The mediating effect of task-relevant knowledge and self-efficacy on the budgetary participation: Job performance relationship

While widely studied, the direct impact of participation in the budgetary process on job performance remains uncertain. As such, researchers have adopted a contingency approach investigating various moderating and mediating factors. The current study examines the mediating effect of two cognitive variables—task relevant knowledge (TRK) and self-efficacy (i.e., task-specific self-confidence). Three groups of hypotheses were tested. The first group deals with the effect of participation on TRK. The hypotheses in this group assert that the more a manager is allowed to participate in the budgeting process, the greater will be the manager\u27s TRK. In turn, a greater level of TRK will be associated with a greater level of performance. The second group of hypotheses proposes the same effect for self-efficacy (i.e., greater participation will be associated with higher levels of self-efficacy which, in turn, will be associated with higher levels of performance). Finally, the third hypothesis considers the reciprocal relationship between TRK and self-efficacy. To test the hypotheses, data was gathered from managers in a wide variety of industries using a survey questionnaire. Measures of self-reported performance, self-efficacy, participation, TRK, personality measures, and demographic information were collected. Structural equations modeling was the primary statistical technique used in the study. The results suggest that an association does exist between participation and self-efficacy and also between self-efficacy and measures of individual performance. The results also indicate that participation is associated with TRK; however, TRK is not directly associated with increased performance—only indirectly through self-efficacy. Additional tests indicate that previous models that found a direct link between TRK and performance were possibly in error. Also, the results indicate that a reciprocal relationship between TRK and self-efficacy does exist. This relationship is unusual, however, in that TRK was found to be negatively associated with self-efficacy. In other words, the more knowledge of the job that managers possess, the less confident they feel about their ability to perform. Additional research is needed to verify these results