Abstract Organizational theorists have posited a positive relationship between employee performance and participation in budgeting or goal setting (Argyris 1952; Becker and Green 1962). In examining this proposition, empirical research has studied the motivational and cognitive mechanisms by which participation may be related to employee performance (Locke et al. 1986; Murray 1990). Cognitive mechanisms me dude factors such as the acquisition and use of information and comprehension of job requirements (Locke et al. 1986). Kren and Liao (1988) argue that empirical accounting research has generally focused on the motivational effects of participation. In general, results have been mixed (Murray 1990). While Merchant (1981) found a positive relationship between motivation and participation, Brownell and Mclnnes (1986) did not find such a relationship. The results prompted Brownell and Mclnnes to suggest that future research should examine performance benefits of participation that are not mediated by motivation. Recently, accounting researchers have studied the role of cognitive factors in explaining the relationship of participation to performance. Chenhail and Brownell (1988), for example, found that budgetary participation provided information that reduced role ambiguity that contributed to improved performance, and Mia (1989) found the relationship between participation and performance to be moderated by job difficulty. The objective of this article is to examine the perceived level of jobrelevant information as an intervening variable between budgetary participation and individual performance. Job-relevant information (JRI) is information that facilitates job-related decision making. The results of this study, based on a questionnaire survey of division managers in large corporations, suggest that participation affects performance, not directly, but through JRI. In addition, this positive performance effect of participation persists and is more pronounced when environmental volatility is high, although the results do not provide unambiguous evidence.
Leslie Kren (Wed,) studied this question.