Participation in Budget Setting, Evaluation, Incentive Compensation and Employee Motivation to Perform: A Broader Perspective on Expectancy Theory

Nazila Razi, Elizabeth More

Research output: Contribution to conferenceConference paper presented at Conference (not in Proceedings)

Abstract

Previous studies on expectancy theory of motivation have ignored the importance of employees’ commitment to the goals established at the target setting stage. This study addresses limitations to previous research by integrating expectancy and goal setting theories. It extends expectancy theory by incorporating employee participation in budget setting and evaluation and then examines the relationship between employee motivation to perform and performance. The results indicate that the relationship between effort and performance (expectancy) is significantly positive under such circumstances, with, employee motivation to perform positively associated with performance. Incentive compensation could effectively motivate employees if 1) they participate in budgeting processes; 2) organizations use budgeting systems to set achievable targets; 3) workers perceive that the compensation system is a means by which their accomplishments will be linked to the rewards; and 4) and the rewards are attractive and valuable. Overall, the results of this study suggest that budgeting process, performance evaluation and incentive compensation have the potential to be used as predictors of the motivation to perform and, in turn, performance.
Original languageEnglish
Pages1-14
Number of pages14
Publication statusPublished - 2011
Externally publishedYes
EventBritish Academy of Management (BAM) Conference: BAM 2011 conference proceedings : building and sustaining high performance organisations in a challenging environment - Birmingham, Birmingham, United Kingdom
Duration: 13 Sep 201115 Sep 2011
http://www.bam.ac.uk/bam2011

Conference

ConferenceBritish Academy of Management (BAM) Conference
CountryUnited Kingdom
CityBirmingham
Period13/09/1115/09/11
Internet address

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    Razi, N., & More, E. (2011). Participation in Budget Setting, Evaluation, Incentive Compensation and Employee Motivation to Perform: A Broader Perspective on Expectancy Theory. 1-14. Paper presented at British Academy of Management (BAM) Conference, Birmingham, United Kingdom.