The Effect of Budget Participation on Employees' Job Performance

Table of Contents

1. Introduction
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objective of the Study
1.4 Research Questions
1.5 Hypothesis
1.6 Significance of the Study
1.7 Scope of the Study
1.8 Limitation of the Study
1.9 Organization of the study

2. Review of the Literature
2.1 Definitions and Measurement of Dependent Variable - Job Performance
2.2 Definitions and Measurement of Independent and Mediating Variables
2.3 Theoretical Literature on the Relationship Between Independent Variables, Mediating Variables and Dependent Variables
2.4 Empirical Literature on the Relationship Between Independent Variable, Mediating Variables and Dependent Variables
2.5 Historical Review of ANRS HAPCCO
2.6 Summary of Literature

3. Research METHODOLOGY
3.1 Research Design
3.2 Type of Data and Source
3.3 Operational Definitions
3.4 Measurement of Variables
3.5 Data Collection Methods
3.6 Data Analysis Methods

4. Results and Discussion
4.1 Response Rate
4.2 Reliability Test
4.3 Factor analysis
4.4 Descriptive Statistics of the Variables
4.5 Correlations Between Predictors and Dependent Variables
4.6 Regression Assumption Checks
4.7 Regression and Path Analysis Result
4.8 Discussion

5. Conclusions, Recommendations and Suggestions for Future Research
5.1 Conclusions
5.2 Recommendations
5.3 Suggestions for Future Research

Reference

Appendix

List of Tables

Table 1: Awareness of HIV/AIDS

Table 2: Knowledge of Transmittion Methods

Table 3: Population

Table 4: Profile of the Respondents

Table 5: Item Reliability Statistics (Cronbach's Alpha)

Table 6: Factor Analysis Test

Table 7: Descriptive Statistics of the Variables

Table 8: Correlation Matrixes

Table 9: Path Analysis Result

Table 10: Decomposition of Observed Correlations

List of Figures

Figure 1: Model for Mediating Factors for Job Performance

Figure 2: Theoretical Model for Mediating Factors for Job Performance

Figure 3: Path Coefficients. Values are taken from Table 4-6

Acknowledgements

Above all, my heartfelt thank goes to the source of everything and the compassionate God, without Him I wouldn’t have come up such a result. Besides, I want to address my deepest gratitude for the respected principal advisor Letenah Ejigu (PhD Fellow) and co-advisor Ato Aderaw Gashaye for their kind, unreserved advice and assistance throughout this time.

I am also grateful to Amhara National Regional State HAPCCO staff for their significant collaborations and assistance in supplying necessary information to prepare this paper.

Last but not least I also heartily thank my beloved wife W/ro Wessen Mekonnen who helped me in caring the kids specially the disturbing lion, Barnabas, besides alerting me to be on my study room.

October 2012

Animaw Yayeh

Department of Management

Faculty of Business & Economics

University of Gondar

Acronym

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ABSTRACT

So far a lot has been done in minimizing the spread of the HIV/AIDS epidemic in HAPCCO yet; still a lot remains to be done by employees of the office. The region is still far behind from other regions in the knowledge of HIV/AIDS transmission, and prevalence rate. This paper investigated the effect of budget participation on job performance in one of the public sectors the Amhara National Regional State (ANRS) HIV/AIDS Prevention Control and Co-ordinations Office (HAPCCO). While studying the relationship between budget participation and job performance the following variables are used as mediating variables: role ambiguity, organizational trust, organizational commitment and budget adequacy. The study is significant for HAPCCO management and regional policy makers on how to improve the office’s performance by considering different variables and other researchers who wish to use the same method and sector/s.

Quantitative research design is used. Primary data are collected using structured questionnaire from a sample of 54 employees of HAPCCO selected using stratified random sampling. For data analysis descriptive statistics, correlation, regression and path analysis techniques are employed.

The result of the study indicated that budget participation has a direct but insignificant effect on job performance. Besides budget participation has an indirect positive and significant effect on job performance through mediating variable. Mediating variables have a positive and significant relationship with budget participation with the exception of organizational commitment.

1. Introduction

The performance of today’s employees is affected by variant factors in organizations. The mostly unspoken high productivity, profit and performance than other competitors of most organizations could not be realized without employee’s support and contribution (Sarminah, 2006). Understanding the basic factors that hinder employees’ performance is vital for an organization to assume the going concern.

