antecedents of budgetary participation: … · mr. bandi, dr., m.si,ak, as the head of master of...

perpustakaan.uns.ac.id digilib.uns.ac.id

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ANTECEDENTS OF BUDGETARY PARTICIPATION: ENHANCING EMPLOYEES’ JOB PERFORMANCE

THESIS

A thesis submitted in partial fulfillment of the requirement for the degree of Magister Sains

by :

FATMAWATI NIKMAH

NIM: S 4307067

FAKULTAS EKONOMI

UNIVERSITAS SEBELAS MARET

SURAKARTA

2010


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By:

FATMAWATI NIKMAH NIM: S 4307067


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By:



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STATEMENT

Name : Fatmawati Nikmah

NIM : S4307067

Study Program : Master of Accounting

Main Interest : Public Sector Accounting

I declared truthfully that this thesis entitled “Antecedent Budgetary

Participation: Enhancing Employees’ Job Performance” is originally made by

the researcher. The things related to other people’s works are signed as citation

and included in the he references.


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DEDICATION

My Parents,

Thank’s for the love and support... You give me strength and brave to face the world

My Brothers and Sister, Thank you for your support and suggestion...

All of my friends, Lets make the world happier guys......


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MOTTO

· All our dreams can come true, if we have the courage to pursue them....

· Trust in God, everything will be okey...

· Look Good By Doing Good.....


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ACKNOWLEDGEMENT

Assalaamu’alaikum Wr. Wb.

Alhamdulillah, Researcher thanks to presence of ALLAH SWT for the

overflows of blesses, grants, and guides so that Researcher able to finish this

thesis well. This thesis is compiled to equip the duties and fulfill the preconditions

to get the Master of Science degree in Faculty of Economics, University of

Sebelas Maret Surakarta.

Researcher realizes that during the thesis process, there are many helps

from other parties, directly and indirectly. Herewith, Researcher says many thanks

to various the following parties:

1. Minister of National Education of Indonesian Republic, for the willingness to

give grants in the form of scholarship “Beasiswa Unggulan Diknas”, in order

to complete the study in Master of Accounting Study Program, Faculty of

Economic, University of Sebelas Maret Surakarta.

2. Prof. Dr. Bambang Sutopo, M.Com., Ak., as The Dean of Faculty of

Economics, University of Sebelas Maret Surakarta and also as the main

counselor, thank you for all the guidance, inspiration, help, motivation,

critique, and suggestion that help the researcher to achieve the best result.

3. Mr. Bandi, Dr., M.Si,Ak, as The Head of Master of Accounting Program,

Faculty of Economics, University of Sebelas Maret Surakarta. Thank you for

give me the chance to study in MAKSI. I am happy to be part of MAKSI’s

family and I hope MAKSI will be more success in the future.


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4. Christiyaningsih Budiwati, S.E., M.Si, Ak, as the co-supervisor, for all the

guidance, help, motivation, critique, and suggestion that help the researcher to

finish this thesis. Thank you very much for your kindness and help. Without

your guidance, I can’t finish my thesis research.

5. Dra. Y. Anni Aryani, M. Prof. Acc., Ph.D., Ak and Drs. Muhammad Agung

Prabowo, M.Si.,Ph.D., Ak.as the examiners, thank you for the critique and

suggestions.

6. Drs. Hasan Fauzi, MBA. Ak, for opening the gate for me to study in this

faculty by accepting me in MAKSI International Class. I also want to say my

deeply thanks and appreciation for all your guidance, support, and motivation

during study in MAKSI.

7. Mr. Doddy Setiawan, S.E., M.Si., IMRI., Ak., Thank you for give me the

chance to study in MAKSI. I am happy to be part of MAKSI’s family.

8. The officials of Local Government of Surakarta who fill the questionnaires,

Thank you for the time, help, guidance and being my respondent.

9. Admission Staff, in Economics Faculty, University or Sebelas Maret

Surakarta thanks you for helping me to finish my study.

10. My family. Thank you for helping me doing my research and supporting me to

finish my study.

11. My best friends, Lisa, Mulia Dewi, Eny Ellyanora, thanks for the friendship.

Mba uut, Dini thanks for helping me to finish my thesis. Never give up, girls!!


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12. All of MAKSI’s students that I couldn’t write one by one. Hope this moment

will be our memorable moment for us. I love you all guys and I hope we can

walk together and still be Friendship.

Researcher realizes that this thesis is a long way off from perfection.

Hence, researcher expects all the constructive suggestion and criticism regarding

the content, grammar, or any other. Finally, researcher wants to apologize if there

are mistake and weakness in this thesis.

Wassalamu’alaikum. Wr. Wb.

Surakarta, May 2010

Regards,

Fatmawati Nikmah


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TABLE OF CONTENT

Page

APPROVAL PAGE ...................................................................................... ii

STATEMENT................................................................................................ iv

DEDICATION PAGE.................................................................................... v

MOTTO PAGE.............................................................................................. vi

ACKNOWLEDGEMENT ............................................................................ vii

TABLE OF CONTENT................................................................................. x

LIST OF TABLE ........................................................................................... xiii

LIST OF FIGURE.......................................................................................... xiv

LIST OF APPENDIX .................................................................................... xv

ABBREVIATIONS ....................................................................................... xvi

ABSTRACT................................................................................................... xvii

CHAPTER I. INTRODUCTION................................................................... 1

A. Research Background......................................................................... 1

B. Problem Statement ............................................................................. 5

C. Research Purpose ............................................................................... 6

D. Research Benefits .............................................................................. 6

CHAPTER II. LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT ................................................................ 7

A. Literature Review............................................................................... 7

1. Budgeting Process in Local Government.................................... 7

2. Budgetary Participation............................................................... 10


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3. Need For Achievement ............................................................... 13

4. Work Attitudes ............................................................................ 17

5. Employees’ Job Performance...................................................... 21

6. Need for achievement, work attitude and job performance ........ 23

B. Hypothesis Development ................................................................... 24

1. Need For Achievement and Budgetary Participation.................. 24

2. Work Attitudes and Budgetary Participation .............................. 26

3. Budgetary Participation and Employee’s Job

Performance ................................................................................ 27

C. Conceptual Schema............................................................................ 28

CHAPTER III. RESEARCH METHOD ....................................................... 30

A. Research Design................................................................................. 30

B. Population, Sample, and Sampling Technique................................... 30

C. Data Collection................................................................................... 31

D. Variables and Operasional Definitions .............................................. 32

E. Analysis Technique ............................................................................ 34

1. Descriptive Statistic .................................................................... 35

2. Validity and Reliability Test ....................................................... 35

3. Hypotheses testing ...................................................................... 36

CHAPTER IV. DATA ANALYSIS AND DISCUSSION ............................ 39

A. Data Description................................................................................. 39

1. Sample Selection......................................................................... 39

2. Descriptive Statistic .................................................................... 41


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B. Reliability Test ................................................................................... 41

C. Validity Test ....................................................................................... 42

D. Classic Assumption Analysis ............................................................. 43

E. Hypothesis Testing............................................................................. 48

CHAPTER V. CONCLUSION AND RECOMMENDATION..................... 59

A. Conclusion.......................................................................................... 59

B. Implications........................................................................................ 60

C. Research Limitations.......................................................................... 60

D. Suggestions......................................................................................... 61

REFFERENCES ............................................................................................ 62

APPENDIX.................................................................................................... 67


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LIST OF TABLE

page

Table 1 The amount of SKPD in Local Government of Surakarta........ 31

Table 2 Questionnaire Description ........................................................ 40

Table 3 Descriptive Statistic of the Variables ....................................... 41

Table 4 Reliability Result ...................................................................... 42

Table 5 Validity Result .......................................................................... 43

Table 6 Multicollinearity test result....................................................... 44

Table 7 Multicollinearity test result....................................................... 44

Table 8 Result of One-Sample Kolmogorov-Smirnov test.................... 47

Table 9 Result of One-Sample Kolmogorov-Smirnov test.................... 47

Table 10 Pearson correlation matrix ........................................................ 49

Table 11 Results of regression analysis using equation (1)..................... 50 (Dependent variable: Budgetary Participation)

Table 12 Results of regression analysis using equation (2)..................... 51 (Dependent variable: Job Performance)

Table 13 Decomposition of observed correlations on job performance.. . 53


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LIST OF FIGURE

Page

Figure 1 Local Government Budgeting Arrangement Cycle .................. 10

Figure 2 Conceptual schema ................................................................... 29

Figure 3 Scatterplot Graphic ................................................................... 45

Figure 4 Scatterplot Graphic ................................................................... 46

Figure 5 Path Model................................................................................ 52


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LIST OF APPENDIX

Page

APPENDIX I. Reliability test ................................................................. 67

APPENDIX II. Validity test ..................................................................... 76

APPENDIX III. Multicolinearity test ........................................................ 86

APPENDIX IV. Heteroskedasticity .......................................................... 90

APPENDIX V. Normality test .................................................................. 96

APPENDIX VI. Regression test................................................................. 103

APPENDIX VII. Result of T-Test............................................................... 107

APPENDIX VIII. Regression Analysis for two sub samples ....................... 109 (Kelurahan and Non Kelurahan)

APPENDIX VIX. Questionnaires................................................................. 117


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ABBREVIATIONS

APBD : Anggaran Pendapatan dan Belanja Daerah

DPRD : Dewan Perwakilan Rakyat Daerah

KUA : Kebijakan Umum Anggaran

PPAS : Prioritas dan Plafon Anggaran Sementara

RAPBD : Rencana Anggaran Pendapatan dan Belanja Daerah

RKA : Rencana Kerja dan Anggaran

RPJPD : Rencana pembangunan Jangka Panjang Daerah

RPJMD : Rencana Pembangunan Jangka Menengah Daerah

RKPD : Rencana kerja Pemerintah Daerah

SKPD : Satuan Kerja Perangkat Daerah

TAPD : Tim Anggaran Pemerintah Daerah


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ABSTRACT



This research investigated the antecedent budgetary participation (need for

achievement and work attitude), then assess the impact on employees’ job performance.

