Antecedents of Budgetary Participation: Enhancing Employees’ Job Performance

Dr Desmond YuenUniversity of Macau, Taipa, Macau

e-mail: desmondy@umac.mo

AbstractThis study investigates two antecedents to participation in budgetary activities—a need for a sense of achievement and a positive work attitude—and then assesses the impact of these three variables on job performance in the context of public-sector organizations in Macau. A total of 216 managers participated in the study. This paper demonstrates that the two antecedent factors—a positive work attitude and a need for achievement—have a significant positive relationship with budgetary participation. It is concluded that indirect relationships exist between the two antecedent variables (work attitude and a need for achievement) and the dependent variable (job performance), with participation in budgeting as an intervening variable. The results of the study have implications for the design of effective budgeting planning control process in public-sector organizations in Macau. In providing a formal conceptual framework, the paper argues that the interactive process of budgeting systems means that individual-level factors are crucial to the achievement of budget plans.Keywords: pubic sector organization, work attitude, need for achievement, job performance

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Introduction

Public-sector organizations have traditionally had a significant degree of formal

administrative control over budgeting systems. However, in Macau, as in other parts of the

world, the organizational structure of power and influence over budgeting systems is

changing as attempts are made to improve operational efficiency (Oswick and Grant, 1996).

There are three major features to these changes. First, public-sector organizations have been

placing more emphasis on flexibility, structural flatness, and reduced formality. Secondly, the

‘de-bureaucratization’ of systems and structures has allowed more employees to participate in

budgetary activities. Thirdly, the attitudes of employees have been positively influenced by

such incentives as opportunities for promotion, the availability of honoraria, the provision of

bonus payments, and the introduction of various other forms of extrinsic reward. Adcroft and

Willis (2005) have argued that such changing attitudes produce increased turnover of staff

members during their participation in budgeting in public-sector organizations, and that this

dramatically increases costs and reduces the quality of services provided to society. However,

previous studies of organizational dynamics have identified positive attitudes among

employees and a need for achievement as being important elements in lowering turnover and

improving performance (Randall, 1990; Mathieu and Zajac, 1990). According to this

perspective, budgetary participation can be more effective when staff members possess a

positive attitude and a need for achievement—which will eventually enhance the performance

of employees.

Empirical evidence on the relationship between budgetary participation and performance has

been offered by several researchers (Lau et al., 1995, Milani, 1975; Gul et al., 1995). Some

studies have found a positive relationship between budgetary participation and job

performance. Other studies have suggested that there is a weak positive relationship (Milani,

1975), or even a negative relationship (Kenis, 1979), between the two factors. These mixed

results indicate that no simple relationship exists between budgetary participation and job

performance, and suggest that there could be other variables involved. Such inconsistent

findings have prompted several researchers to examine the antecedent variables that affect job

performance indirectly during budgetary participation. However, study of public-sector

organizations remains scanty. It is therefore necessary to extend the study of the complex

relationship between budgetary participation and performance to include an examination of

the relevant variables in a public-sector setting. Such evidence is clearly important in

developing appropriate accounting-based planning and control systems that facilitate

effective budgetary development.

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Shields and Shields (1998) have suggested that it is important not only to understand the

consequences of participative budgeting, but also to investigate its antecedents. The current

study has selected two factors as potential antecedent variables—(i) need for achievement;

and (ii) work attitudes. The study adopts the path-analysis technique to explain the

relationship between budgetary participation and job performance, including a consideration

of the two selected antecedent variables.

Empirical evidence related to the factors depicted in the path-analysis model (see Figure 1) is

limited (Subramaniam et al., 2002; Mia, 1988 and Steer, 1977). Brownell and McInnes

(1986) did find that managers need to be motivated to perform better in budgetary activities,

and that managers who have a greater need for achievement and certainty are self-motivated

to participate more actively than those who have less need for achievement. Brownell (1982)

has also mentioned that the two individual-level variables identified in the present study play

significant roles in influencing employee participation in budgeting activities—because it is

an important source of information. From an organizational perspective, satisfying unit

managers’ need for achievement has been shown to reduce employees’ lateness to work,

absenteeism, and staff turnover rates (Randall, 1990), and Potter and Schmidgall (1999) have

stated that there is a need for research that connects the design of accounting systems and

overall organizational design to improve the organization’s efficiency.

