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THE RELATIONSHIP BETWEEN PERFORMANCE EVALUATIVE STYLES AND JOB-RELATED TENSION IN A HIGH PARTICIPATORY ENVIRONMENT : THE ROLES OF TRUST AND PARTICIPATION

Prior studies found that a compatible combination of high budget emphasis and high participation was associated with better behavioural outcomes (eg. lower-job related tension) than other combinations of budget emphasis and participation. Yet there has been little research to investigate why this particular combination of budget emphasis and participation leads to better behavioural outcomes. This study therefore investigates the reasons why a high budget emphasis-high participation combination leads to lower job-related tension. A path analytical model, which investigates the intervening effects of trust and participation on the relationship between budget emphasis and job-related tension, was used. The interaction between budget emphasis and participation was dealt with by testing the model in Norway, a surrogate for a high participatory environment because of its low power distance culture and its highly centralised and formalised industrial relations systems which emphasise democratic work environment. The results indicate: (i) that Norwegian managers generally enjoyed a very high level of budgetary participation; and (ii) a high budget emphasis situation in Norway (high participation) was found to have an insignificant direct effect on job-related tension, but a strong indirect effect through trust and participation. Based on these results, it is possible to conclude that a high budget emphasis and high participation combination will lead to lower job-related tension. The reason for this is partly because this combination promotes high trust between the subordinates and their superior. Trust, in turn, leads to lower subordinates’ jobrelated tension.