The data were obtained using questionnaires that distributed to respondents. Seventy two respondents were chosen as samples and path analysis was used as techniques to analyze the data.

The result of this research showed that need for achievement has significant positive association with budgetary participation. However, the result found that there is no significant association between work attitude and budgetary participation. Furthermore, the researcher found that budgetary participation had a significant positive association with job performance (e.i managerial performance). The researcher concludes that when employees have a higher need for achievement, they will tend to higher participation in budgetary process, and this condition will enhance employees’ job performance. Here, budgetary participation acted as mediating variable between need for achievement and job performance.

Keywords: Need for achievement, work attitude, budgetary participation, job performance, path analysis.


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ABSTRAK



Penelitian ini bertujuan untuk meneliti variabel anteseden dari partisipasi

anggaran (kebutuhan berprestasi dan sikap kerja), kemudian menilai pengaruhnya terhadap kinerja pegawai.

Data pada penelitian ini didapatkan dari kuesioner yang telah disebarkan kepada responden. Tujuh puluh dua responden digunakan sebagai sampel dan analisis jalur (path analysis) digunakan untuk menganalisa data.

Hasil dari penelitian ini menunjukkan bahwa variabel kebutuhan berprestasi mempunyai hubungan positif yang signifikan terhadap partisipasi anggaran. Namun demikian, hasil penelitian menemukan tidak ada hubungan yang signifikan antara sikap kerja dengan partisipasi anggaran. Selanjutnya, peneliti menemukan bahwa partisipasi anggaran mempunyai hubungan positif yang signifikan terhadap kinerja pegawai (kinerja managerial). Peneliti menyimpulkan bahwa ketika mempunyai kebutuhan berprestasi yang tinggi, maka mereka cenderung mempunyai partisipasi yang tinggi dalam proses penganggaran, dan hal ini akan meningkatkan kinerja pergawai. Dalam hal ini, partisipasi anggaran sebagai variabel mediasi/perantara antara variabel kebutuhan berprestasi dengan kinerja pegawai. Kata kunci: Kebutuhan berprestasi, sikap kerja, partisipasi anggaran, kinerja

pegawai, analysis jalur.


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CHAPTER I

INTRODUCTION

A. Research Background

Budgeting in public sector organization is political process. Thus, budget

is an accountability instrument for public funding management and

implementation of programs which cost by public fund (Mardiasmo 2005). In

other words, public budgeting can be defined as financial condition of

organization that includes revenue, expenditure, and activities (Ompusunggu and

Bawono 2006).

Public sector budgeting is related with the process to decide the amount of

fund allocation for each program and activity in monetary unit, which using public

fund (Sardjito and Muthaher 2007). The stage of budgeting process is important,

because ineffective budget which is not performance-based oriented, will make

the predetermined planning can be failed. Budget is managerial plan for action to

facilitate the organization to achieve its goals (Rahayu, Ludigdo, and Affandi

2007).

Budget is a tool for government to direct the social-economy development,

to assure continuity, and improve the quality of society life (Mardiasmo 2005). In

order to obtain a good outcome of local government budget for society, the

participation of stakeholder in budgetary process is needed. Budgetary

participation in public sector occurred when among legislative, executive, and

society cooperate in budget formulation process. Budget made by Chief of local


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government which the proposal come from institution units that made by manager

unit. After thus, the draft of local government budget will be established by

executive with local government legislative (DPRD) based on the government

regulation (Halim 2007).

Local Government Budget (APBD) comes into arrangement relied on

performance approach, particularly pertained to a budget system focusing on

output achievement from pre-determined cost or input allocations. Regarding to

this performance approach, APBD must be targeted into objective achieved for

one budget year. Based on the Minister of Domestic Affair’s Regulation No.

13/2006 that covered the standard of local government budget draft formulation,

the proposal of local government budget arranged by executive budget team and

local government institution units (Satuan Kerja Perangkat Daerah/SKPD). Here,

the each manager unit (SKPD) has an important role for compiling the program-

related budget form their own unit as a part of the whole local government

budgeting (APBD). Thus, in performance-based budgeting process, each

institution unit should be involved in budgeting process; it means more employees

have allowed participating in budgetary activities.

Thompson as cited in Williams et al. (1990) challenged researchers to

examine budgetary behavior in such public sector organizations, as the budgetary

behavior may be different in these organizations compared to the behavior in

profit-making and less bureaucratic organizations. Similarly, Williams et al.

(1990) suggested that future budgetary participation and performance research in

the public sector is important as there may be a universal set of budget-related


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behavior factors which apply with equal facility to both sectors, but that particular

combinations dominate depending on the state of other organizational variables.

Moreover, the budgetary behavior in public sector organizations in the developed

countries might be different from what is observed in developing countries.

Furthermore, many of the prior studies on the budgetary participation and

performance relationship have produced conflicting results. Empirical evidence on

the relationship between budgetary participation and performance has been

offered by several researchers. Some studies have found a positive relationship

between budgetary participation and job performance (Nouri&Parker 1998;Yuen

2007;Yahya et al 2008). Other studies have suggested that there is a weak positive

relationship (Milani, 1975), or even a negative relationship (Kenis, 1979),

between the two factors. The other research conducted by Sardjito and Muthaher

(2007) showed that budget participation had direct effect on managerial

performance which there is positive relationship between budgetary participation

and manager performance in local government.

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


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developing appropriate accounting-based planning and control systems that

facilitate effective budgetary development (Yuen 2007).

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: (1) need for achievement; and (2) work attitudes. However, previous

studies of budgeting and performance (Milani 1975; Steers 1975; Alam and Mia

2006) have identified job attitude among employees and need for achievement can

be represent as variables in the job performance.

According to Yuen (2007) who conducted the research about the

antecedent of budgetary participation in the context of public sector organization

in Macau, found that the two antecedent factors - a need for achievement and

work attitude - have a significant positive relationship with budgetary

participation, and concluded that indirect relationship exist between those two

antecedent factors and the dependent variable (job performance) with budgetary

participation as an intervening variable. From those result, this study wants to

adapt that research in public sector organization especially in the budgeting

process in Local Government’s Surakarta. As the recent public sector reforms

have also included a move towards decentralization to improve efficiency and

performance therefore budgetary processes in the local government have been

more participative. Since the autonomy regulation declared in 1999 and revised by

Law No.32/2004, each local government should be more independence including

in financial management. Additionally, according to Law no.17/2003, Local


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Government Budget (Anggaran Pendapatan dan Belanja Daerah/APBD) comes

into arrangement relied on performance approach, where each institution unit

(SKPD) should be involved in budgeting process. It explicitly in Minister of

Domestic Affair’s Regulation No.16/2006 which mandated that every SKPD must

arrange work program and budget (Rencana Kerja dan Anggaran/RKA).

This research examined the two antecedents factors (a need for

achievement and a work attitude) of participation in local government budgetary

activities and then to assess the impact of these two variables on job performance

in the context of managerial performance. So this research investigated budgetary

participation as intervening variable in the relation between the two antecedents

(need for achievement and work attitude) and managerial performance.

B. PROBLEM STATEMENTS

The results from previous studies showed the relationship between

budgetary participation and job performance might be different under various

working conditions. As a result, the impact of budgetary participation on

performance in public sector also might be different from private sector, because

it has different working conditions. In addition, as governmental units, local

government is more hierarchical, bureaucratic and structured according to a

formal system of authority than privat sectors (Jermias and Setiawan 2007). Based

on the introduction explained previously, the research the problem statement can

be derived as follows: how are the relationship between need for achievement and

work attitude with the budgetary participation; and then through the budgetary

participation, how is the impact of these two variables on job performance in the

context of public-sector organizations ?


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C. RESEARCH PURPOSE

According to the research problems, the purposes of this research are:

1. To examine the relationship between an employees’ need for achievement

and budgetary participation.

2. To examine the relationship between an employees’ work attitude and

budgetary participation.

3. To examine the relationship between budgetary participation and

employees’ job performance in local government as a public sector

organization.

D. RESEARCH BENEFITS

The result of this research to be expected can give input, benefit for Local

government, about budgetary participation from each unit managers, and know

the influence of that participation in regional budget arrangement to performance.

And also show how is the antecedents’ factors such as positive job attitude and a

need for achievement influence the budgetary participation and then to assess the

impact of these two variables on job performance of local government officials as

budget actor according Law number 32/2004 about local government and Minister

of Domestic Affair’s Regulation No. 13/2006. The research result hopefully can

give contribution to academician to the development of public sector accountancy

literature especially in management accounting system development in public

sector.


