Performance in a Budget-Based Control System: An Extended Expectancy Theory Model Approach

Kren, Leslie
September 1990
Journal of Management Accounting Research;Sep90, Vol. 2, p100
Academic Journal
This study formulates an extended expectancy model to provide a framework to study the effects of performance incentives and participation on individual performance in the organization. The extended expectancy model suggests that it may be inappropriate to view motivation as the most direct determinant of performance (as suggested by the expectancy model). Instead, it is proposed that motivation determines the commitment to performance goals while it is commitment to the goals themselves which acts to mobilize effort and increase persistence and thus is the most direct determinant of performance. A laboratory experiment, in which student subjects played a business game on a personal computer, was used to study the relationships proposed in the paper. In general, the validity of the extended expectancy model and the resulting hypotheses were empirically supported. The results suggest that subordinate performance will be maximized in settings in which difficult objectives are coupled with attempts to build high goal commitment.


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