For the public sectors that are responsible to the society as a whole, identifying the key performance factors is an issue of good governance and raise political insecurity. Most researchers in the business world have done a lot in such arena.

1.1 Background of the Study

Nowadays, in their pursuit of goals human beings are increasingly faced with greater competition and uncertainty due to critical problems. One of the critical problems is HIV/AIDS. Recognizing that HIV poses one of the most formidable challenges to the development, progress and stability of societies nations, round the world are on round table. The understanding of the epidemic in its requirement of an exceptional and comprehensive global response, States, public and private partnerships, non-governmental organizations and the important roles of civil society, communities, and persons living with and affected by HIV are vowing in designing solutions on how to minimize the epidemic (UN resolution, 2011).

According to Centers for Disease Control and Prevention (CDC) official website more than two-thirds of the estimated 34 million people living with HIV/AIDS worldwide are in developing countries and nearly three-fourths of the 2.7 million new HIV infections in 2010 occurred in these countries. As a result, HIV/AIDS is not a problem of the developing countries where many resources are there but the whole world.

No matter how Presidents of the developed like President's Emergency Plan for AIDS Relief (PEPFAR) as well as the rich men like Bill Gates in his “The Bill & Melinda Gates Foundation” deploy hug sum in the fight against HIV/AIDS the problem in minimizing the new infection is still high (from 2 million to 2.4 million) according to the epidemiology summary of 2011 (National ARC website). Besides religious and community leaders are there in fight against the disease. However, the problem is continuing being a social, economic and political problem.

In the fight against HIV/AIDS, strategies were designed all over the country. Structural as well as programmatic arrangements were launched based on different interventions in government as well as NGOs. However, a coordinating organ was vital for equity balancing in regions as well as Weredas. As a result, HAPCCO is established so as to alleviate this problem.

The establishment of ANRS HAPCCO has contributed a lot in the fight against HIV/AIDS. Since its establishment, according to Ethiopian Health and Nutrition Research Institute (2011) report on the 2009 round Antenatal Care Sentinel HIV Surveillance lowest adjusted HIV prevalence, the regional prevalence has decreased from 3.0% (higher than Oromia 1.7% and SNNP 1.44%) to 1.6 according to HIV/AIDS Behavioral Surveillance Survey (BSS) Ethiopia 2006 (Genet et al, 2006). The coordination and control of the disease by the office needs the responsiveness of other stakeholders’ _government as well as nongovernmental organizations. The responsibility aims at being proactive and involves multisectoral response that decreases the spread of the disease and gives care and support for the affected. The most affected are children and women (Genet et al, 2006). The responses are combination of information from various sources, bringing together different perceptions and dealing with diverse interest groups. As a result, managing the resources that require such responses is a though and challenging duty given to the office’s employees at different level of its organizational hierarchy.

Individual difference in skill, efforts exerted, personal motivations, equity and expectations, role and perception are the challenges to be considered while thinking employees’ performance (Leslie, 1992). Obviously, the complex nature of the employees (human being in general) oscillates the performance of the organizations as per the wind blowing in that compound.

1.2 Statement of the Problem

A lot has been done in mobilizing the regional government, stakeholders and the community in the fight against HIV/AIDS in the region. According to the EDHS 2011 (2012) studies the percentage of women and men aged 15-49 that are aware of HIV/AIDS, its transmission, and prevention methods in Amhara region is low as compared to the three big regions of the country (Tigray, Oromiya and SNNP). Let alone the three regions, it is actually lower than Afar and Gambella regions (less developing regions).

Table 1: Awareness of HIV/AIDS

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Source: Ethiopia Demographic and Health Survey 2011, p: 190

In this study, the knowledge of the transmission methods such as condom, limiting sexual intercourse to one uninfected partner, condoms and limiting sexual intercourse to one uninfected partner is low as compared to the three developed regions as shown in table 2 bellow. These all assure that, there is even a significant difference among the public sector.

Table 2: Knowledge of Transmittion Methods

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Source: Ethiopia Demographic and Health Survey 2011, p: 191

In the same study, the number of women who have multiple sexual partners (in the last 12 months - 2011) in the region is still higher (EDHS, 2012) and need high commitment and devotion in changing the attitude and behavior of the residents.