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CHAPTER II

LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT

A. Literature Review

1. Budgeting Process in Local Government

Budget is a tool of accountability, management and economic policy. As

an instrument of economic policy, the budget function is created growth and

economic stability, also for even distribution of income, in order to achieve

government goals (Law No.17/2004). Local government budget (APBD) which

presented yearly by executive, give the detail information for legislative and

society about what programs that government planned to improve the quality of

life of the people, and how those programs will be funded. According to

Mardiasmo (2005), budgeting arrangement process has four purposes, such as:

a. Help government to achieve the fiscal goal and improve coordination inter

section/units in government surroundings.

b. Help to create the efficiency and fairness in providing public goods and

public service trough the priority making.

c. To make possible for government to fulfill the expenditure priority.

d. Improve the government responsibility and transparency to legislative and

society/public.


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The appearance of local government autonomy system, since the declared

of Law no.32/2004 about local government and also Law no. 33/2004 about

financial balancing between central government and local government, brought

the fundamental change in the governance government and financial relationship,

also important change in local budgeting management. Local government budget

(APBD) arranged based on performance approach, that is a budgeting system

which give priority to the effort for performance achievement or output of the

fund allocation that was planned (Government Regulation No.58 / 2005).

Based on performance approach, APBD was arranged relied on a certain

target that will be achieved in one budget year. Preparing the local government

budget draft (RAPBD), local government and legislative (DPRD) arrange the

general policy of local government budget (APBD), which included guidance and

general determinations that will be agreed as guideline for local government

budget arrangement. The arrangement of general policy of APBD constitute the

effort for the achievement of vision, mission, goal, and target were determined in

Local government middle term development planning (Rencana Pembangunan

Jangka Menengah Daerah/RPJMD) for 5 (five) year period, and mayor program

which is arranged based on local government long term development planning

(Rencana pembangunan Jangka Panjang Daerah/RPJPD) that consider with the

national middle term development planning (Rencana Pembangunan Jangka

Menengah Nasional/RPJMN), and also the minimal service standard that

established by government.


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In addition, based on Minister of Domestic Affair’s Regulation

No.13/2006 about the standard of local government budget management, for local

government budgeting (APBD) arrangement, after there is agreement (MoU)

about general policy of budgeting (KUA PPAS) between the chief of local

government and legislative, every institution unit (SKPD) of local government

will arrange program planning and budget of institution unit (RKA-SKPD) with

use local government middle term expenditure frame-approach, harmony

budgeting, and performance-based budgeting. RKA-SKPD will be used by local

government budgeting team (Tim Anggaran Pemerintah Daerah/TAPD) as

material for arrange the local government budgeting draft (RAPBD). Finally,

RAPBD will be discussed together by TAPD and legislative budgeting team (Tim

Anggaran DPRD/Badan Anggaran DPRD), and after evaluated by governor,

those RAPBD will be established as APBD. The cycle of Local Government

Budgeting Arrangement (APBD Arrangement) can be shown in figure 1:


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Figure 1

Local Government Budgeting Arrangement Cycle

(source: Kawedar, Rohman & Handayani 2008)

2. Budgetary participation

Budgetary participation refers to the extent to which manager participate in

preparing the budget and influence the budget goals of their responsibility center

(Kennis 1979). According to Brownell (1986), budgetary participation is defined

as a process whereby subordinates are given an opportunity to get involved in and

have influence on the budget setting process. Budgetary participation also can be

TAPD

MoU between the Legislative Chairman and Major of the city

Discussed with

DPRD

RPJMD

RKA-SKPD

KUA

Renja SKPD

Guidance Of RKA SKPD Arrangement

PPAS

Renstra SKPD

RKPD

RPJM

RAPERDA APBD

5 years 5 years

5 years 1 year 1 year

1 year 1 year

1 year

RKP


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refers to the budget process planning in which managers who are involved to

decision making from the information exchange in their organization (Shields and

Shields, 1998).

Participative budgeting gives an opportunity for managers to involve in

budget arrangement. Generally, the whole of budget goals should be

communicated to managers who will help to expand the budget to fulfill the goal.

In budget arrangement, programs were translated by manager responsibility in

conducting the program or part of the program. Basically, budget arrangement is a

decision process of the role of each manager in conducting the programs.

Budgetary participation in public sector occurred when among legislative,

executive, and society cooperate in budget formulation process. Budget made by

Chief of local government which the proposal come from institution units that

made by manager unit. Those, each institution unit of local government should be

involved in budgeting process. It means more employees have allowed

participating in budgetary activities.

Many authors have suggested that participation in setting budgetary goals

encourages managers to identify with the goals, accept them more fully and work

toward their achievement. It is argued that budgetary participation provides an

avenue for subordinates to communicate their private information to

organizational decision-makers and the opportunity to obtain job-relevant

information to assist their decision-making (Chong and Chong 2002).


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The degree of budget participation developed by Milani (1975) can be

measured from the 6 (six) perception of:

a. The portion of the budget the employee involved in setting;

b. The kind of reasoning provided to the employee by a superior when the

budget is revised;

c. The frequency of budget-related discussions initiated by the employee;

d. The amount of the influence the employee felt he has on the final budget;

e. The important of the employee’s contribution to the budget; and

f. The frequency of budget-related discussions initiated by the employee’s

superior when budget are being set.

Sord and Welsch in Sardjito and Muthaher (2007) suggests that the higher

participation would result higher good morality and initiative. Participation in

budgeting activities showed a positive significant influence to employees’

attitude, improve the production quantity and quality, and also improve the

coordination among managers.

While the issue of whether higher levels of budgetary participation

enhance managers’ performance has been widely studied in the accounting

literature, empirical findings to date have proved to be mixed (Wentzel 2002).

Some studies found that budgetary participation is related to job performance and

the relationship is positive (Nouri and Parker 1998; Yuen 2007). Some studies

link the intervening variables such as motivation (Brownell and McInnes, 1986),

budget adequacy and organizational commitment (Nouri and Parker, 1998) and

some studies link the moderator variables such as organization culture (Sardjito


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and Muthaher 2007), managerial attitude and motivation (Mia 1988). The results

showed both a positive and negative relationship between budgetary participation

and job performance. Such inconsistent findings have prompted several

researchers to examine the antecedent variables that affect job performance

indirectly during budgetary participation (Yuen 2007). In this research will

examine the need for achievement and work attitude as antecedent factors of

budgetary participation.

3. Need for achievement

It may be stated that need theory as the theory of motivation that addresses

what people need or require to live a life of fulfilment, particularly with regard to

work. Need theory has a long-standing tradition is motivation research. There are

various need theories of motivation. One of the most widely mentioned theories of

motivation is the Hierarchy of Needs Theory put forward by psychologist

Abraham Maslow. Maslow views human motivation in terms of a hierarchy of

five needs, ranging from the most basic physiological needs to the highest needs

for self-actualization. According to Maslow, individuals will be motivated to fulfil

whichever need is the most powerful for them at a given time. Starting with the

physical needs, which are the most basic, each need must be satisfied before the

individual desires to satisfy a need at the next higher level. It is in the following

hierarchy of importance according to immediacy that Maslow places human

needs:

(a) Physiological needs: These are the basic needs for sustaining human life

itself, such as air, water, food, sleep, shelter, warmth and sex. They are as


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basic as needs that people will be motivated to fulfill them first through

whatever behavior achieves this end.

(b) Safety or security needs: They consist of the need for clothing, shelter,

and an environment with a predictable pattern such as job security,

pension, insurance etc. People are motivated to fulfill these needs only

when the physiological needs are mostly satisfied.

(c) Affiliation, acceptance, love or social needs: Since people are social

beings, they need to belong, to be accepted and loved by others.

(d) Esteem needs: They include the need for power, prestige, status,

achievement, and recognition from others. Satisfaction of the self-esteem

need leads to feelings of self-confidence, worth, capability, and adequacy,

of being useful and necessary in the world.

(e) Need for self-actualization: Maslow regards this as the highest need in his

hierarchy. This is the concept of fulfilling one’s potential and becoming

everything that one is capable of becoming.

Need for Achievement as the part of esteem needs can be referred as an

individual's desire for significant accomplishment, mastering of skills, control, or

high standards. People high in need for achievement are characterized by a

tendency to seek challenges and a high degree of independence. Their most

satisfying reward is the recognition of their achievements. Sources of high need

for achievement include:

a) Parents who encouraged independence in childhood;

b) Praise and rewards for success;


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c) Association of achievement with positive feelings;

d) Association of achievement with one's own competence and effort,

not luck;

e) A desire to be effective or challenged;

f) Intrapersonal Strength. (www.wikipedia.com)

A need for achievement also can be defined as the personal striving of

individuals to attain goals within their social environment (Cassidy and Lynn

1989). The need for achievement is the employees' desire to perform to high

standards and to excel in their job. Individuals with a high need for achievement

like to set their own personal goals and are opposed to the organization setting

goals. These individuals also like goals in which they have a fifty percent chance

of achieving, because they do not want goals that are too easy to achieve.

