Impact of budget-based performance evaluation on job performance and job satisfaction : empirical evidence from Thai commercial banks

Abstract

The purpose of this study is to investigate the impact of budgetbased performance evaluation on job performance and job satisfaction in the Thai commercial banks. In this study, the budget-based performance evaluation is classified as congruence and incongruence styles, based upon the hypothesized relationship between budget participation and use. In particular, the congruence style is defined as either 1) high budget participation and use, or 2) low budget participation and use; the incongruence style is defined as either 1) high budget participation and low budget use, or 2) low budget participation and high budget use. Moreover, this study is also intended to investigate whether the impact of budget-based performance evaluation o job performance and job satisfaction in the Thai commercial banks is contingent upon firm size and firm ownership. The research methodology in this study employs an empirical test. The questionnaires are administered to the branch managers of the Thai commercial banks located in Bangkok. ANOVA is used to analyze the impact of budget-based performance evaluation on job performance and job satisfaction in the all-bank sample, the large and small bank sample, and the owner-managed and professional-managed bank sample, respectively. Empirical results indicated that budget-based performance evaluation does not have significant impact on job performance and job satisfaction. However, budget participation is found to have significant impact on job performance and job satisfaction. The impact of budget participation on job performance is more pronounced in large-bank and owner-managed bank samples. Budget participation provides an opportunity to reduce ambiguities associated with bank goals and directions that are believed to increase job performance. Moreover, the impact of budget participation on job satisfaction is more pronounced in small-bank and owner-managed bank samples. Budget participation provides an opportunity through decision-making involvement to increase role recognition, which is perceived as intrinsic rewards that are believed to increase job satisfaction.