From time to time, though a decrease in the prevalence rate is recorded (EDHS 2011, (2012) still a lot is remaining and a lot is required in upgrading the performance of HAPCCO as per the requirement of the region to be the leader in the fight against the epidemic and the vision of HAPCCO - a free HIV/AIDS citizen.

Obviously quality and good performance is not attained through night and needs a role clarity in the part of different stakeholders (Eker, 2008), needs utmost organizational trust (Sugioko, 2010), requires high organizational commitment (Nouri & Parker, 1998), demands adequate budget (Ni et al, 2009) and aspire maximum employees satisfaction (Ying-Chang, 2010). The curiosity of the researcher is to investigate to what extent the job performance of HAPCCO employees is affected by budget participation. While participating with stakes in the budget process, to what extent the roles are clarified, how the stakes’ commitment and trust is developed is a tough question to be raised.

Previous empirical studies indicate the relationship between budgetary participation and job performance to be complex and inconsistent, some suggest a significant positive association while some indicates insignificant positive and even others negative (Nouri & Parker, 1998; Heath & Brown, 2007; Ni et al, 2009; Sugioko, 2010). Though there is large number of prior research on the relationship between budget participation and job performance, none of them has specifically focused attention on Ethiopia particularly Amhara Region. The conflicting results of prior studies and the existence of no research on this regard in the Ethiopian context have prompted the researcher to investigate the relationship between budgetary participation and job performance and the potential intervening variables in the relationship between budget participation and job performance.

1.3 Objective of the Study

The general objective of this study is to assess the effect of budgetary participation on employee job performance in one of the public sector organizations ANRS HAPCCO.

The specific objectives of the study are:

to know the job performance level of sample employees of ANRS HAPCCO

to examine the direct effect of budget participation on employee job performance.

to examine the indirect effect of budget participation on employee job performance through mediating variables such as role ambiguity, organizational trust, organizational commitment, budget adequacy and job satisfaction in ANRS HAPCCO.

1.4 Research Questions

The current study tries to answer for the following research questions:

how does the job performance level of ANRS HAPCCO employee look like?

does budget participation have a direct and indirect effect (through mediating variables) on employees’ job performance in ANRS HAPCCO?

what are the basic mediating factors that affect the relationship between budget participation and job performance of HAPCCO?

1.5 Hypothesis

In line with the objectives of the study and research questions, the following hypotheses are proposed:

There is a direct insignificant and positive relationship between budget participation and job performance (H6).

There is a direct significant and positive relationship between budget participation and mediating variables such as role ambiguity, organizational trust, organizational commitment, budget adequacy and job satisfaction (H1-H5).

There is a direct significant and positive relationship between mediating variable (role ambiguity, organizational trust, organizational commitment, budget adequacy and job satisfaction) and job performance (H8, H10, H12, H14 and H15).

There is a direct significant and positive relationship between role ambiguity and organizational trust (H7), organizational trust and organizational commitment (H9), organizational commitment and budget adequacy (H11), and budget adequacy and job satisfaction and job performance (H13).

There is an indirect significant and positive relationship between budget participation and job performance through the effect of mediating variable (role ambiguity, organizational trust, organizational commitment, budget adequacy and job satisfaction) and job performance (H1-H15 in combinations of hypothesis).

Figure 1: Model for Mediating Factors for Job Performance

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Source: Adopted from Sugioko and Nouri & Parker

1.6 Significance of the Study

The study is imperative for:

Policy makers - Policy issues in the country are downward flowing and mostly complained by professionals and even fail in implementations. The budgetary participation of middle and lower level managers is not practical in country. This research elaborates how failure in budget participation increases role ambiguity in the organizations duties and responsibilities, develops organizational mistrust and lowers organizations employees’ commitment affecting partners to become cooperative in funding the tasks which lastly develops in employees’ dissatisfaction hampering performance of the organization. The research helps the government of Ethiopia as well as Amhara Region for its full discharge of reforms.

HAPCCO Management - Assessing the effect which hinders employees’ job performance help HAPCCO management to undertake corrective measures in all its hierarchy especially in the budget participation and the mediating variables (role ambiguity, organizational trust, organizational commitment, budget adequacy and job satisfaction).

For Research – this research show how to analyze the direct and indirect effect of mediating variables using the technique of path analysis and help other researcher who wish to study other issues using similar techniques-path analysis.