Individuals with a high need for achievement want frequent, specific feedback and

to know how well they are performing their job. Individuals with a high need for

achievement also want to be in control of their workplace and work environment

and to be responsible for their productivity (Rayburn, Hammond, and Overby

2004). Individuals high in achievement needs have been characterized as

‘realistic’ and generally have occupational goals that are congruent with their

abilities. They are also found to be flexible in seeking detailed information and

feedback from a variety of sources to help in their pursuit of excellence

(Subramaniam 2002).

Persons with a high need for achievement are potentially useful members

of an organization because they accept competitive situations, tend to be


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independent, and have an interest in excellence. They are also willing to take

personal responsibility for success and generally perceive themselves to have a

higher ability than the others (Yuen 2007).

According to Choi (2006), a high need for achievement is characterized by

the following:

1) a high interest in tasks which require a considerable level of skill and

problem solving ability,

2) a tendency to set moderately difficult goals,

3) a preference for concrete and quantitative feedback, and

4) a pursuit of satisfaction which is derived from the task itself and task

performance.

The need for achievement is an unconscious motive that drives individuals

to perform well or to improve their performance. Individuals with a high need for

achievement have a propensity to demonstrate their ability in overcoming difficult

tasks while maintaining consistently high standards. Such individuals consistently

seek feedback on their performance in order to learn from their mistakes and

prefer quantitative feedback. One reason why individuals with a high need for

achievement seek objective feedback is that their motivation is intrinsic more so

than extrinsic and therefore they prefer objective appraisal rather than approval or

acceptance based on the subjective appraisals of others (Loon and Casimir 2008).

According to Steers (1975) a high need for achievement subjects will tend

to place a higher valence on the attainment of their performance objectives than

will low need for achievement subjects, assuming such objectives serve to cue


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achievement- oriented behavior. Thus, when the tasks are of a challenging nature,

he argued that high need for achievement subjects will manifest high expectations

of task accomplishment and will exhibit a high level of effort and concomitant

involvement in their work. He found that individuals with strong higher order

needs demonstrate higher performance than individuals with weaker higher order

needs.

4. Work attitudes

Attitude is an important variable in human behavior. For better

understanding, it is important to discuss the meaning and definition of attitude.

There are six salient features, which contribute to the meaning of attitude

(Aswathappa in Jegadeesan 2007) such the followings:

a. attitudes refer to feelings and beliefs of individuals or group of

individuals;

b. the feelings and beliefs are directed towards other people, objects or ideas;

c. they tend to result in behavior or action;

d. they can fall anywhere along a continuum from very favorable to very

unfavorable;

e. they endure;

f. all people, irrespective of their status or intelligence, hold attitudes.

Individuals acquire attitudes from several sources but the point to be

stressed is that the attitudes are acquired but not inherited. The most important

sources of acquiring attitudes are direct experience with the object, association,

family, neighborhood, economic and social positions and mass communication.


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Individuals possess hundreds of attitudes. But organizational behavior is

concerned with work-related attitudes, which are mainly three: job satisfaction,

job involvement and organizational commitment (Jegadeesan 2007).

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

predispositions towards their jobs and employers in a budgetary context.

Following to Festinger’s theory of cognitive dissonance, it may argued 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 (Mia 1988; Yuen 2007).

Work attitude is important because committed executives are expected to

exemplify a willingness to work harder to achieve organizational goals.

Executives demonstrating this commitment have a greater desire to remain

employed with that organization. (Pool and Brian Pool 2007).

Milani (1975) divided working attitudes into job attitudes and organization

attitudes. 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. Job related attitudes also play a major role in

shaping the work behaviors of managers in organizations (Jayan 2006).

Lynn in Jayan (2006) have developed a theoretical model to describe the

differential relationship that organizational attitudes (organizational commitment


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and satisfaction) and Job attitudes (Job involvement and satisfaction) have with

several behavior intentions (turnover, absenteeism and performance).

The work attitudes investigated in this study included job satisfaction and

organizational commitment. In this present study, work attitude is related to job

satisfaction as attitude toward job and affective commitment as attitude toward

organization (Muse and Stamper 2007; Larson and Luthans 2006).

4.1. Job satisfaction as attitude toward job

This study used the global approach over the dimensions approach,

conceptualizing job satisfaction as the degree of positive emotions an employee

has toward a job. According to Shahnawaz and Jafri (2009) job satisfaction has

been defined as a pleasurable emotional state resulting from the appraisal of one’s

job - an affective reaction to one’s job and an attitude towards one’s job. Job

satisfaction also can be refers to one’s feelings towards one’s job. It can only be

inferred but not seen. Positive attitudes towards the job are conceptually

equivalent to job satisfaction and negative attitudes towards the job indicate job

dissatisfaction. If any employee likes his job intensely he will experience high job

satisfaction. If he dislikes his job intensely, he will experience job dissatisfaction

(Jegadeesan 2007).

The job satisfaction measurement that has been used for public sector

organization in previous study conducted by Baptiste (2008), focuses on

employees being satisfied with eight categories of their job: (1) sense of

achievement, (2) scope of using initiative, (3) influence over job, (4) pay, (5) job


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security, (6) training received, (7) the work they do, (8) involvement in decision

making.

4.2. Affective commitment as attitude toward organization

Organizational commitment reflects the extent an individual identifies

with an organization and committed to its organizational goals. (Pool and Brian

Pool 2007). Whereas satisfaction means positive emotions toward a particular job,

organizational commitment is the degree to which an employee feels loyalty to a

particular organization (Elanain 2009). Similar to previous study about

organizational commitment (Muse and Stamper 2007; Larson and Luthans 2006;

Elanain 2009) study, this research conceptualized organizational commitment as

an affective form of commitment based on feelings of loyalty toward the

organization (Allen and Meyer, 1990; 1991).

Affective (or attitudinal) commitment is defined as the willingness to

execute continuous effort for the success of the organization. It is characterized by

a strong belief in, and acceptance of, the organization’s goals and values (Yahya

et al 2008). As noted Parker and Kyj (2006), affective commitment is

characterized by: (1) strong belief in the goals and values of the organization, (2)

willingness to exert considerable effort to help the organization to reach its goals,

and (3) strong desire to maintain organizational membership. For individuals who

are committed to their organization, the desire to achieve organizational goals

extends beyond personal interests in acquiring tangible organizational rewards

such as income or promotion. Committed individuals exhibit a willingness to aid


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the organization even if direct reward is not contingent upon that aid. Committed

employees identify with organizational success (Parker and Kyj 2006).

5. Employees’ job performance

Job performance is a commonly used, yet poorly defined concept in

industrial and organizational psychology, the branch of psychology that deals with

the workplace. It most commonly refers to whether a person performs their job

well (www.wikipedia.com). Job performance is the degree of how an individual

manager perceives the resources to fulfill and support job requirement. The job

requirement some concerns the budget process to show the managers' decision

making to archived their job performance and job outcome (Agbejule and

Saarikoski 2006). In this study the employees’ job performance refers to the

managerial performance. It means job performance is the competences of

employees in conducting the managerial activity include planning, investigating,

coordinating, evaluating, supervising, staffing, negotiating and representing.

Effective managerial performance may be regarded as depending on competence

in the areas of managerial activity.

There are some indicators develop by Mahoney at all (1963) to measure

the managerial performance such as the followings (Frucot and White 2006;

Parker and Kyj 2006):

a. Planning

Determining goals, policies, and courses of action (e.g., work

scheduling, budgeting, programming).


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b. Investigating

Collecting and preparing information for records, reports and accounts

(e.g., measuring output, record keeping, job analysis).

c. Coordinating

Exchanging information with people in other organizational units in

order to relate and adjust programs (e.g., advising other departments,

liaison with other managers, arranging meeting).

d. Evaluating

Assessment and appraisal of proposals or of reported or observed

performance (e.g., employee appraisals, judging output records,

judging financial reports, product inspection).

e. Supervising

Directing, leading and developing the subordinates (e.g., counseling,

training and explaining work rules to subordinates; assigning work and

handling complaints).

f. Staffing

Maintaining the work force of institution units (e.g., recruiting,

interviewing and selecting new employees; placing, promoting and

transferring employees).

g. Negotiating

Purchasing, selling or contracting for goods or services (e.g.,

contracting suppliers, dealing with sales representatives, collective

bargaining).


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h. Representing

Advancing the general interest of the organization through speeches,

consultation, or contact with others outside the organization.

i. Overall Performance

Evaluation of the overall performance.

6. Need for achievement, work attitude and job performance

Some 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 (Yuen 2007). Need for

achievement has long been recognized to influence job performance. A sense of

achievements promote good job performance. Better performance results from

employees’ passion for achievement (Alam and Mia 2006). Individuals with a

high need for achievement want frequent, specific feedback and to know how well

they are performing their job (Rayburn, Hammond, and Overby 2004).

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. 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.

As the need for achievement, work attitude also were examined by some

previous studies was offered as factor which lead to or effect better performance.


