involving the participation of subordinates can cause difficulties for associates to achieve it. Conversely, suppose the budget preparation by choice of aides can also cause subordinates' low motivation to achieve the optimal target. In that case,s, the involvement of subsidiaries in the budget preparation will significantly allow them to provide local information that is known. Research - Research on the impact of workplace program
participation on managerial attitudes and behaviors (Greenberg and Folger (1983); Kren and Liao,
1988). Some previous studies have shown that the behavioral impact of
involvement of budgeting are far more complex than
previously thought. Some studies have shown that the positive impact of
involvement may depend upon several moderation variables
(Brownell, 1982; Lindquist, 1995; Libby, 1999). Another research that reveals
the complexity of the processes by which involvement influences managerial
actions and behavior (Chenhall and Brownell, 1988; Kren (1992); Nouri and
Parker, 1998; Lau and Buckland, 2001). Other research investigated the same using information-related
variables (Kren (1992)), budget
completeness and organizational aspects (Nouri and Parker, 1998). Lau and Buckland (2001) suggest that interpersonal
trust are often an important intermediate
factor that influences the
connection among budget participation and work pressures. However, Lau
and Buckland's (2001) study shows that the consequences of interpersonal trust mediation are only partial. this
suggests that the link between employee engagement and work tension (and
possibly other triggering factors) is way quite expected and other important intervention elements are
under-accounted for like procedural fairness or interpersonal trust. Lau and
Tan's study (2006) draws on the general theory of organizational justice and
procedural justice theory, particularly, explaining the connection between
budget participation and therefore and the pressure of work. There are two
forms of organizational justice: distributive justice and procedural justice.
Distributive justice deals with the goals achieved or the content of justice.
In contrast, procedural justice is related to the means used to accomplish the
justice process within the organization. Management accounting studies like Lindquist (1995); Magner
et al. (1995); Libby, (1999); Wentzel (2002) pays increasing
attention to procedural justice and has found this sort of fairness to be important in explaining the connection
between accounting control systems and subordinate behavior. supported some previous research,
procedural fairness as an explanatory variable between budget participation and
employee behavior appears to be negligible. This
research will examine the effect of budget participation on the pressures
(tensions) of work mediated by procedural fairness and interpersonal trust.
This research model will try to investigate the establishment of the
relationship of budget participation with job pressures (tensions). The
Regional Revenue Office or which has now been renamed based on Government
Regulation No. 38 of 2007 on the Division of Government Affairs between the
Government, Provincial Government, and District / City Government and
Government Regulation No. 41 of 2007 on Regional Device Organization, then
since 2009 the Organization of Revenue Agency, Financial Manager and Regional
Assets or (BPPKAD) as the object of research tian. The underlying consideration
is that the Agency or The Agency becomes the backbone of local government in
shoring up local revenues to fund local government expenditures. Revenue Budget
at the Revenue Agency, Financial Manager and Regional Assets or (BPPKAD), is
very likely to cause work pressure for the head of the Agency / Agency or also
employees in the relevant office. 2. LIBRARY AND HYPOTHESIS REVIEW 2.1. Budget participation Garrison et
al. (2013) define budget participation as a budget prepared with all
employees or managers' cooperation and full participation at various levels. According to
Hansen and Mowen (2013), Budget participation may be a budgeting approach that permits managers liable for the budget performance to participate in budget
development. Budget participation communicates the sense of responsibility of
lower-level managers and encourages creativity. 2.2. Procedural Justice Can conceptualize procedural justice as assessing the fairness
of social norms relating to decision-making taken and how authorities and
others treat a person (Lind
&Tyler, 1988). Procedural justice is that the perceived justice of the means and
procedures wont to determine the
employee's amount of reward or compensation (Folger & Konovsky, 1989).This justice
covers all aspects of the organization as a way for leaders to assess employee
performance, inform performance results, and set rewards for employees in the
form of bonuses or promotions. Thibaut and Walker (1975, 1978) argue that the
concept of procedural justice relates to legal arrangements relating to the
effect of “control” in dispute resolution. 2.3. Interpersonal Trust Deutsch (1960) mentions that interpersonal trust has
two components: the belief in the ability and intention to relate. Mayer (1995) and Rousseau (1998) argue that
interpersonal beliefs are psychological states that consist of the choice to
accept vulnerability to the actions of others based on the expectation that the
other will perform specific actions, regardless of the ability to monitor or
control the other party. According to
Wang (2009) that trusts built by related parties are called interpersonal beliefs.