1.7 Scope of the Study

The study assesses the direct and indirect effect of budget participation in employees’ job performance through mediating variables (role ambiguity, organizational trust, organizational commitment, budget adequacy and job satisfaction) in case of ANRS HAPCCO.

The study includes middle and lower level managers of HAPCCO both regional and zonal level and government sectors (Bureaus) which are not under the structure of the office but work in prevention and control of HIV/AIDS. The three Metro Politian towns (Gondar, Dessie and Bahir Dar) were part of the study for the reason that they are considered as highly risk areas in epidemic and are key role players for the success as well as the failure of HAPCCO.

1.8 Limitation of the Study

The study may have limitations due to the following factors:

Since the study is conducted on one of the public sectors it may not be applicable for private sectors where high flexibility is being practiced.

The study is a onetime survey; it may lack to capture the dynamics of employees’ job performance overtime.

Even if there are time and cost constraints in collecting data, the researcher tried his best not to compromise quality

In testing the hypothesis stated, Structural Equations Model (SEM) was the preferable method for the reason that it provides the significance of complex relationships among variables at the same time. Besides it has better ability to model multiple relationships than path analysis and multiple regressions (Ni et al, 2009). However, the researcher can’t get the software that does the SEM analysis.

1.9 Organization of the study

The thesis is discussed in five chapters. The first chapter dealt with introduction of the study which covers background of the study, problem statement, objective, research question, hypothesis, significance, scope, and limitation of the study. Chapter two dealt with the review of the literature and covers the definition and measurement of the dependent, independent and mediating variables, discussion of the theoretical literature on the relationship between the dependent, independent and the mediating variables, empirical literature on the relationship between the dependent, independent and mediating variables, and finally historical review of the ANRS HAPCCO. Chapter three, dealt with the research methodology which covers the research design, type and source of data, population, sample size, operational definition and measurement of variables, instruments of data collection and method of data analysis. Chapter four discussed the results of the study followed by a discussion of the results. The results of the study cover descriptions response rate, reliability analysis, descriptive statistics results, correlation results, regression assumption checks and finally the regression results. Lastly, chapter five dealt with the conclusion, recommendations to policy making and practices and suggestion for future research.

2. Review of the Literature

The literature review is organized in to six sections. The first section deals with definitions and measurement of the dependent variable. The second section deals with the definitions and measurement of the independent variable and mediating variables. The third section deals with the theoretical literature on the relationship between independent variables and the dependent variable. The fourth section deals with empirical literature on the relationship between the independent variable, mediating variables and the dependent variable. Finally, historical review of ANRS HAPCCO and summary of the literature is presented.

2.1 Definitions and Measurement of Dependent Variable - Job Performance

Christen et al (2006), defined job performance as an aggregate construct of effort, skill, and outcomes that are important to the employee and the firm. From this definition obviously effort is distinct from job performance and from an employee perspective job performance and effort are still different. Effort is an input to work, and job performance is an output from the effort utilized in the specified time.

From a firm’s perspective, effort and job performance may be difficult to distinguish, because the firm is the result of aggregate employees’ effort and effort is often inferred from the output produced. Obviously, an employee is anyone who performs services/discharge responsibilities that are under the control of an organization. In this research employees refer to both middle and lower level employees.

In strengthening the Christen et al (2006) definition of job performance, Mwita (2002) explained the determinants of job performance as knowledge, skill and motivation factors. We can understand from this definition that the efforts of individual employees/managers contribute to organizational performance in complex and uncertain ways.

Slukhai, (2011) defined job performance as a measure of how successful jobs are being implemented so as to perform the plans that allow attaining the mission and creates a sense of ownership and accountability.

Abdul Razak et al (2008) explain job performance as it is related to the willingness and openness to try and achieve new aspects of the job so as to increase in the individual’s productivity for the importance of social standing.

Onukwube et al (2010) defines job performance as only the behavior relevant to an organization’s goals that can be evaluated in terms of the extent to which it contributes to organizational effectiveness. Performance comprises both a behavioral and an outcome aspect employee engage in or bring that are associated with and contribute to organizational goals and as a result it is often called a multi-dimensional and dynamic concept (Onukwube et al 2010).