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Such as Milani (1975) suggested that attitude toward the job is offered as an

intervening factor which lead to better performance. He also suggested that good

attitude toward company or organization will lead a more effective overall

performance for the organization. Mia (1988) found that manager’s attitude

appear to be a contingent variable moderating the relationship between their

budget participation and performance. The result revealed that budget

participation by managers who had a more favorable attitude was associated with

improved performance while that budget participation by managers who had a less

favorable attitude was associated with hampered performance. In addition, Yuen

(2007) found 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. The present study examined the need

for achievement and work attitude as the antecedent of budgetary participation in

order to enhance job performance.

B. Hypothesis Development

1. Need for achievement and budgetary participation

A need for achievement has long been thought to influence job

performance. Locke in Alam and Mia (2006) suggested that a sense of

achievement promotes motivation and good job performance. The importance of a

sense of achievement lies in the belief that one should work hard to accomplish

difficult but challenging goals at work.


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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 (Yuen 2007). Given that budget participation is

an important organizational process through which managers may exchange job-

relevant information, it is possible that managers’ need for achievement may

affect their desire for participation in budget setting. The need for achievement

acts as a motivating factor for employees to participate in budget setting as it

facilitates their performance improvement (Alam and Mia 2006).

Steers (1975) also found that need for achievement does have an important

effect on the relationship between performance and job attitudes. Findings

concerning need for achievement are consistent with the argument advanced

earlier that high need for achievement subjects would exhibit a relatively strong

association between performance and satisfaction because superior performance

in itself often represents a form of intrinsic reward for such persons and often

leads to the receipt of positively extrinsic rewards from the organization.

Subramaniam (2002) stated that increasing participation in the budgetary

process becomes useful for managers with high need for achievement because

participation helps them gain appropriate job-relevant information and set more

challenging yet attainable targets. Thus, from a psychological viewpoint,


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managers with high need for achievement would seek to have greater control over

their work environment in order to maximize the probability of achieving or

attaining their goals, and budgetary participation facilitates achieving such

control. So, it suggest that managers’ need for achievement may lead to (or act as

an antecedent of) their budget participation, which in turn may positively

influence their performance. As results of the above discussion, Hypothesis (H1)

can be stated as follows:

H1 : There is a direct and positive association between an employee’s need

for achievement and employee’s budgetary participation.

2. Work attitudes and budgetary participation

According to Muse and Stamper (2007), work attitude like job satisfaction

and affective commitment represent affective states or feelings employees may

have toward their job and work organization. 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. Conversely, employees with negative work attitudes

might not care about achieving their budgeting goals during budgetary

participation (Yuen 2007).

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

belief that a good attitude towards job and organization will lead to a more


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effective overall performance through participative budgeting. The relationship

between budget participation and work attitudes (job satisfaction and affective

commitment) should therefore be tested. The research conducted by Yuen (2007)

reported that managers with a positive attitude are more likely to willing to

participate in budgetary activities. H2 can thus be formulated as follows:

H2 : There is a direct and positive association between an employee’s work

attitude and employee’s budgetary participation.

3. Budgetary participation and employees’ job performance

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.

Firstly, psychological theory suggests that participation is related to

performance through self-identification and ego-involvement with budget goals.

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

subordinates and superiors, thus leading to improved cognition and enhanced

decision-making (Shields and Young, 1993). As a result, participation can

promote better performance through facilitation of learning and knowledge

acquisition.

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

achievement and positive job attitudes are likely to seek greater control over their

working environment, and that budgetary participation could therefore provide


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them with such control. The previous research result conducted by Yuen (2007)

found that there is a significant positive relationship between budgetary

participation and job performance. So, H3 is therefore postulated as follows:

H3 : There is a direct and positive association between an employee’s

budgetary participation and employee’s job performance.

C. Conceptual Schema

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

antecedent variables of participative budgeting:

(1) managers’ need for achievement; and

(2) manager’s work attitudes.

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 enhanced. These propositions, as shown in

Figure below:


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H2

H3 H1

Figure 2

Conceptual schema

This research consider only the indirect relationship between the two

antecedent variables (need for achievement and work attitude) and the dependent

variable (job performance), which budgetary participation is taken as the

intervening variable in this indirect relationships. No hypothesis is developed for

the direct relationship between those two antecedent variables and job

performance.

Budgetary Participation

Job Performance

Need for A achievement

Work attitude


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CHAPTER III

RESEARCH METHOD

A. Research Design

This research is quantitative study, and its type is a hypothesis testing.

Sekaran (2003) states that studies engage in hypothesis testing usually explain the

nature of certain relationships, or establish the differences among groups or the

independence of two or more factors in a situation.

B. Population, Sample, and Sampling Technique

Population refers to the entire group of people, events, or things of interest

that the researcher wishes to investigate (Sekaran 2003). The population in this

research is the employees who participate in the budget setting process of local

government Surakarta. In the process of local government budget setting,

participation from each of institution units (Satuan Kerja Perangkat Daerah

/SKPD) are needed, because they should be arranged the budget program planning

(Rencana Kegiatan Anggaran/RKA) for their units. Here, researcher chose the

managers of institution units (SKPD) of local government of Surakarta that

participate in the budget setting process of local government Surakarta, who has

role in the units to decide the budget as respondent.


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C. Data Collection

This research used survey method. The data obtained by listing question

(questionnaire). The questionnaire spread directly (questionnaire was sent directly

to the respondent) for the each manager of institution units (Satuan Kerja

Perangkat Daerah/SKPD) as decision maker (Pengguna Anggaran/Kuasa

Pengguna Anggaran) who responsible about the budget of their own institution.

According to Local Government of Surakarta’s Regulation No.8 /2008

about Local Goverment Organizing and Managing Section (Susunan Organisasi

dan Tata Kerja Perangkat Daerah), the amount of institution units (SKPD) are

such the following:

Table 1 The amount of SKPD in Local Government of Surakarta

NO SKPD AMOUNT

1 Bagian 9

2 Sekretariat DPRD 1

3 Dinas 15

4 Inspektorat 1

5 Badan 4

6 Kantor 6

7 Kecamatan 5

8 Kelurahan 51

AMOUNT 92

Source: Surakarta Local Government


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D. Variables and Operational Definition

1. Independent variables

An independent variable according to Sekaran (2003) is one of the variables

that influence the dependent variable in either a positive or negative way. In

this research the indenpendent variables are:

a. Need for achievement

Need for achievement is the personal striving and employees' desire to

perform to high standards and to excel in their job. The present study

adopted the Manifest Needs Questionnaire to confirm that the

measurement was appropriate for assessing the need for achievement. A

modified five-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).

Respondents were required to respond on a seven-point Likert-type

scale.

b. Work attitude

Work attitude is refers to the manager’s attitudes toward job and toward

their organization. In this study the work attitude measured by job

satisfaction and affective commitment. Job satisfaction was measured

by eight-item instrument developed by Nicole Renee Baptiste (2008).

The job satisfaction measurement has been used for public sector

organization that focuses on employees being satisfied with eight

categories of their job: (1) sense of achievement, (2) scope of using


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initiative, (3) influence over job, (4) pay, (5) job security, (6) training

received, (7) the work they do, (8) involvement in decision making.

Affective commitment was measured by eight-item instrument,

developed by Meyer and Allen (1991). This instrument has previously

been used by many studies (Ketchand and Strawser 1998; Muse and

Stamper 2007). Respondents were required to respond on a seven-point

Likert-type scale. The overall attitude (towards the job and towards the

organization) was assessed by the sum of the scores.

2. Intervening variable

The intervening variable surfaces as a function of the independent

variable operating in any situation, and helps to conceptualize and explain the

influence of the independent variable on the dependent variable (Sekaran

2003). The intervening variable in this research is budgetary participation.

Budgetary participation is the extent to which the employees or managers in

an organization have the opportunity to get involved in formulation of

budgets for which the employees are responsible to implement.

The Milani (1975) six-item, seven-point Likert-type scale instrument

was used to assess participation in budgeting. The instrument has been

extensively used in earlier studies and has provided high internal reliability

(Brownell, 1986; Frucot and White, 2006; Subramaniam et al 2002;Yuen

2007). Participants were asked to respond to each item on a seven-point scale

ranging from 1 (representing low participation) to 7 (representing high

participation).


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3. Dependent variable

The dependent variable in this research is job performance. Job

Performance is the competence of employees in conducting the managerial

activity includes planning, investigating, coordinating, evaluating,

supervising, staffing, negotiating and representing.

Job performance was measured with a self-evaluation questionnaire

developed by Mahoney et al. (1963). Respondents were asked to respond on a

nine-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 (Brownell and Hirst 1986; Frucot at all 2006;Yuen

2007; Sardjito and Muthaher 2007).

E. Analysis Technique

The data analysis in this research conducted: descriptive statistic, validity and

reliability test and hypothesis testing. The computation of analysis technique is

done with SPSS version 16.0.


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1. Descriptive statistic

Descriptive statistic consists of the measurement of mean, median,

standard deviation, maximum, and minimum value from each data sample. This

analysis means to give the picture of concerning distribution and the data sample

behavior.

2. Validity and reliability test

Research variable measurement using questionnaire instrument must

use quality examination of data to obtain the test of validity and reliability. This

examination aims to know whether the instrument used is valid and reliable or

not. This is done since the truth of data analysis assesses the quality of research

result.

