PENGELOLAAN SUMBER DAYA AIR SEBAGAI UPAYA PELESTARIAN DAN PENINGKATAN WISATA BUDAYA BERWAWASAN LINGKUNGAN
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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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ANTECEDENTS OF BUDGETARY PARTICIPATION:
ENHANCING EMPLOYEES’ JOB PERFORMANCE
By:
FATMAWATI NIKMAH NIM: S 4307067
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ANTECEDENTS OF BUDGETARY PARTICIPATION:
ENHANCING EMPLOYEES’ JOB PERFORMANCE
By:
FATMAWATI NIKMAH NIM: S 4307067
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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truthfully that this thesis entitled “Antecedent Budgetary Participation: Enhancing Employees’ Job Performance” is originally made by the researcher.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,
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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...
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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
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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
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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
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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
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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
FATMAWATI NIKMAH NIM: S 4307067
ANTECEDENTS OF BUDGETARY PARTICIPATION: ENHANCING EMPLOYEES’ JOB PERFORMANCE
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
FATMAWATI NIKMAH NIM: S 4307067
ANTECEDENTS OF BUDGETARY PARTICIPATION: ENHANCING EMPLOYEES’ JOB PERFORMANCE
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
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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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commit to user 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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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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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
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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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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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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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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
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commit to user 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
Toler ance
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
Standar dized Coeffic
ients
t Sig.
Collinearity Statistics
B Std.
Error Beta
Toler ance
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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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
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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
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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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