Based on Self-Determination Theory (SDT; Ryan and Deci 2000b; Gagne´ and Deci 2005), the present research proposes and tests a motivation-based model of participation in budgeting that distinguishes among intrinsic motivation, autonomous extrinsic motivation, and controlled extrinsic motivation for participative budgeting. The proposed model was tested using a survey conducted among managers of an international bank. The results suggest that while intrinsic motivation and autonomous extrinsic motivation for participation in budgeting are positively related to performance, controlled extrinsic motivation is negatively associated with performance. These findings highlight the importance of distinguishing among various forms of motivation in participative budgeting research and suggest that the mechanism by which the information benefits of participation in budgeting are obtained may be more complex than assumed. The results also provide evidence of the viability of using the proposed model to study commonly assumed reasons for participative budgeting within a general theoretically based framework of motivation.
Vertical pay dispersion is the difference in pay across different hierarchical levels within an organization (Milkovich and Newman 1996). While vertical pay dispersion may be useful in attracting, retaining, and motivating highly skilled employees (Lazear and Rosen 1981;Lazear 1995;Prendergast 1999), our study investigates a potential disadvantage; specifically, the negative impact of perceived unfairness of vertical pay dispersion on employees' budgeting decisions. We predict and find that high vertical pay dispersion motivates subordinates to misreport costs to a greater extent than low vertical pay dispersion. Furthermore, we predict and find that superiors, on average, exercise more lenient cost controls when vertical pay dispersion is high rather than low. Supplemental analysis indicates superiors are more lenient on average because of their aversion to inequity caused by vertical pay dispersion. Our results suggest that high vertical pay dispersion can compromise the overall corporate budgeting environment, where higher levels of misreporting by subordinates goes unchecked by superiors.Les r epercussions de la dispersion verticale des salaires :observations exp erimentales en contexte budg etaireLa dispersion verticale des salaires est l' ecart salarial entre diff erents echelons hi erarchiques au sein d'une organisation (Milkovich et Newman, 1996). Même si la dispersion verticale des salaires peutêtre utile pour attirer, fid eliser et motiver des employ es hautement comp etents (Lazear et Rosen, 1981;Lazear, 1995;Prendergast, 1999), elle risque de pr esenter un inconv enient qu' etudient les auteurs : l'incidence n egative de l'iniquit e perc ßue de la dispersion
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