The aim of validity test is to measure the quality of instrument used and

to show the level of validity of the instrument, and also how well a concept can be

defined by a size of measurement (Ghozali 2006). Instrument can be categorized

as valid if instrument can measure what the researcher want and show the accurate

data. Examination conducted by using factor analysis. This research used

Confirmatory Factor Analysis (CFA) test to measure validity test. Confirmatory

Factor Analysis (CFA) test used to test whether the construct have

unidimentionality or the indicators can confirm the construct or variable. Data is

able to be conducted by factor analysis if the Kaiser’s MSA is above 0.5 (Ghozali

2006).


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Reliability test conducted by calculating Cronbach Alpha (ά) to test the

eligibility to consistency of all used scale. Instrument told reliable if owning

Cronbach Alpha (ά) more than 0.60 this is based on the Nunnally criteria (Ghozali

2006).

3. Hypotheses testing

Hypothesis will be tested by path model for the data analysis. Path

coefficients (representing the relationships between variables) were estimated by

standardizing the β regression coefficients (Yuen 2007). The relationship between

the variables in the path model can be stated as two equations, such as the follows:

BP = P31NA + P32 WA+ P3aRi................................................................ (1)

Where, BP : is the participative budgeting,

NA : the need for achievement,

WA : the work attitude,

P : the standardized partial regression coefficients (path coefficients),

Ri : the standardized residual

JP = P41NA + P42 WA+ P43 BP +P4bRi.................................................................... (2)

Where, JP : is the job performance,

NA : the need for achievement,

WA : the work attitude,

BP : the participation in budgeting.

P : the standardized partial regression coefficients (path coefficients),

Ri : the standardized residual


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Before the multiple regression test, the examination must use classical

assumption test to ensure the validity of research data, not bias, consistent, and

further it can estimate the efficient regression coefficient (Sekaran 2003).

a. Multicollinierity test

The goal of multicollinierity test is to test whether the regression

model found the correlation between the independent variables. The good

regression model must not have correlation between the independent

variables. If the independent variables have correlation, so the variables

are not orthogonal. To detect the multicollinierity, this research used the

tolerance value and the VIF (Variance Inflation Factors) value. To confirm

that multicollinierity not exist in the regression model, if the Tolerance

value is above 0.10 and the value of VIF is < 10 (Ghozali 2006).

b. Heteroskedasticity test

The goal of heteroskedasticity test is to test whether in the

regression model there is inequality variance from residual of the certain

research to another. If there is fix variance of residual of the certain

research to another, it called homoskedasticity. The good regression model

is if there is homoskedasticity. If the graph scartterplots result show that

dot disseminate at random and also spread over on above and also under

number 0 (zero) at axis of the ordinate, this matter inferential that the

heteroskedasticity is not happened at the regression model (Ghozali 2006).


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c. Normality test

The goal of Normality test is to test whether the regression model,

disturbing variable or residual normally distributed. Researcher uses the

analysis of statistic One-Sample Kolmogorov-Sminorv test with the

significant level 0.05, thus the data of residual is normally distributed. If

the Histogram and Normal P-P Plot of Regression Standardized Residual

shows that histogram graphic gives the normal pattern distribution and the

normal plot graphic shows that the dot spread around the diagonal line and

follow the diagonal line. It means that the histogram graphic show the

normal plot distribution thus the regression model is fulfill the normality

assumption (Ghozali 2006).


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CHAPTER IV

DATA ANALYSIS AND DISCUSSION

This research examines the two antecedents factors of budgetary

participation (need for achievement and a positive work attitude) and then to

assess the impact of these two variables on job performance in the context of

public-sector organizations. Seventy two (72) managers of the institution unit

(SKPD) in Local Government Surakarta are chosen as samples of this research.

This chapter provides details about data description, hypotheses testing,

analysis and discussion. The data analysis is done with path analysis by using

SPSS version 16.0.

A. Data Description

1. Sample selection

This study uses primary data from questionnaire which is collecting from

managers of unit institution (SKPD) in Local Government of Surakarta. The

population of this research is the employees of Local Government Surakarta who

participate in the budgetary process. Regarding the sampling design, this research

uses purposive sampling with judgment-sampling, meaning that the sample is

taken with criteria of certain judgment (Jogiyanto 2005). Sekaran (2003) argues

that although restricted in general ability, judgment-sampling may sometimes be

the best sampling design choice, especially when there is a limited population that

can supply the information needed. The respondent who has chosen to fill the

questionnaire are the managers of institution unit (Satuan Kerja Perangkat


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Daerah/SKPD) as decision maker (Pengguna Anggaran/Kuasa Pengguna

Anggaran) who participate in the budgeting process and responsible about the

budget of their own institution.

The researcher has delivered 92 questionnaires. The researcher has done the

survey by delivering the questionnaires. The questionnaires which were sent back

to the researcher are 72.

The detail amount of the respondent that participates in this research is as follow:

Table 2 Questionnaire Description

NO UNITS QUESTIONNAIRE SENT

QUESTIONNAIRE RECEIVED

1 Bagian 9 8

2 Sekretariat DPRD 1 1

3 Dinas 15 12

4 Inspektorat 1 1

5 Badan 4 4

6 Kantor 6 5

7 Kecamatan 5 5

8 Kelurahan 51 36

TOTAL 92 72


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2. Descriptive statistic

The table below will explain the result of descriptive statistic analysis in

the each variable from this research. Information about descriptive statistic cover

the: average value (mean), standard deviation, minimum value and maximum

value. Result from the calculation presented at the following table:

Table 3 Descriptive Statistic of the Variables

N Minimum Maximum Mean Std. Deviation

Budgetary participation (BP) 72 2 7 5.32 4.43 Need for achievement (NA) 72 2 7 6.02 3.98 Work attitude (WA) 72 2 7 5.03 10.40 Job performance (JP) 72 2 9 7.07 6.71 Valid N (listwise) 72

The table above shows that the minimum value of budgetary participation

is 2, the maximum value of budgetary participation is 7. The mean is 5.32 and the

standard deviation is 4.43. The minimum value of need for achievement is 2. The

maximum value of need for achievement is 7, the mean is 6.02 and the standard

deviation is 3.98. The minimum value of work attitude is 2, and the maximum

value is 7. The mean and the standard deviation of work attitude is 5.03 and

10.40. For job performance has the minimum value=2 and the maximum value is

9. The mean of job performance is 7.07 and its standard deviation is 6.71.

B. Reliability Test

Reliability test is the measurement to calculate the questionnaire that

representing the indicator from variable/construct. Questionnaire told reliable if

the answer of the person to the statement is consistent or stable across time. This


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research used one shot measurement of reliability. SPSS have the facility to

measure reliability by statistic test: Cronbach Alpha (ά). The construct or variable

told reliable if the Cronbach Alpha (ά) is more than 0.60, this is based on the

Nunnally criteria (Ghozali 2006). The reliability result summarized as follow:

Table 4 Reliability Result

Variables Cronbach's

Alpha Based on Standardized

Items

N of Items

Need for achievement (NA) .855 5 Work attitude (WA) .895 16 Budgetary participation (BP) .864 6 Job performance (JP) .861 9

Result cronbach alpha of each construct from reliability test is more than

0.60 which is according to Nunnally criteria, the variable can be said reliable if

the cronbach alpha is more than 0.6 (Ghozali 2006). The details as follow: the

cronbach alpha of the Need for achievement is 0.855, the cronbach alpha of the

work attitude is 0.895, the cronbach alpha of the budgetary participation is 0.864,

the cronbach alpha of the job performance is 0.861.

C. Validity Test

Validity test is use to measure the questionnaire is valid or not valid.

Questionnaire can be categorized valid if the statement in the questionnaire can

use to disclose something that measure by that questionnaire. This research used

Confirmatory Factor Analysis (CFA) test to measure validity test. Confirmatory


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Factor Analysis (CFA) test used to test whether the construct have

unidimentionality or the indicators can confirm the construct or variable.

Table 5 Validity Result

Variables Kaiser-Meyer-Olkin Measure

of Sampling Adequacy

Initial Eigen values

Cumula tive (%)

Significant Status

Need for achievement (NA) .723 63.701 .000 valid

Work attitude (WA) .772 39.174 .000 valid Budgetary participation (BP) .757 59.526 .000 valid

Job performance (JP) .821 47.638 .000 valid

The result of CFA test, Kaiser-Meyer-Oklin Measure of Sampling

Adequacy (KMO MSA) to each variable is more than 0.50 this is fulfilling

assumption of factor analysis and reliable and also assess the Bartlett's Test of

Sphericity (BTS) by chi-square is significant of hence inferential that factor

analysis can be continued.

In conclusion the data of these research questionnaires were reliable and

valid to be measured. If we have met the valid and reliable data, so we can

continue the next step of this research which is measuring the hypotheses of this

research.

D. Classic Assumption Analysis

1. Result of multicolinearity test

The goal of multicollinierity test is to test whether the regression model

found the correlation between the independent variables. The good regression

model must not have correlation between the independent variables. If the


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independent variables have correlation, so the variables are not orthogonal. The

result of multicolinearity test is summarized as follow:

1) The first regression model (the dependent variable: budgetary participation)

Table 6 Multicollinearity test result

Model Unstandardized

Coefficients Standar

dized Coeffici

ents

t Sig. Collinearity

Statistics

B Std. Error

Beta Tolerance

VIF

(Constant) 13.627 4.948 2.754 .008

Need for achievement .378 .123 .340 3.078 .003 .982 1.018

Work attitude .086 .047 .201 1.823 .073 .982 1.018

Dependent variable: Budgetary Participation

2) The second regression model (the dependent variable: job performance)

Table 7 Multicollinearity test result

Model Unstandardized

Coefficients Standardized

Coefficients

t Sig.