The rest of the paper is arranged as follows. A theoretical framework is presented in the next

section. This framework links the antecedent variables (working attitudes and the need for

achievement) to budgetary participation and its indirect effect on job performance.

Subsequent sections present the methodology of the study, the results of the survey research,

and a discussion of the results. The paper concludes with notes on the limitations of the study

and its final conclusion.

Conceptual framework

Two variables were selected for examination in the present study as possible antecedent

variables of participative budgeting—(i) ‘manager’s attitudes’; and (ii) ‘managers’ need for

achievement’. These variables were chosen for examination because employees who have a

need for achievement and those who have a positive work attitude are likely to demonstrate

enhanced budgetary participation. Such employees are likely to develop greater identification

with, and involvement in, the organization. In turn, their job performance is likely to be

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enhanced. These propositions, as depicted in Figure 1, have implications for the design of

effective management-accounting systems and for human-resource management in public-

sector organizations.

The present study considers only the indirect relationships between the two antecedent

variables (‘work attitude’ and ‘need for a sense of achievement’) and the dependent variable

(‘job performance’); ‘participation in budgeting’ is taken as the intervening variable in these

indirect relationships. No hypothesis is developed for the direct relationship between ‘work

attitude’ and ‘job performance’; nor is one postulated for the direct relationship between ‘a

need for a sense of achievement’ and ‘job performance’. A review of the literature suggests

that such direct relationships are weak, and that employees require a practical opportunity to

take control over the working environment if their job performance is to be improved and

measured in situations in which budgetary participation provides them such opportunities

(Klich & Feldman, 1992; Hammer & Organ, 1994; Ferres et al., 2004).

Take in Figure 1 about here

Need for achievement and participation in budgeting

A need for achievement has long been thought to influence job performance. Locke (1982,

1991) suggested that a sense of achievement promotes motivation and good job performance.

Hogan and Hogan (1996) found that an employee performs better if the perceived value can

be achieved at a satisfactory level. The importance of a sense of achievement lies in the belief

that one should work hard to accomplish difficult but challenging goals at work. Ravlin and

Meglino (1987) found that the need for achievement played a significant role in motivating

employees during budgetary participation because the results of job performance can be

increased.

A need for achievement can be defined as “the personal striving of individuals to attain goals

within their social environment” (Cassidy and Lynn, 1989 pp. 301–11). Persons with a high

need for achievement are potentially useful members of an organization because they accept

competitive situations, tend to be independent, and have an interest in excellence (Ward,

1993). They are also willing to take personal responsibility for success and generally perceive

themselves to have a higher ability than the others (Kukla, 1972). Klich and Feldman (1992)

found that such managers care about their work, and put more effort into it. Moreover,

managers with high need for achievement set higher goals for themselves, and have higher

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expectations of performance than those with lower need for achievement (Locke & Latham,

1990; Matsui et al., 1982). This desire for success increases their feeling of self-worth in an

organization. These employees require more accurate feedback and information from their

superior to achieve a preset target. Individuals with a high need of achievement like to

undertake achievement-oriented activities when an opportunity arises (Bateman and Grant,

1993; Weiner, 1982).

Locke (1991) suggested that the influence of ‘achievement’ is farther removed (in terms of

causal sequence) from actual behaviour than are other factors—such as intentions and goals.

Predictions of behaviour are therefore difficult to make with any confidence—because of the

number of intervening factors in the process. John (1991) stated that it is important to

examine the relationship between the need for achievement and job performance under

various situational constraints. In addition, employees who have a need for achievement by

participating in budget setting can gain job-relevant information that might help them to set

appropriate goals. They should generally have occupational goals that are congruent with

their abilities (Weiner, 1982). They are likely to be flexible in seeking detailed information

and feedback from a variety of sources to help them to achieve the preset goals (Klich and

Feldman, 1992). In terms of the budgeting process, these findings suggest that managers with

a greater need for achievement are likely to set more challenging, but attainable, budget

targets. They are also likely to seek greater control over their working environment to

maximize the probabilities of achieving or attaining their goals, and the budgetary

participation facilitates achievement such control. They are more likely to express a

willingness to accept more challenges and to take extra responsibilities voluntarily (Spangler,

1992).

As a result of the above discussion, Hypothesis 1 can be stated as follows:

H1: There is a direct and positive association between an employee’s need for achievement and that employee’s budgetary participation.