From the above different definitions, we can summarize job performance as the will and wish of employees to aspire the goal of the organization attained based on social responsibility and accountability. Attaining the highest job performance is sometimes difficult as a result of the complexities in the behavior of the employees and the dynamic nature of change in the whole environment and fast information sharing.

Qi (2010) stated as that managerial performance can be measured in terms what we known the functions of management. However, he has added other dimensions such as investigating, evaluating, supervising, negotiation and reporting as shown below:

Planning - Determining goals, policies and courses of action; work scheduling, budgeting, setting up procedures, programming.

Investigating - Collecting and preparing information for records, reports and accounts, measuring output; inventorying, job analysis.

Coordinating - Exchanging information with people in your organization in order to relate and adjust program; advising and liaison with other personnel.

Evaluating - Assessment and appraisal of proposal for reported or observed performance; employee appraisals, judging output records, judging financial report; product inspection.

Supervising - Directing, leading and developing your personnel; counseling, training and explaining work rules to subordinates; assigning work and handling complaints.

Staffing - Maintaining the work force of your organization; recruiting, interviewing and selecting new employees; placing, promoting and transferring employees.

Negotiating - Purchasing, selling or contracting for goods or services, contacting suppliers, dealing with sales representatives.

Representing - Attending conventions, consultation with other firms, business club meeting, public speeches, and community drives; advancing the general interests of your organization.

As a result, in each dimensions the kind of job performed is reported and maintained so as to know the status of the employees’ performance.

Job performance has been a debating issue in the field of modern management, psychology and others since it has many factors affecting (Nouri & Parker, 1998; Sugioko, 2010; Adler & Reid, 2011). The factors show different relationship varying from strong to almost no relationship. In addition to the variant nature of the factors the difficulty arises in its measurement. It is measured from various aspects and at various levels of the organization. Relevant performance indicators consider differences in the purpose of, and requirements for, information at each level: a project or a team, a programme or a department, and a strategy (Cho, 2010).

Job performance in the case of the office, the study investigated, is measured based on the questionnaires adopted from (Nouri & Parker, 1998; Cho, 2010; Qi, 2010; Sugioko, 2010). Employees’ job performance is measured by a modified eight-item scale using a manager’s self-rating instrument and that consists of both performance and effectiveness aspect. Middle and lower level managers were asked to evaluate and rate their job performance directly themselves and indirectly their supervisee (employees’ effectiveness)/how managers let their employees perform their task.

2.2 Definitions and Measurement of Independent and Mediating Variables

In this part of the literature the definition and the measurement of the independent and the mediating variables such as role ambiguity, organizational trust, organizational commitment, budget adequacy and job satisfaction are discussed.

Independent Variable - Budget Participation

Participation is important and assumed to exist in order to dwindles information asymmetry between managers, subordinates and employees in an organization and create an encouraged working environment (Heath & Brown, 2007). The roles of budget participation in organizations have attracted the attention of management accounting researchers for it enables the communication and agreement of employees’ action towards organizational goals (Milani, 1975; Nouri & Parker, 1989; Nassir et al, 2011; Zainuddin & Isa, 2011). While setting a budget, higher officials of the organization are supposed to participate in defining explicit budgetary goals and at the same time to be involved in subsequent revisions to these goals with the management (Qi, 2010). This participation among different levels of the organization may allow identifying the reasons for any variance and find the corrective actions to be under taken.

Othman (2012) defined budgetary participation as a process where a manager is involved with, and influences, his or her budget. Similarly Ndiwalana (2009) defined budgeting participation as a process whereby subordinates are given opportunities to get involved in and have influence on the budget setting process. From Othman’s as well as Ndiwalana’s definition budgetary participation is related to how much extent managers/subordinates participates and influences in setting the budgets.

Parker and Kyj (2006) defined budget participation as the vertical information sharing that can play an essential role in establishing an accepted and well-organized budget in the organization. Information sharing involves both upward communication of information from subordinate to superior and downward communication from superior to subordinate. These sharing of information can lead to greater understanding of the budget settings (tasks), greater trust in budget targets, and lowering the subordinates fear, worry and mistrust of budget targets.

In addition, Sugioko (2010) defined budget participation as is a process that enables managers to participate in proposing, negotiating and discussing budget proposals so as to motivate managers, earns trust, and increases commitment to achieve the highest performance expected.