Collinearity Statistics

B Std. Error

Beta Tolerance

VIF

(Constant) 27.825 7.105 3.916 .000

Need for achievement .577 .179 .342 3.232 .002 .864 1.158

Work attitude .014 .066 .021 .210 .835 .937 1.067

Budgetary participation .543 .164 .359 3.312 .001 .826 1.211

Dependent variable: Job Performance

The result multicollinearity test from the independent variables examinee

of both regression model above, the correlation among independent variables is


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not exceed boundary 95% (Appendix III). Hence it can be told there is no

multicolinearity. Result of calculation assess the tolerance seen that there is no

independent variable owning value tolerance is less than 0.10 it means that there

is no correlation between variable independent which more than 95%. The

calculation result of Variation Inflation Factor (VIF) from four independent

variables of examinee, there is no VIF value which more than 10 (Appendix III),

hence it can be conclude that there are no multicollinearity between variable

independents in regression model.

2. Result of heteroskedasticity test

The goal of heteroskedasticity test is to test whether in the regression

model there is inequality variance from residual of the certain research to another,

if there is fix variance of residual of the certain research to another, it called

homoskedasticity. If the result is different, it called heteroskedasticity. The good

regression model must eliminate the heteroskedasticity.

1) The first regression model (the dependent variable: budgetary participation)

Figure 3 Scatterplot Graphic


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2) The second regression model (the dependent variable: job performance)

Figure 4

Scatterplot Graphic

Scatterplot result shows that dot disseminate at random and spreads over

on above and under number zero at axis of the ordinate, this matter inferential that

the heteroskedasticity is not happened at both of the regression models. The

regression model is competent to predict the dependent variable based on the

input from independent variables.

3. Result of normality test

The goal of normality test is to test whether the regression model

disturbing variable value or residual value normally distributed. The researcher

uses the analysis of statistic One-Sample Kolmogorov-Smirnov (K-S) test with

the significant level 0.05. Table 8 and Table 9 present results of One-Sample

Kolmogorov-Smirnov (K-S) test.


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Table 8 Result of One-Sample Kolmogorov-Smirnov test

(the first regression which budgetary participation as dependent variable)

One-Sample Kolmogorov-Smirnov Test

Unstandardized

Residual

N 72

Mean .0000000 Normal Parametersa

Std. Deviation 4.02424836

Absolute .101

Positive .101

Most Extreme Differences

Negative -.085

Kolmogorov-Smirnov Z .857

Asymp. Sig. (2-tailed) .455

a. Test distribution is Normal.

Table 9 Result of One-Sample Kolmogorov-Smirnov test

(the second regression which job performance as dependent variable)

One-Sample Kolmogorov-Smirnov Test

Unstandardized

Residual

N 72

Mean .0000000 Normal Parametersa

Std. Deviation 5.44560142

Absolute .112

Positive .065

Most Extreme Differences

Negative -.112

Kolmogorov-Smirnov Z .948

Asymp. Sig. (2-tailed) .330

a. Test distribution is Normal.


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Result test K-S show that level of K-S value for the first regression which

budgetary participation as dependent variable is 0.857 and significant at 0.455,

while the level of K-S value for the second regression which job participation as

dependent variable is 0.948 and significant at 0.330. Hence, this matter show that

data of residual normally distributed. The Histogram and Normal P-P Plot of

Regression Standardized Residual for both models (appendix V) show that

histogram graphic give the normal pattern distribution, while the normal plot

graphic show that the dot spread around the diagonal line and follow the diagonal

line, it means that the histogram graphic show the normal plot distribution, thus

both of the regression model are fulfill the normality assumption.

From the result of classical assumption test above showed that the data are

normal. It also shows that multicolinearity and heteroskedasticity do not exist in

the regression’s model. It means this research fulfill the classical assumption. The

detail of classical assumption test can be seen in Appendix III, IV, and V.

E. Hypothesis Testing

Table 10 presents the correlation matrix for the three variables in this

study. The table shows a significant positive association between need for

achievement and job performance at the significant level p value < 0.01, but not

significant for work attitude and job performance. The regression results also

found a positive significant for the relationship between job performance with

need achievement and budgetary participation, while there is no significant direct

relationship between work attitude and job performance.


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Table 10 Pearson correlation matrix

Variables JP NA WA BP

Job Performance (JP) 1.000 Need for achievement (NA) 0.476** 1.000 Work Attitude (WA) 0.155 0.133 1.000 Budgetary Participation (BP) 0.489** 0.367** 0.247* 1.000 Notes: **significant at the 0,01 level; *significant at the 0,05 level.

Hypothesis testing in this research is done by using path analysis. The path

model in Figure 2 (page 29) is employed for the data analysis. The finding relating

to the two antecedents variable and job performance were decomposed and

assessed in term of the total relationships. 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:

BP = P31NA + P32WA+ P3aRi........................................................... ..(1)

JP = P41NA + P42WA+ P43 BP +P4bRi.................................................(2)

Where JP: is the managerial performance, BP: is the budgetary participation, NA:

the need for achievement, WA: the work attitude, P: the standardized partial

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

The first Hypothesis (H1) and the second hypothesis (H2) were tested by

regressing budgetary participation against need for achievement and work attitude

using equation (1). The results are shown in the following Table 11:


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Table 11 Results of regression analysis using equation (1) (Dependent variable: Budgetary Participation)

Dependent variable

Independent variables Hypothesis

Standardized coefficient

(Path coefficient

t-value p-value R2

BP NA H1 .340 3.078 .003 0.174 WA H2 .201 1.823 .073 Notes: BP: Budgetary Participation; NA: Need for Achievement; WA: Work Attitude

The first hypothesis (H1) in this research states that there is a direct and

positive association between an employee’s need for achievement and that

employee’s budgetary participation. Based on the regression results in Table 11

showed there is a significant positive association between need for achievement

and budgetary participation at significant level p = 0.003. If we use significance

rate 5 % or 0.05 thus p=0.003 is less than 0.05. H1 is therefore verified. It means

that a need for achievement has a direct positive association with budgetary

participation.

The second hypothesis (H2) states that there is a direct and positive

association between an employee’s work attitude and employee’s budgetary

participation. The result of regression in Table 11 showed that work attitude has

no direct significant relationship with budgetary participation which p value is

0.073. It more than the level significance rate 5 % or 0.05. So, H2 is rejected, it

means that there is no direct positive association between employee’s work

attitude and budgetary participation.


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Based on those result, only need for achievement variable that significant

in explaining budgetary participation. But, work attitude is not significant. The

path of need for achievement – budgetary participation showed a significant

relationship supported with standardized coefficient (path coefficient) 0.340 at

probability value /p value = 0.03 < 0.05.

Table 12 presents the results of regression analysis using equation (2).

Here, the third hypothesis (H3) was tested by regressing job performance against

budgetary participation, work attitude and need for achievement.

Table 12 Results of regression analysis using equation (2)

(Dependent variable: Job Performance)

Dependent variables

Independent variables Hypothesis

Standardized coefficient

(Path coefficient

t-value p-value R2

JP NA Non hypothesis .342 3.232 .002 0.342

WA Non hypothesis .021 .210 .835

BP H3 .359 3.312 .001

Notes: JP: Job Performance; BP: Budgetary Participation; NA: Need for Achievement; WA: Work Attitude

The results in the table above shows that the path of budgetary

participation – job performance supported with standardized coefficient (path

coefficient) 0.359 at probability value /p value = 0.01 (less than 0.05). So, this

result verify the third hypothesis (H3) stated before that there is a direct and

positive association between an employee’s budgetary participation and that

employee’s job performance.


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The following path model (Figure 5) shows the standardized path

coefficients and the relationship between variables:

0.021 (p= 0.835)

0.201 (p=0.073)

0.359 (p=0.01)

0.340 (p=0.03)

0.342 (p=0.02)

Figure 5 Path Model

The results in Figure 5 suggest that a need for achievement affect job

performance indirectly via budgetary participation, but there was no direct

significant relationship found between work attitude with both of budgetary

participation and job performance.

Researcher also examines the indirect effect between the constructs. The

indirect effects consisted of the following paths:

Path (1) need for achievement – budgetary participation – job performance:

X1 Y1 Y2 = 0.340 x 0.359 = 0.122.

Path (2) work attitude – budgetary participation – job performance:

X2 Y1 Y2 = 0.201 x 0.359 = 0.072.

Budgetary Participation

Job Performance

Need for the value of

achievement

Work attitude


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Table 13 Decomposition of observed correlations on job performance

Observed

correlation Direct effect Indirect effect Spurious

NA – JP 0.476 = 0.342 + 0.122 + 0,012 WA – JP 0.155 = 0.021 + 0.072 + 0,062

Table 13 indicates the breakdown components of the direct and indirect

effects of the two paths. The results suggest that budgetary participation mediates

the relationship between need for achievement and job performance. According to

Baron and Kenny (1986), a variable functions as a mediator (in this case,

budgetary participation) when it meets the following three conditions:

(1) If the independent variables (in this case, need for achievement and work

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

budgetary participation).