Work attitude and participation in budgeting

In evaluating the effectiveness of budgetary participation, researchers have commonly treated

the construct of ‘attitude’ as an outcome variable. This is because it is commonly assumed

that participation should positively affect attitude as an outcome phenomenon. However,

improved budgetary participation can also be a result of positive work attitudes among

employees (Dyne and Pierce, 2003). Conversely, employees with negative work attitudes

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might not care about achieving their budgeting goals during budgetary participation (Hammer

& Organ, 1978; Ferres et al., 2004).

Some researchers concluded that budgetary participation might not generate positive attitudes

and improve job performance. For example, Cotter (1964) investigated participating foremen

and rejected the contention that they have better job attitudes than foremen who do not

participate. Invancevich (1979) observed that there is no relationship between budgetary

participation and attitude. A problem facing researchers in this area is therefore a need to

reconcile these conflicting views.

Milani (1975) defined attitude in terms of employees’ feelings and predispositions towards

their jobs and employers in a budgetary context. According to Festinger’s (1957) theory of

cognitive dissonance, employees with positive work attitudes develop a cognitive dissonance

(or psychological uneasiness) during their participation in budget setting. To reduce this

dissonance, they try to improve their performance (Hammer & Organ, 1978; Ferres et al.,

2004). Hanson (1966) felt that involvement in budget creation enables members of an

organization to work more closely towards the budgetary goals. Lewin (1968) suggested that

the activities involved in a participative situation should contribute to the internalization of

organizational goals. In contrast, employees who have a poor attitude might not develop the

cognitive dissonance described above. As a result, these employees are less likely to attempt

to improve their performance voluntarily—because they avoid extra responsibilities and

challenges.

Milani (1975) divided working attitudes into ‘job attitudes’ and ‘organization attitudes’.

First, he found that positive attitudes towards a job enhance an employee’s identification with

the organization’s goals, thus leading to an effective overall performance for the organization.

In most instances, attitudes towards the job have been offered as an intervening factor that

affects job performance when participating in budget activities. Secondly, Milani (1975)

confirmed Hanson’s (1966) results that participation enhances identification with

organizational goals. An important reason for examining this variable in the present study is

the belief that a good attitude towards company will lead to a more effective overall

performance through participative budgeting. The relationship between budget participation

and attitudes (job and organizational) should therefore be tested.

Hypothesis 2 can thus be formulated as follows:

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H2: There is a direct and positive association between an employee’s work attitude and that employee’s budgetary participation.

Participation in budgeting and job performance

Several studies have proposed that budgetary participation is positively linked to employee

performance (Argyis, 1952; Hofstede, 1968; Merchant, 1981; Brownell, 1982; Nouri and

Parker, 1998). In contrast, other studies have reported a negative association (Bryan & Locke,

1967) or no association (Brownell and McInnes, 1986). There is thus no simple relationship

between budgetary participation and job performance.

Budgetary participation might not always be beneficial. Previous studies have found that a

variety of factors—including environmental uncertainty (Gul, 1991), job difficulty (Mia,

1989), organizational structure (Gul et al, 1995), and budget emphasis in performance

evaluation (Brownell, 1982)—can moderate the relationship between budgetary participation

and managerial job-related performance. For example, Mia (1989) reported that managers

participating in budgeting were found to have a positive job performance under complex and

difficult task environments, but a negative job performance under ‘easy’ conditions. Gul et al

(1995) found budgetary participation to be negatively related to job performance in less-

decentralized organizations. Gul (1991) reported that increased participation improved

performance in environmentally uncertain situations, but hampered performance in situations

of low uncertainty. As a result, the present study recognized that the relationship between

budgetary participation and job performance might be different under various working

conditions. Budgetary participation should relate to the involvement of managers in the

budgetary process and their influence over the setting of budget targets (Shields and Young

1993). The argument that managers’ participation in a budget setting affects job performance

is based on two arguments. First, psychological theory suggests that participation is related to

performance through self-identification and ego-involvement with budget goals (Murray,

1990). Secondly, participation is seen to improve the flow of information between

subordinates and superiors, thus leading to improved cognition and enhanced decision-

making (Locke & Schweiger, 1979; Shields & Young, 1993). As a result, participation can

promote better performance through facilitation of learning and knowledge acquisition

(Parker & Wall, 1998).