Simply, budget participation is the sharing/communication of information between superiors and subordinates which includes both the upward communication from subordinate to superior and the downward communication from superior to subordinate so as to create budgetary role that individuals can play (Nouri & Parker, 1998; Qi, 2010; Othman, 2012). Budget participation not only share information but also generates an environment that encourages the acquisition and use of that information for the social wellbeing of the organization in today’s competent world (Boujelbene & Affes, 2012).

According to Ndiwalana (2009) budget participation can be measured from:

the ability for the subordinates to influence the design of the budget, to what extent the superior manager contacts the subordinates, how easy it is for the subordinates to propose alterations in the budget process and to what extent the subordinates participate in the budget’s follow-up phase.

In this study budget participation is measured by how much middle and lower managers (respondents) involved in and influence on the budget process in debriefing budgetary goals based on the questionnaires developed from Nouri & Parker (1989) and Qi (2010) and adopted according to the context of the office. In order to measure budget participation, the nine item scale questionnaire was adopted and developed which attempted to assess the respondent’s contribution and influence on the budget process which later on has an effect on the overall performance (Nouri & Parker, 1989; Qi, 2010; Dakhli, 2011).

Definitions and Measurement of Mediating Variables

Different scholars stated different variable that mediate the relationship between budget participation and job performance in their studies at different time. Even though there are many variables that mediates the relationship between the independent (budget participation) and the dependent (job performance) the researcher focus on the limited variables to avoid vagueness and confusion. Some of these variable considered are described accordingly:

Role Ambiguity

Role ambiguity is believed to exist in organizations when the required behaviors and expected performance levels are not clear to individuals (Kren, 1992; Breaux, 2004; Ali & Baloch, 2009). According to Chong (2007), role ambiguity is concerned with the lack of clear information regarding expectations, methods and consequences of the role to be played in an organization.

According to Christen et al (2006) Role ambiguity can be defined as a combination of uncertainty concerning the relationship between action and output and a lack of clear directions and behavioral requirements from the supervisor/managers. Gilboa et al (2008) defined role ambiguity from the dynamic nature of human behavior as the relative unpredictability of the outcome of an individual’s behavior.

Tang and Chang (2010) have defined role ambiguity as the lack of specificity and predictability of an employee’s job or role functions and responsibilities. In addition, Bebetsos (2007) defined role ambiguity as the lack of clear and consistent information that is associated with a person’s position

Generally, role ambiguity can be redefined from the above different authors point of view as lack of clarity about expected practice/behavior from a job, position or activity as per the intended objective. Role ambiguity exists when employees are not operational with good understanding of responsibilities and having little knowledge in what is expected of pertaining to the job under operations. While avoiding role ambiguity needs the difficulty arises in having the necessary resource and commitment from both the management and employees.

From the above definitions there are conditions whereby some individuals are likely to experience role ambiguity (Singh & Rhoads, 1991). These conditions are when:

crossing the boundaries, producing innovative solutions to non-routine problems, and experiencing diverse role expectations and demands from inside and outside of the organization.

In this study role ambiguity is measured based on the level of employees’ role in their authority and responsibility, their work objective, their necessary information about jobs, and the expectation of others of them (Idris, 2011; Ali & Baloch, 2007).

The measurement of role ambiguity is based on the questionnaire developed by Glissmeyer et al (2007) and adopted eight-item seven-point Likert-type scale which were used by different researchers in different time.

Organizational Trust

Trust is the belief that an individual would like to depend on another party with positive confident expectations (affect-based trust) which is associated with individual's performance (Ni et al, 2009). Trust indicates a depth assurance based on strong character, ability, or truth that someone or something has shown over time or across situations (Vazirani, 2009).

Vineburgh (2010) defined organizational trust as the employee’s feeling of confidence in that the organization will perform actions that are beneficial, not at least disadvantageous to him or her. Nitin Vazirani (2009) defined the term organizational trust as the organization’s willingness to be appropriately exposed to if another individual, group or organization is competent, open and honest, concerned, reliable, and identified with common goals, norms and values that the organization aspires.

Vineburgh (2010), expressed as to how organizational trust is capable of influencing employees’ perceptions, confidences and beliefs concerning whether the organizations are acting in the employees’ best interests or not. Once organizational trust is developed between the two parties there will be high reliance and commitment in them.

