sanctions against KPMG LLP and Nicola Quayle, 19 January. [online] https://www.frc.org.uk/news-and-events/news/2022/01/sanctions-against-kpmg-llp-and-nicola-quayle/ [Accessed 19 September 2026].
• Financial Reporting Council, 2022b. Sanctions against KPMG and others in connection with Regenersis & Carillion audits, 25 July. [online] https://www.frc.org.uk/news-and-events/news/2022/07/sanctions-against-kpmg-and-others-in-connection-with-regenersis-carillion-audits/ [Accessed 19 September 2026].
• Financial Reporting Council, 2023. Sanctions against KPMG LLP, KPMG Audit plc and two former partners, 12 October. [online] https://www.frc.org.uk/news-and-events/news/2023/10/sanctions-against-kpmg-llp-kpmg-audit-plc-and-two-former-partners/ [Accessed 19 September 2026].
• KPMG International, 2021. KPMG reports global revenues of $32.13 billion for FY21, focus on strategy enables 10% growth, 9 December. [online] https://kpmg.com/kw/en/media/2021/12/kpmg-reports-global-revenues-of--32-13-billion-for-fy21--focus-o.html [Accessed 24 September 2026].
• KPMG International, 2025. KPMG delivers 5.1% rise in global revenue. [online] https://kpmg.com/xx/en/media/press-releases/2025/12/kpmg-delivers-rise-in-global-revenue.html [Accessed 18 September 2026].
• Pfau, B., 2015. How an accounting firm convinced its employees they could change the world. Harvard Business Review, 6 October. Available at: https://hbr.org/2015/10/how-an-accounting-firm-convinced-its-employees-they-could-change-the-world
• Quinn, R. E. and Thakor, A. V., 2018. Creating a purpose-driven organization. Harvard Business Review, July-August. Available at: https://hbr.org/2018/07/creating-a-purpose-driven-organization
• Robbins, S. P. and Judge, T. A., 2013. Organizational behavior. 15th ed. Boston: Pearson, pp.201-263; 512-527. Catalog record available at: openlibrary.org
• Rosen, J., 2019. What is ethical culture, and why does it matter? Corporate Compliance Insights. Available at: https://www.corporatecomplianceinsights.com/ethical-culture-why-it-matters/

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