The present study thus proposes that managers with a high need for achievement and positive

work attitudes are likely to seek greater control over their working environment, and that

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budgetary participation could therefore provide them with such control. Hypothesis 3 is

therefore postulated as follows:

H3: There is a direct and positive association between an employee’s budgetary participation and that employee’s job performance.

MethodSample and questionnaire

There has been no specific study within the Macau public sector of the relationship between

job performance and the variables identified for investigation in the present paper (that is, the

need for achievement and work attitudes variables). Recognizing this gap in the literature, the

present study presents an empirical examination in Macau of the identified variables and of

managers’ participation in budgetary matters. The paper is clearly important for appropriate

accounting-based planning and control systems that facilitate effective management within

the public sector in Macau.

Data for the study were collected by a survey questionnaire administered to a sample of 216

managers in three departments of the Macau public service—the administration and civil

service bureau, the legal affairs bureau, and the civic and municipal affairs bureau (all within

the Office of Administration and Justice).

The questionnaire was prepared in both Chinese and English. To minimize response bias,

respondents were asked to complete the questionnaire independently and to return it directly

to the researcher via electronic mail or postage-paid return envelopes. Included with each

questionnaire was a covering letter that explained the importance of the research and

contained written instructions for the completion of the questionnaire. Confidentiality for

respondents was stressed in the instructions that accompanied the instrument.

In all, 300 questionnaires were sent out, and 216 were returned—a response rate of 72%. The

average age of the respondents was 36 years. The average length of service was eight years,

and all respondents had been in their current position for at least three years.

Measurements

The measuring instruments used in the study were adapted from those used by previous

researchers for studies in the private sector—both manufacturing and service. The

questionnaire and measurements were modified for the use in the public sector.

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Job performance

Job performance was measured with a self-evaluation questionnaire developed by Mahoney

et al. (1963). Respondents were asked to respond on a seven-point Likert-type scale. They

were required to rate their performance on eight dimensions—planning, investigating,

coordinating, evaluating, supervising, staffing, negotiating, and representing. They were also

asked to rate their overall performance.

Although such self-evaluation might be criticized as being a subjective measure, similar

techniques have been widely adopted in many studies (Gul et al., 1995, Brownell and Hirst,

1986). A check of internal reliability for the measure in this study yielded a result of 0.68,

which is acceptable (Nunnally, 1967).

Need for achievement

A modified eight-item version of Steers and Braunstein’s (1976) Manifest Needs

Questionnaire was used to measure need for achievement. This instrument has previously

been used by Subramaniam et al. (2002), and various modified versions have been widely

adopted by other studies (Spangler, 1992). Respondents were required to respond on a seven-

point Likert-type scale. The present study adopted the Manifest Needs questionnaire to

confirm that the measurement was appropriate for assessing the need for achievement.

Cronbach’s alpha coefficient for the instrument was 0.64—an acceptable level of internal

reliability (Nunnally, 1967). The items were aggregated and the average score was calculated

to provide a measure of need for achievement.

Work attitude

As previously noted, two work kinds of work attitude can be identified—attitude towards

specific jobs and attitudes towards the company. Organizational attitude reflects general

employment policies and practice, especially compared with other potential employers. In

contrast, job attitudes reflect the type of work, tasks, and immediate supervision experienced

by employees on the job. Thus, an employee can feel quite positive about the job because of

the immediate experience of the job, but feel negative towards the organization as a result of

policies on pay scales or promotion.

Attitudes towards specific jobs were measured by a 16-item instrument adapted from Milani

(1975). Attitudes towards the company were measured by 10-item instrument, also developed

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by Milani (1975). The overall attitude (towards the job and towards the organization) was

assessed by the sum of the scores (Shaw & Wright, 1967).

A check of internal reliability for the measure in this study yielded a result of 73%—which is

again acceptable (Nunnally, 1967).

Results

Table 1 presents descriptive statistics and Table 2 presents the correlation matrix for the three

variables in the current study. The table shows a significant positive association between a

need for achievement/work attitude and job performance at the significant level (P <0.01 and

0.05 respectively). The regression results for the job-performance measure were also found to

have positive and significant relationships with the need for achievement (p < 0.05) and

budgetary participation (p < 0.01) (see Figure 4). In contrast, there was no direct significant

relationship found between job performance and work attitude (p = n.a.).

