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Budget participation and employee performance in real estate companies: the mediating role of budget goal commitment, trust and job satisfaction

Pedro Silva (CeBER, Faculty of Economics, University of Coimbra, Coimbra, Portugal)
Jorge Mota (GOVCOPP, Department of Economics, Management, Industrial Engineering and Tourism, University of Aveiro, Aveiro, Portugal) (CICEE, Lisboa, Portugal)
Antonio Carrizo Moreira (GOVCOPP, Department of Economics, Management, Industrial Engineering and Tourism, University of Aveiro, Aveiro, Portugal) (INESCTEC, Porto, Portugal)

Baltic Journal of Management

ISSN: 1746-5265

Article publication date: 12 December 2022

147

Abstract

Purpose

Recent years witnessed an exponential growth of the Portuguese real estate market. This growth has generated the need to implement effective management control tools to allow companies to improve their planning and monitoring of activities. Drawing on the agency and goal-setting theories, this paper explores the impact of companies' participative budgeting processes on employee performance in the real estate industry.

Design/methodology/approach

For this purpose, a questionnaire was developed and a sample of 116 employees that participate in the budgeting process of real estate organizations collected, with data analyzed using structural equation modelling.

Findings

The results show that participation in the budgeting process has an impact on employees' performance through budget goal commitment, trust and job satisfaction. However, no statistical support was found for the role of budgetary slack in this process.

Research limitations/implications

This study was conducted in a single industry and is based on self-reported measures of employees that participate in the budgeting process of their organizations.

Practical implications

The findings highlight the need for real estate organizations to involve their staff in the elaboration of budgets, contributing to a higher level of commitment to established goals, job satisfaction, trust and performance. Real estate organizations should provide adequate working conditions, foster their employees' autonomy and recognize their work.

Originality/value

The findings encourage real estate companies to extend the participation in the budget process to employees and, ultimately, to mitigate the probability of budget failure.

Keywords

Acknowledgements

Funding: This work has been funded by national funds through FCT – Fundação para a Ciência e a Tecnologia, I.P., Project UIDB/05037/2020.

Citation

Silva, P., Mota, J. and Moreira, A.C. (2022), "Budget participation and employee performance in real estate companies: the mediating role of budget goal commitment, trust and job satisfaction", Baltic Journal of Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/BJM-03-2022-0118

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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