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Excerpt from Participation in Budgeting, Locus of Control and Organizational Effectiveness
At the individual level, the rw¿fie of reward structure as a conditioning variable was studied by Cherrington and Cherrington In an experimental setting, they found that where participation in budgeting was low, rewards administered on the basis of aggregate output rather than budget-related output, led to higher performance. Conversely, under conditions of high participation, performance was clearly superior when rewards were linked to twfiget achievement. The findings support the intuitively appealing notion that 'budgets, if provided salience through a process of high participation, should logically provide a primary basis for performance evaluation of the members of an organization.
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