Take in Tables 1, 2, and 3 about here

Take in Figure 2 about here

The results in Figure 2 and Table 3 suggest that a need for achievement and work attitude

affect job performance indirectly via budgetary participation.

The path model (Figure 1) is employed for the data analysis. The findings relating to the two

antecedent variables and job performance were decomposed and assessed in terms of the total

relationships. This allowed an estimation of the direct, indirect, spurious, and unanalyzed

relationships (Alwin and Hauser, 1975 and Duncan, 1966). Path coefficients (representing the

relationships between variables) were estimated by standardizing the β regression

coefficients. The relationships between the variables in the path model can be stated as two

equations:

Eq1: Y1= P31X1 + P32 X2 + P3aRi,

where Y1 is the participative budgeting, X1 the decentralized structure, X2 the need for

achievement, Pji the standardized partial regression coefficients (path coefficients), and R i the

standardized residual; and

Eq2: Y2= P41X1 + P42 X2 +P43X3+ P4bRi,

where Y2 is the managerial performance, X1 the decentralized structure, X2 the need for

achievement, X3 the participation in budgeting, Pji the standardized partial regression

coefficients (path coefficients), and Ri the standardized residual.

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Tests of hypotheses

Hypotheses 1 and 2 were tested by regressing participation in budgeting against work attitude

and the need for achievement using equation (1). The results are shown in Table 3.

The overall model was significant (F=6.445; p<0.05), and the two variables were significant

in explaining budgetary participation. Both of the paths shown in Figure 2 demonstrated

significant positive coefficients:

work attitude–budgetary participation: P31=0.182; p<0.05; and

need for achievement–budgetary participation: P32=0.248; p<0.01

Hypotheses 1 and 2 are therefore verified—managers with a positive attitude and a need for

achievement are more likely to be willing to participate in budgetary activities.

Hypothesis 3 was tested by regressing job performance against budgetary participation, work

attitude, and a need for achievement using equation (2). The results of the regression analysis

are presented in Table 4.

Take in Table 4 about here

The overall model was found to be significant (F=8.12, p<0.001). The path of budgetary

participation—job performance showed a significant positive relationship (P43=0.181,

p<0.05). Hypothesis 3 is therefore verified.

Indirect effects of the antecedent variables and job performance

The indirect effects consisted of the following paths:

Path (1): work attitude–budgetary participation–job performance: 0.192 x 0.211 =

0.0405; and

Path (2): need for achievement–budgetary participation–job performance: 0.248 x

0.211 = 0.0523.

Both of these relationships are meaningful because the magnitude satisfies the criterion

of 0.06 (Bartol 1983).

Take in Table 5 about here

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Table 5 indicates the breakdown components of the direct and indirect effects of the two

paths. The results suggest that budgetary participation mediates the relationship between (i)

job performance and (ii) work attitude/the need for achievement. Baron and Kenny (1986)

have argued that if a significant bivariate relationship exists between independent variables

and a dependent variable, the third variable functions as a mediator (in this case, budgetary

participation) under the following three conditions:

if the independent variables (in this case, work attitude and need for achievement)

are significantly related to the mediating variable (in this case, budgetary

participation);

if the mediating variable (in this case, budgetary participation) is significantly

related to the outcome variable (in this case, job performance) and

if the relationship between the independent variables (in this case, work attitude and

need for achievement) and the outcome variables and the path coefficient decreases

after controlling for the mediating variables (in this case, the relationship between:

(i) work attitude and (ii) the need for achievement and job performance directly).

The present study found that these three conditions were fulfilled only in the path ‘need for

achievement–budgetary participation’. Hence, budgetary participation acted as a partial

mediating variable—because the magnitude of the association between need for achievement

and job performance (zero order correlation of 0.343) decreased after controlling for the

mediating variables, but remained significant for need for achievement and job performance.

No significance was found for the direct path relationship between work attitude and job

participation. Budgetary participation acts as the full mediating variable—because the

magnitude of the association between WA and JP had a zero order correlation of 0.237. The

path coefficients decreased after controlling for the mediating variables, but were non-

significant. In this case, budgetary participation acted as a full mediator between work

attitude and job performance (Baron and Kenny, 1986); in other words, the relationship

between work attitude and job performance cannot exist without the employee’s

participation.