From the above definitions it can generalized that organizational trust is the confidence of employee on their organizations beliefs, values and norms and the open heartedness of the organization to value its employees. Apparently organizational trust is important and critical in both employees and organizations part if the organizations effectiveness and survival is to be secured.

Organizational trust at a macro level needs organizational policies and processes to be in place as well, there is also a need to build trust at a micro level in the organization around each employee so that free information can be shared and vague ideas minimized (Vazirani, 2008).

Measuring organizational trust is difficult in that it is a multidimensional and a multi-level concept (Paine, 2003). It includes dimensions such as competence, dependability/integrity, openness and honesty, vulnerability, concern for employees, identification control mutuality, satisfaction and commitment. In this study respondents were asked to rate (Lau et al, 2008) to what extent:

the respondent's superior takes advantage of opportunities to advance the respondent's interests;

the respondent feels free to discuss with the superior the problems and difficulties in the respondent's job without jeopardizing the respondent's position;

the respondents feel confidence that the superiors keep the respondent fully and frankly informed; and trust the respondents have the superior's decisions are justified when the superior's decisions seem to be against the interests of the respondent.

As a result, the measurement of trust is done by using the questionnaire developed by earlier researchers (Ni, et al, 2007) and adopted accordingly. The five-item instrument is a seven point Likert-type scale ranging from one (strongly disagree) to seven (strongly agree).

Organizational Commitment

The dynamic nature of the organizations environment and the changing nature of the business have led different researches to increase their attention from time to time on organizational commitment (Shore & Martin, 1989). Organizational commitment is defined as a wide range of feelings, attitudes, values, practices, having the core elements of loyalty to the organization and the involvement in the implementation of ideas in the interest of the organization (Othman, 2012). Other researchers consider it as the psychological bondage between the individual and the organization that strives for survival, growth and prosperity (Ongori, 2007; Sugioko, 2010; Othman, 2012). Organizational commitment shown by individuals and their organization could be expressed as a sense of belonging towards the organizational objectives (Sugioko, 2010).

A committed employee in any organization works with enthusiasm exerts high level of effort and believes in the objectives of the organizations success (Ongori, 2007).

Besides Krishna P. and Rawat (2009) have defined organizational commitment as an individual’s identification with and involvement in the organization, that is characterized by a strong belief in and acceptance of the organization’s goals and values, and a willingness to exert considerable effort on behalf of the organization that is conditioned to maximize value.

Sugioko (2010) has identified two types of commitment; affective commitment and continuance commitment. Krishna P. and Rawat (2009) add normative commitment additionally besides Sugioko’s. Affective commitment is characterized by strong trust and acceptance of the organization’s goals and values, and willingness to do the best and to be beneficial to the organization’s stakeholders (Krishna & Rawat, 2009; Sugioko, 2010). Continuance commitment begins with the perception related to the cost of leaving organization and those with this primary link stay because they have to and normative commitment is a perceived obligation to remain with the organization (Ni et al, 2009; Krishna & Rawat, 2009; Sugioko, 2010).

In sum organizational commitment is the heart and soul cost benefit analysis of employees towards the interest of the organization. Employees feel interested and involved in performing the tasks, rules and procedures that align the values of the organization and the employees.

Organizational commitment was measured by the questionnaire developed by the Organizational Commitment Questionnaire (OCQ) which was used by different researchers (Ni, 2007, Sugioko, 2010). It addresses:

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

a willingness to exert considerable effort on behalf of the organization,

selling the organization how careful and responsible it is, and

a strong desire to maintain membership in the organization.

The questionnaire was modified somehow according to the research under consideration.

Budget Adequacy

Budget adequacy is defined as the degree to which higher officials perceives in a way that budgeted resources are enough and adequate to fulfill their planning requirements (Parker and Nouri, 1998; Nasser et al, 2011). Simply budget adequacy is the availability of budget to run the prescribed plan of action in attaining the annual objective that aspires to attain the long run objective.

Nasser et al (2011) explains further that budget adequacy does not necessarily involve excess resources or biased budget forecasts.

Cho, (2010) defined budget adequacy as the level of budget to what it is adequate to accomplish certain programme or activity.

In sum, the definition of budget adequacy is straightforward to understand & self-explanatory. It can be defined as the degree/extent of the budget allotted to the given activity or program within the specified time horizon.

