THE MODERATING EFFECTS OF PERSONALITY ON THE RELATIONSHIP BETWEEN BUDGET PARTICIPATION AND MOTIVATION TO REACH THE BUDGET GOAL

Justin (JP) Stearns
University of Illinois – Springfield

ABSTRACT

This study presents the results of an experiment exploring the moderating effects of
personality on the motivational impact of increased participation in setting budget goals. The
author proposes that differences in personality dimensions will moderate the relationship between
the level of budget participation in setting budget goals and motivation to reach the budget goal.
To test these hypotheses an experiment utilizing undergraduate students completing a basic
decoding task was conducted. The experiment utilized three levels of participation in setting a
budget target: an assigned budget, a requested budget which is ultimately assigned, and a
negotiated budget. Instruments measuring the participant’s personality according to the five-
factor model of personality, perception of participation and motivation were administered. A
regression analysis was conducted to assess the relationship of participation, personality, and
interactions between participation and personality with motivation. Results indicate that an
interaction between personality and participation significantly affect individual motivation to
reach budget goals. These results suggest the effectiveness of a participative budgeting system
intended to increase motivation to achieve the budget target may be affected by the personality of
the participants in the system.

Keywords: Increased participation, motivation, moderating effects of personality, budget, budget participation