The remaining components of the correlation represented spurious effects (0.0145 for work

attitude and 0.043 for need for achievement). These reflect the influence of work attitude and

need for achievement—which are common antecedents of budgetary participation and job

performance.

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Discussion

As postulated, the findings of the study suggest that the job performance of employees in

public-sector organizations can be enhanced by encouraging participation in budgetary

activities. A need for achievement and a positive work attitude are significant antecedents to

budgetary participation—which, in turn, positively influences job performance.

The present study provides a better understanding of the relationship between budgetary

participation and job performance, It does this by extending previous studies that have

considered only the direct effects of these variables (Lau et al., 1995; Milani 1975; Gul et al.,

1995; Milani, 1975; Kenis, 1979). The results of the present study support those of Klich &

Feldman (1992), Hammer & Organ (1994), and Ferres et al. (2004)—in that employees’

work attitudes and their need for a sense of achievement are confirmed as significant

influencing factors to job performance during participation in budgetary activities (See Table

3 shows the significant levels of p < 0.01 and p < 0.05 respectively). Management can

motivate subordinates to have better performance by giving them more opportunities to

participate in the budget activities. Such budgetary participation can facilitate them to learn

and to acquire more knowledge or information (Shield & Young, 1993 and Parker & Wall,

1998). As a result, participants gain more sense of achievement and to change their working

attitudes. However, without the budgetary participation, the direct path relationship between

work attitude and job performance was found to have insignificant level (p = n.a.) after the

controlling of mediating variable (budgetary participation). The result further confirms that

budgetary participation plays significant role to improve the work attitude for subordinates.

The finding contributes to the public-sector management-accounting literature by extending

previous studies from the private sector to public-sector organizations (Harrison, 1992;

Nouri, 1994; Gul et al., 1995). Although previous studies have noted that public

organizations tend to have a greater degree of formal administrative control in budgeting

systems than is the case in the private sector (Burns & Stalker, 1961; Pugh et al., 1969;

William et al., 1990), the ‘de-bureaucratization’ and organizational restructuring of public-

sector organizations has meant that employees have more opportunities to participate in

budget activities (Oswick and Grant, 1996). Budgetary participation offers employees the

opportunity to obtain more relevant information and feedback to set budgetary goals. The

study further offers an explanation of the relationship between budgetary participation and

job performance. It finds that high budgetary participation should improve job performance

only when participants have a good work attitude and a significant need for achievement. On

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the other hand, the relationship between budgetary participation and job performance is

negative when participants have a poor work attitude and less need of achievement.

Moreover, the findings also contribute to public-sector accounting-based planning and

control systems with respect to employee job-related outcomes. The results of the study

suggest that the impact of such control systems act through individual-level variables. The

results support previous studies by Cassidy and Lynn (1989), Mia (1989), Brownell (1982),

and Subramaniam et al. (2002)—in that a need for achievement and work attitude are shown

to lead to better organizational outcomes. Furthermore, the current study also indicates that

the purpose of a budgeting system is not restricted to financial control alone; rather, a

budgetary system also influences behavioural aspects of employees with respect to the

budgetary process. This suggests two significant managerial implications for budget-related

matters.

First, the findings suggest that a positive work attitude can be fostered by providing

employees with greater responsibility and decision-making autonomy in their budgetary

participation. Employees are more likely to be motivated to participate in setting budgetary

targets—which, in turn, enhances their work attitudes (to both their jobs and the

organization). Such a positive work attitude can be enhanced by both extrinsic and intrinsic

rewards (Brownell and McInnes, 1986). For example, senior management should always

demonstrate their respect for their employees, provide more opportunities to work

independently, create more promotion prospects, pay more attention to their personal and

career development, offer more compliments, and provide employees with feelings of

security.

Secondly, employees with a significant need for achievement tend to set and strive for

challenging goals. If the employees have a significant sense of achievement, they are likely to

seek greater participation in budgeting because it helps them to gain appropriate job-relevant

information (which, in turn, helps in setting high, but achievable, budgetary targets) (Matsui,

1982). The present study also supports the argument that managers’ with a desire for success

are likely to take extra job responsibility, improve their work performance, gain more control

on the job, and try to perform better than other workers, and that such behaviour will lead to

improved job performance.