Budget adequacy was measured using an eleven item scale developed to determine whether individuals (respondents) perceive their budgeted resources as adequate for the performance of their jobs (Nouri and Parker, 1998). The eleven item scale was a seven-point Likert-type scale ranging from one (strongly disagree) to seven (strongly agree).

Job Satisfaction

Murray (1999) defined job satisfaction as a cluster of evaluative feelings about the job with the following aspects pay, promotion, supervision, benefits, contingent rewards, operating procedures, coworkers, nature of work and communications. From Murray’s definition the job is satisfying from the amount and fairness or equity of the salary, the opportunities and fairness of promotions, fairness and competence of managerial tasks, insurance and other fringe benefits, sense of respect, recognition and appreciations, the sharing of information within the organization.

Job satisfaction is defined by Baker (2004) as a positive emotional state that reflects an affecting response to the job situation in the organization (Skibba, 2002). The satisfaction of the job comes from the nature of the job itself, the working environment and the attitude of the management such as present pay, opportunities for promotion, supervision, and people on the present job (Skibba, 2002).

Bhatti and Qureshi (2007) defined job satisfaction as the degree of an employee’s affective orientation toward the work role occupied in the organization. The satisfaction of the job is the result of the employee’s appraisal of the extent to which the work environment fulfills the individual’s needs in the organization as compared to other organizations in the labor market.

Mudor and Tooksoon (2011) defined job satisfaction as an individual’s cognitive, affective, and evaluative reactions where one’s needs and outcomes match well encouraging the employee to work in the long term position.

From the above researchers’ one can understand that job satisfaction is the extent of individuals internal and external feeling of the organization to stay active and committed towards the attainment of the organizations goals. The difference between commitment and job satisfaction is that commitment is a more global response to an organization and job satisfaction is more of a response to a specific job or various facets of the job (Bhatti and Qureshi, 2007). Obviously commitment improves employee morale and avoids the outcomes of job satisfaction such as absenteeism and turnover (Suria & Ruhana Isa, 2011).

In this study job satisfaction is measured from different perspectives that affect employees not to feel secure the job that they are working. Some of the perspectives that are used to measure job satisfaction are the cooperativeness of staff, the implementation of policies and procedures fairly and equally irrespective of any measurement, career opportunities for advancement, sharing of skill and experience, recognition and proud given to the work that one did, the salary being paid, and the tolerance of the supervisors to listen and give the necessary advice.

Job satisfaction is measured by using the questionnaire developed by Weiss et al. (1967) known as The Minnesota Satisfaction Questionnaire (MSQ) which later used by many researchers. It is an eight-item questionnaire using a seven-point scale ranging from “strongly disagree” to “strongly agree” (Sugioko, 2010).

2.3 Theoretical Literature on the Relationship Between Independent Variables, Mediating Variables and Dependent Variables

This study’s theoretical model appears in Figure 2 shown below. Each link in the model is labeled by the hypothesis which is discussed subsequently. An effective employee is a combination of good skill, experience, visionary leaders and productive work environment (Anwar, et al, 2011). To get the maximum performance from employees, managers need to be aware of and should work to improve at all times about the factors that affect their performance and should provide them the necessary tools that let them succeed (Nouri & Parker, 1998; Leach-López, 2008; Anwar, et al, 2011). The theoretical links in the model discussed are budget participation, role ambiguity, organizational trust, organizational commitment, budget adequacy, job satisfaction and job performance.

Figure 2: Theoretical Model for Mediating Factors for Job Performance

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Source: Adopted from Sugioko and Nouri & Parker

Budget Participation and Job Performance

The well-versed natures of the employees have the opportunity to provide essential information regarding their task requirement than their superior which help managers to design a better goal that is capable of motivating employees (Kyj and Parker, 2006).

Earlier studies have anticipated that budget participation is positively and significantly linked to employee job performance (Kyj and Parker, 2006). In line with this opinion, budget participation leads to high commitment that aspire the employee to high performance which benefit them at last. Brownell (1982) studies report a significant positive association between budget participation and job performance but still others report a significant negative association (Bryan & Locke, 1967). Such conflicting prior studies have advanced the researcher to investigate potential intervening variables in the relationship between budget participation and job performance. Based on this assumption, the following hypothesis is developed:

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