Pearson and Raeke (2000) and Hall et al. (2001) state interpersonal
trust as a trust created through repetition of interactions, which will test
expectations about the behavior of trusted people over time. This source of
interpersonal trust is from an individual's experience and personality. 2.4. Work Pressure The definition of work pressure (Job tension) is also as job stress from
Spurgeon (2008) stated as "... Stress results from an imbalance between
the demands of the individual and his or her ability to meet those demands". Demands that exceed the ability to cause stressful
situations within the individual, the control or control of the boss at the workplace causes work
pressure. Robbins
(2007: 793) suggests that stress is a dynamic condition in which the individual
faces the opportunity of obstacles related to what he wants. Then the results
are perceived as uncertain but essential. Work stress, also known as work
pressure, is a condition of dependence that affects emotions and thought
processes. Hasibuan (2009; 201) adds that people who experience stress will
become nervous and feel chronic conditions. 2.5. Hypothesis Based on
theoretical studies, previous research formulated the following hypotheses: 1)
The
Effect of Budget Participation on Procedural Justice Procedural
fairness will be challenging to realize as long as budget participation does
not guarantee that managers will receive the desired budget due to scarce
resource arrangements and employees do not improve the understanding of budget
distribution managers (Greenberg, 1993). Libby (1999) asserts that budget
allocation is essential during a consultative budgeting environment in which
individuals who do so cannot influence budget goals. In addition, when
individuals participate in the budget process, they gain control over the
budget process. There is a direct link between the rule of budget processes and
perceptions of procedural fairness demonstrated by Lind and Tyler (198);
Thibaut and Walker 1975). Libby (1999), Wentzel (2002), and Lau Tan
(2006) found that positive participation was related to perceived procedural fairness. Based on this description,
hypothesis 1: H1: Budget Participation has a significant effect
on Procedural Justice. 2)
The Effect
of Budget Participation on Interpersonal Trusts. The budget
participation process provides the exchange of information between the
boss/budgetary power holder and the subordinate/executor of the budget. The
budgeting process that meets these criteria allows getting a good reaction from
employees/subordinates, which means that the budget participation process will gain the trust of
employees/subordinates. Lau and Buckland Research (2001); Lau Tan (2006)
showed that participation is positively associated with confidence. Based on this description,
hypothesis 2: H2: Budget participation has a
significant effect on interpersonal trust. 3)
The
Effect of Procedural Justice on Interpersonal Trusts Work
evaluation procedures are supposedly excellent and fair if they are by the fairness of the regulations applied.
Strategies that fit these criteria make it possible to get a good reaction from
employees. As a result, superiors who carry out fair procedures will gain the
trust of subordinates. Research Lau and Sholihin (2005), Lau and Tan (2006),
Lau et., al. (2008), Hartmann and Slapnicar (2009) found that procedural
fairness significantly positively affected trust. Based on this description,
hypothesis 3: H3:
Procedural Justice has a significant effect on Interpersonal Trust. 4)
The Effect of Procedural Justice on Work
Pressures. When
individuals perceive that decisions stem from a fair process, they will commit
to the goal. Members of the organization believe that the results of decisions stem
from the principle of justice. This
condition will be able to prevent employees from work pressure. For example,
Earley and Lind (1987) found a significant pathway between the two, where
procedural fairness significantly affected an employee's work stress. Based on
this description, hypothesis 4: H4: Procedural Justice
has a significant effect on work pressures. 5)
The Effect of Interpersonal Trust on Work Pressure. Johnson and Johnson (2009) argue that trust is the
belief that others will do their best so that there is an attitude of
acceptance, support, sharing, and cooperation. Trust also includes consistent,
honest and trustworthy behavior that a person exhibits. When employees trust
the boss in the budgeting process, this can reduce work tensions/ pressures.