In short, through better understanding of individual-level behaviour, senior management can

effectively foster better job performance through the encouragement of budgetary

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participation, particularly among those who have a significant need for achievement and a

positive attitude.

Conclusions and limitations

This study is subject to several limitations. First, the results should be interpreted within the

usual limitations of survey research (Brownell, 1985). Data for the study were collected from

three public-service departments in Macau. The participants volunteered to participate in the

present study, and the sample was thus not strictly random. Because less than 100% of the

questionnaires were returned, non-responsive bias might exist. The demographic composition

of the present study and individual differences in the value of achievement, attitude, and job

performance might affect the results; these factors have not been investigated in the study.

The measurement of performance should, ideally, be undertaken at various points in time,

rather than only in a single period of time as occurred in the present study.

Secondly, the study was conducted solely within the public sector—which limits the

generalizability of the findings.

Thirdly, senior management was likely to have significant influence on how the departments

were managed. There might have been factors at work that were specific to the participating

departments; caution is therefore required in generalizing the results.

Fourthly, an employee’s performance might be affected by other variables—such as other

individual-level variables (for example, locus of control and tolerance for ambiguity);

organizational-level variables (for example, business strategy and corporate culture); and

external variables (for example, business environment and changing in the economic

conditions). These and other contingent variables (apart from budgetary participation) might

play an indirect role in the relationship between: (i) job performance; and (ii) a need for

achievement/work attitude. Finally, the measurement of attitude can be criticized on the

ground that two individuals might have the same score but not have identical attitudes

(Milani, 1975). The measurement of job performance has also been criticized—for being too

subjective (Brownell and Hirst, 1986). Because there is no perfect measuring instrument to

measure the selected variables, reliance must be placed on the internal reliability coefficients;

as previously noted, these reached a satisfactory level (Nunnally, 1967), although they were

not very high.

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Notwithstanding such limitations, the results provide an improved understanding of the effect

of individual-level behaviour on job performance in a budgetary context. Certainly, on the

basis of the current study’s findings, it would appear that an organization is likely to be better

off by improving employees’ attitudes and providing them with opportunities to achieve their

goals; moreover, budgetary participation can provide them the opportunity to take more

responsibilities and setting their own goals for the organization. As a result, job performance

will be improved.

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Appendix

Table 1 Descriptive StatisticsVariables Mean S.D. Actual range Theoretical

rangeCronbach’s

AlphaJob performance (Y) 3.86 0.96 2.00-6.21 1.00-7.00 0.68Work attitude ( X1) 4.12 1.24 1.00-5.63 1.00-7.00 0.73Need for achievement (X2)

4.51 1.46 1.00-6.20 1.00-7.00 0.64

Table 2 Pearson Correlation MatrixVariables WA NA BP JP

Work attitude (WA) 1.00Need for achievement (NA)

0.343** 1.00

Participation in budgeting (BP)

0.381** 0.218* 1.00

Job performance (JP) 0.237* 0.432** 0.412*** 1.00*p<0.05, **p<0.01, ***p<0.001

Table 3 Results of regression analyses using equation 1: Y1= P31X1 + P32 X2 + P3aRi,Dependent variables

Independent variables

Hypotheses Path coefficient

t-value p-value R2

BP NA H1 0.248 3.23 <0.01 0.187WA H2 0.182 2.27 <0.05

*Abbreviations as Table 2, F2,214, = 6.443, n= 216, p< 0.05

Table 4 Results of regression analyses using equation 2: Y2= P41X1 + P42 X2 +P43X3+ P4bRi,Dependent variables

Independent variables

Hypotheses Path coefficient

t-value p-value R2

JP WA Non- hypothesis

0.134 1.87 n.s. 0.227

NA Non- hypothesis

0.181 2.13 <0.05

BP H3 0.211 3.21 <0.01*Abbreviations as Table 2, F3,213, = 7.567, n= 216, p< 0.05

Table 5. Decomposition of observed correlations on job performanceCorrelation Direct

effectIndirect effect

Spurious

WA 0.237 = 0.182 + 0.0405 + 0.0145

NA 0.343 = 0.248 + 0.0523 + 0.043

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Figure 1: Model of the studyError: Reference source not found

Figure 2 Path Coefficients. Value for path coefficients are taken from Table 3. Error: Reference source not found

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