(2) If the mediating variable (in this case, budgetary participation) is

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

(3) If the relationship between the independent variables (in this case, work

attitude and need for achievement) and the dependent variables, the path

coefficient decreases after controlled by the mediating variables (in this

case, the relationship between: need for achievement and work attitude and

job performance directly).

This research found that regarding the three conditions above, only in the

path need for achievement – budgetary participation – job performance, where

budgetary participation acted as partially mediation variable. The magnitude of

the association between need for achievement and job performance decreased but


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still significant after controlling for the intervening variable (budgetary

participation). It showed by the decreased of its path coefficients (Table 13). It

indicates that with regard to the total (direct) relationship between need for

achievement and job performance, the zero order correlation is 0.476 ( p < 0.01).

The correlation of 0.476 consists of a direct effect of 0.342 and an indirect effect

of 0.122. With regard to the direct effect, the link between need for achievement

and job performance, the 0.342 path coefficient is still significant (p < 0.05).

While, in the path of work attitude – budgetary participation – job performance,

cannot fulfill those three conditions above. There were no significant relationships

between work attitude with both budgetary participation and job performance.

The finding suggests that a need for achievement have a positive

association with budgetary participation, then that budgetary participation also has

a positive association with job performance. It means that a higher need for

achievement can influence for higher budgetary participation, then through in

participation in budgetary process effect on improving employee’s job

performance (e.i managerial performance).

This result support Yuen (2007) who find that high budgetary participation

should improve job performance only when participants have a significant need

for achievement, on the other hand, the relationship between budgetary

participation and job performance is negative when participants have less need for

achievement. Subramaniam (2002) stated that individuals with a high need for

achievement will seek organizational processes such as participative budgeting for

two reasons. First, individuals with high need for achievement are likely to desire


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participation in budget-setting because they are motivated to create their own

destiny. Kukla (1972), for example, found that individuals with high need for

achievement take personal responsibility for success and generally perceive

themselves as high in ability. This attribution for success increases their feeling of

self-worth. Second, by participating in budget-setting, individuals can gain job-

relevant information that may help them to set appropriate goals.

The finding also implies that budgetary participation in local government

can improve employees’ job performance when the participants have high need

for achievement. It also aligned with Mia (1988) who revealed that budget

participation by managers who had a more favorable (high) motivation was

associated with improved performance, while that by managers who had a less

favorable (low) motivation was associated with hampered performance.

The adversely expected result evidenced in relationship between work

attitude with job performance and also budgetary participation, which there is no

significant association between those variables (p > 0.05 see in Table 11 and

Table 12). Although, the work attitude has no direct significant association with

the job performance, budgetary participation cannot acted as

mediating/intervening variable because the result shows that work attitude also

has no direct significant association with budgetary participation.

The insignificant of the relationship between work attitude and budgetary

participation is contrary with the previous research result conducted by Yuen

(2007) which found that there is a significant direct positive association among

the two variables. Thus, budgetary participation acted as a full mediator between


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work attitude and job performance. In other words, the relationship between work

attitude and job performance cannot exist without the employee’s participation.

The result also not supported by Mia (1988) whose research revealed that

budget participation by managers who had a more favorable (high) attitude was

associated with improved performance while that by managers who had a less

favorable (low) attitude was associated with hampered performance. Thus,

managers' attitudes toward their jobs and employer appear to be a contingent

variable moderating the relationship between their budget participation and

performance.

The insignificant of direct association between work attitude with

budgetary participation and job performance, might be caused by budgetary

participation is relatively recent in public sector such as local government

institutions, since the emergence of decentralization or local government

autonomy in Indonesia also is not in long standing yet. Dahkli (2009) stated when

the participative management is, relatively recent, the managers did not already

familiarize themselves with this new managerial practice and, so, they do not

value the benefits brought by this opportunity.

In addition, most of the respondent of this research are the managers of

kelurahan, which the institution still new in budgetary process since the declared

of Minister of Domestic Affair’s Regulation No.13/2006. Regarding this

presumption, to make sure that Kelurahan was a suitable sample in this research,

the T-test between two samples (Kelurahan and Non Kelurahan SKPD) and


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analyzed both of samples separately were conducted by researcher as the

additional analysis that was excluded from hypothesis.

Inferring from the result of T-test analysis between two group samples

based on the institution unit (Kelurahan and Non Kelurahan) revealed that there is

no significant different means of need for achievement value and work attitude

value between Kelurahan institution unit and Non Kelurahan institution unit.

Meanwhile, it found that there is a different means of budgetary participation and

job performance between respondents who came from Kelurahan institution units

(SKPD Kelurahan) and respondent who came from Non Kelurahan. The group

statistics output showed that the mean of the budgetary participation value for the

respondent that came from Kelurahan is 30.03 while for the respondent that came

from Non Kelurahan is 33.78, the t value is 3,944 with probability 0.00 less than

0.05 (Appendix VII). It implied that the budgetary participation value for

respondent that came from Kelurahan and the respondent that came from Non

Kelurahan is significant different.

However, the regression analysis for two sub samples (Kelurahan and Non

Kelurahan SKPD) showed both of samples result presented that budgetary

participation cannot acted as mediating variable. For the regression result of

Kelurahan sample group showed the work attitude has significant association

with budgetary participation, but budgetary participation has no significant

association with job performance. Meanwhile, for the regression result of Non

Kelurahan sample group showed the work attitude has no significant association

with budgetary participation, but budgetary participation has significant


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association with job performance (Appendix VIII). Thus, the result is consistent

with the previous regression result in this research when the two sub samples

(Kelurahan and Non Kelurahan SKPD) were not separated, budgetary

participation cannot acted as mediating/intervening variable in the relationship

between work attitude and job performance.

Regarding this finding, the researcher pressumed that there is another

factor or variable beyond need for achievement and work attitude that could

influenced the level of budgetary participation and job performance. Jermias and

Setiawan (2007) stated that the impact of budgetary participation on performance

might be different in this setting (government units) might be caused by most

budgets in public sectors and/or developing countries are prepared in response to

political pressure rather than careful analyses. Political interventions in staff

recruitments, budget preparations and budget executions are very common in this

environment. As such, the benefits of participation might not be fully realized.


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CHAPTER V

CONCLUSION AND RECOMMENDATION

A. Conclusion

This research examines the two antecedents factors of budgetary

participation (need for achievement and work attitude) and then to assess the

impact of these two variables on job performance in Local Government of

Surakarta.

The empirical results showed that need for achievement had a significantly

positive association with budgetary participation, but, work attitude had no

significant association with budgetary participation. While, budgetary

participation had a positive influence on job performance. Regarding the finding,

budgetary participation can be acted as mediating/intervening variables in the

relationship between need for achievement and job performance. However,

budgetary participation cannot be facilitated as mediating in the relationship

between work attitude and job performance because work attitude did not have

significantly positive association with budgetary participation.

It means that only need for achievement is confirmed as significant

influencing factor to job performance during participation in the budgetary

process. A higher need for achievement can influence for higher budgetary

participation, then through in participation in budgetary process effect on

improving employees’ job performance.


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B. Implications

Regarding to the results of this research indicated that job performance can

be fostered among managers with high need for achievement and through

participative budgeting. These findings have implications for human resource

management for better understanding of individual-level behavior, senior

management can effectively foster better job performance through the

encouragement of budgetary participation, particularly among those who have a

significant need for achievement. In order to motivate the employee for having

higher need for achivement, Local Government need to clearly implement reward

and punishment for all the employees regarding their job performance. So, they

have higher motivation when they involve or participate in budgetary process, not

merely caused by obeying the mandatory regulation.

C. Research Limitations

This research has several limitations:

1. The use of a self-rating scale for performance may result in a higher

leniency error or personal bias. This will reduce the objectivity of the data.

2. This research did not consider another variables that might be have

association with budgetary participation, it only assume a need for

achievement and work attitude as the antecedent of budgetary participation

related to enhance job performance.


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D. Suggestions

There are some suggestions that the researcher can give regarding this

research, such as:

1. Regarding the research result, researcher suggests local governments need

to improve the motivation for the employees to have higher need for

achievement in order to higher participation in budgetary process and

enhancing employees’ job performance.

2. The quantitative data used in this research. The quantitative nature of the

data used in the study means that the study can answer only certain limited

questions about what seems to have happened. Therefore, it is

recommended that the future study can investigate further by combining

the quantitative and qualitative method to get more information from

respondents in order to deeper analysis.

3. This research uses two independent variables as antecedent of budgetary

participation (need for achievement and work attitude). It is possible that

other variables, which are not included in the model, can produce strong

statistical associations with performance. Therefore, researcher suggests

that future research can be done with additional independent variables that

conveniently fit into the model of relationship between budgetary

participation and performance. A budgetary participation and employee's

performance may be influenced by other variables such as group behavior,


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decentralized structure, reward systems and top managements' policies not

investigated in this study.

antecedents of budgetary participation: … · mr. bandi, dr., m.si,ak, as the head of master of...

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