Previous studies (Hopwood,
1972; Otley, 1978; Ross, 1994) have shown that budget participation can affect
employee work tensions through intervention variables such as interpersonal
trust among subordinates and
superiors Based on this description,
hypothesis 5: H5:
Interpersonal trust has a significant effect on work pressure. 3. METHOD Employees of
the Regional Financial and Asset Management Revenue Agency (BPPKAD) in Java
Island are defined as the population. The sample of this study is employees of
the Regional Revenue, Financial, and Asset Management Agency (BPPKAD) on the
island of Java. They are involved or participate in the preparation of the
budget. The withdrawal of this study sample is random sampling. As many as 60
respondents obtained data. Budget
participation was measurable
by 6 questionnaires on a 5-point Likert scale. Procedural fairness was measurable by 6 questionnaires on the 5-point Likert
scale, 5 questionnaires measured interpersonal trust on a 5-point Likert scale,
and work pressure was measurable by 9 questionnaires on the 5-point Likert scale. Referring
to Hair et al., (2011) and Kock (2011) hypothesis testing using SEM-PLS with warps version 3.00
program. 4. RESULTS
AND DISCUSSIONS 4.1. Results Validity
and Reliability Test (Second Stage) 1) Validity Test Loading factors and average variance
extracted (AVE) show convergent validity. In running 1 (first) for indicators
of interpersonal trust variables (IT), namely IT6, procedural justice variables
(PJ), namely PJ2 and PJ5, and work pressure variables (WP), namely WP5 and WP6,
have loading factor values below 0.70 as required. IT6 loading factor value of
0.648; PJ2 of 0.683; PJ5 of 0.276; WP5 of 0.254; and WP6 is 0.400. These
indicators on the 2nd running remove from the model. In the 2nd running obtained, the loading
factor results of each construct indicator are declared valid with a loading
factor value of > 0.7 (Appendix 1). Average
variance extracted (AVE) values use for the evaluation of convergent
validity, with criteria having to be > 0.50 (Fornell and Lacker, 1981). The
second running result is presented in Table 1, indicating that all
the variables studied are already qualified as specified because all AVE values
of each variable are> 0.50.
The results of the discriminant validity test are
visible from the results of the square root of AVE and the correlation between
latent constructs. Table 2 presents the real root value of AVE and the correlation
between latent constructs for the second run, showing the correlation values
between latent constructs for all variables showing values smaller than the
square root values of AVE. It can be
concluded that all constructs have met discriminant validity because they have
an average variance extracted > correlation between constructs (Kock, 2012); Ghozali and Latan, 2012).
2) Reliability
Test Construct reliability are visible from composite reliability and cronbach’s alpha Cronbach's
alpha values. Table 3
presents composite reliability and
cronbach’s alpha values of each construct for the second run, showing
the cronbach’s alpha coefficient and
composite reliability values for all variables studied already qualified
> 0.70, meaning all variables studied are reliable.
Full Structural Model
Testing Structural
model output – full model presented in Figure 1. Table 4 shows the path coefficient and the p
values as follows: 1)
The
BP → PJ line shows a
coefficient value of 0.741 with a value of P < 0.001. 2)
The BP
→ IT line shows a
coefficient value of 0.330 with a value of P < 0.001 3)
The
IT → WP line shows a
coefficient value of 0.350 with a value of P = 0.007. 4)
The
PJ → IT line shows a coefficient value of 0.590 with a value of P <
0.001. 5)
The
PJ → WP line shows a coefficient value of 0.530 with a value of P < 0.001.
Table 4
presents the results of the model fit index and p-values, namely the three fit
model indices consisting of the average path coefficient (APC), the R-Squared
average (ARS) and the average variance inflation factor (AVIF). The model is declared fit
if the p-value of APC and ARS <0.05 and AVIF>5 (Kock, 2012). Based on Table 4, the goodness of fit model has been fulfilled. Table 4 also presents the
f-squared coefficient as an effect measure. As Hock (2013) and Hair et.al
(2013) the effect size is a path coefficient from a practical point of view,
consisting of 3 types, namely strong with effect size > 0.35; moderate if
the effect size is between 0.15 to 0.35 and weak if the effect size is 0.02 to
0.15.
The full collinearity values of VIF,
Q-squared and R-squared values are shown in Table 5. If
the R-squared value is higher, it means that the explanatory power of
predictors of latent variables in the model is getting better. Because
R-squared is a measure of endogenous variables, which describes the amount of
variance in exogenous variables. R-squared is always positive, while Q-squared may be negative. Expected Q-squared
coefficient > 0 as a measure of predictive validity can be accepted. Full
collinearity VIF shows the results of the full collinearity test, both lateral
and vertical multicollinearity. As Kock (2013) that the criteria for the full
collinearity test < 3.3.
4.2. Discussion Hypothesis 1 states that budget participation has a significant effect on procedural fairness, supported by this study. Budget participation proved to have a significant positive impact on procedural justice. This result indicates that the involvement of agency employees in the budgeting process will encourage the creation of procedural fairness in the relevant agencies. The results of respondents' answers based on the highest loading factor values (budget participation variables PA5, PA2, and P3) are as follows: 1) The head of the agency always pays attention to the contributions made by the budget team. 2) The frequency of giving advice and opinions on budget proposals is adequate and involves employees setting performance targets. Based on the respondent's answer, agency employees feel
involved in budgeting activities as performance targets. This condition
certainly encourages and even proves that the agency where they work has
created procedural justice. The
results of this study support lind and Tyler's research (198); Thibaut and
Walker 1975). Libby (1999), Wentzel (2002), and Lau and Tan (2006) showed that
participation is positively associated with interpersonal trust in
organizations. Hypothesis 2 states that Budget Participation has a
significant effect on interpersonal trust. Acceptance of hypothesis 2 indicates
that the agency's head always pays attention to the budget team's
contributions. The frequency of advising and opinions on budget proposals is
adequate. It involves employees setting performance targets, which means that
when agency employees feel involved in budgeting activities as performance
targets, this condition will cause trust from employees/subordinates. Likely,
trust between employees in the agency will also be more vital. The results of this study are in line with
the results of research from Lind and Tyler (198), Thibaut and Walker (1975),
Libby (1999), Wentzel (2002),
Lau and Tan (2006) stated that participation is positively related to
interpersonal trust in organizations. Hypothesis 3 states procedural fairness has a
significant effect on interpersonal beliefs, supported by this study.
Acceptance of hypothesis 3 indicates that superiors who carry out fair
procedures will gain the trust of subordinates. When the head of the agency
does not violate the norms of professional guidelines in budgeting, employees
involved in budgeting can provide input for decision-making, and final budget
decisions are made based on accurate information. Can increase employee
confidence in superiors. The findings of
this study are in line with the research of Lau and Sholihin (2005), Lau and
Tan (2006), Lau et al. (2008) as well as Hartman and Slapnicar research
(2009), which found that procedural fairness positively affects trust. Hypothesis 4 states procedural fairness has a
significant effect on work pressures, evidenced in this study. Acceptance of
hypothesis 4 indicates that when the head of the agency does not violate the
norms of professional guidelines in budgeting, employees involved in budgeting
can provide input for decision making, and final budget decisions are made
based on accurate information. Can increase work pressure for employees. The
underlying reason if traced from the employee's response to the questionnaire because
the employee feels the workload or responsibility or work time becomes
excessive or too heavy. The employee feels chased by time at work. So fair
treatment by the agency's head turns out that it causes stress in position for
some employees. The results support Earley and Lind's (1987)
research which found that procedural fairness significantly affects the focus
of employee work. Hypothesis 5 states interpersonal trust has a
significant effect on work pressures evidenced in this study. Acceptance of hypothesis
5 indicates that although agency employees believe that the head of the agency
has acted reasonably and responsibly, performs duties consistently, has an
openness and morals on the accuracy of information communicated politely and
appropriately, it increases work pressure for employees. If traced from the employee's response to the
questionnaire, the underlying reason is that employees feel the workload or
responsibility or work time becomes excessive or too heavy. Employees feel
chased time at work. The results of this study support Hopwood's view (1972),
Otley (1978), and Ross (1994). Interpersonal trusts can influence work
pressure. 5.
CONCLUSIONS AND SUGGESTIONS Hypothesis 1
is supported or accepted. These results indicate that when individuals participate
in the budget process, they gain control over the budget process and procedural
fairness of the agency. Hypothesis 2 is supported or accepted. These results
indicate that the budget participation process gained the trust of agency
employees. Hypothesis 3 is supported or accepted. Acceptance of hypothesis 3
means that fair procedures certainly gain the confidence of subordinates.
Hypothesis 4 is supported or accepted. These results suggest that procedural
fairness significantly affects agency employees in the face of work stress.
Hypothesis 5 is supported or accepted. These results indicate that employee
trust in the superior in the budgeting process affects the employee's work
pressures. Advice for future researchers is related to selection and sampling with techniques by the research objectives, such as purposive sampling techniques. Other researchers need to consider using the number of indicators in each construct to hope that the natural conditions in the field obtain the results.
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