Académique Documents
Professionnel Documents
Culture Documents
OF PERCEPTION OF EQUITY
Jeffrey J. Quirin, David P. Donelly and David OBryan
ABSTRACT
The concept of organizational commitment has recently impacted the
participative budgeting and employee performance streams of
accounting research. Specifically, a series of studies by Noun, Nouri
and Parker have shown that an individuals level of organizational
commitment negatively impacts budgetary slack and positively
impacts employee performance (Nouri, 1994; Nouri & Parker, 1996a, b,
1998). A related issue, which has seen little attention in accounting
research, is the notion of what causes or antecedes an individuals
level of organizational commitment. The current study attempts to
address this issue by investigating the relationship between an
individual's perception of equity and organizational commitment. Using
a cross-organizational design, measures of perceptions of pay and
workload
equity,
organizational
commitment,
and
self-rated
performance were gatheredfrom a sample of 105 employees from 15
organizations. In accordance with the study's hypotheses, results
reveal that a significant portion of an individuals organizational
commitment can be explained by his/her perception of pay equity and
workload equity. Additional analysis reveals that perception of equity
has a significant, direct effect on performance, but this effect is fullymediated by organizational commitment.
INTRODUCTION
For die past two decades the concept of organizational commitment
has grown in popularity in the literatures of industrial/organizational
psychology and organizational behavior. The concept has received a
great deal of empirical study both as a consequence and an
antecedent of other work-related variables of interest In theory,
committed employees should work harder, should remain with the
organization, and should contribute to an organizations greater
effectiveness (Mowday, Steers & Porter, 1979). Mowday, Porter and
Steers (1982) suggest that gaining a greater understanding of the
processes related to organizational commitment has implications not
only for employees and organizations, but also for society as a whole.
Society tends to benefit from employees organizational commitment in
terms of lower rates of job movement and, perhaps, higher national
work productivity and/or quality.
The accounting literature has also been impacted by the commitment
construct A series of studies by Noun and Parker have investigated
Performance was measured using Mahoney et al.s (1963,1965) multidimensional nine-item instrument. Respondents were asked to evaluate
their individual performance with regard to eight performance
dimensions, such as planning, coordinating, supervising, and staffing.
Respondents were then asked to rate their overall performance in the
final question. This instrument is reported in the Appendix. The
instrument was constructed using a seven-point Likert-type scale
ranging from: 1 - well below average; to 7 - well above average. Prior
studies report acceptable levels of reliability and validity for the
Mahoney et al. (1963, 1965) instrument (Heneman, 1974; Lau, Low &
Eggleton, 1995). hi this study, the Cronbach alpha was 0.94.
Descriptive statistics for the measure can be found in Table 1.
Although several studies have criticized self-reported measures of
performance as unreliable due to leniency bias (e.g. Parker, Taylor,
Barrett & Martens, 1959), other studies have noted that leniency bias is
inconsequential unless the bias is systematically related to an
independent variable (Chenhall & Brownwell, 1988; Kren, 1992). The
use of self-reported measures also minimizes the halo effect that
may occur with superior ratings (Nealy & Owen, 1970; Heneman,
1974).
Halo effects result from the tendency to evaluate globally* or for
managers to evaluate using only one cognitive dimension.
Path Analysis
Path analysis was used to evaluate the proposed hypotheses. The path
model used in the analysis corresponds to the model in Fig. 1. In Fig. 1,
each link between the variables has a path coefficient that measures
the impact of the antecedent variable in explaining the variance in the
outcome variable. For example, the path coefficient for the link
between perception of equity and organizational commitment indicates
the increase in organizational commitment, measured in standard
deviations, associated with a one standard deviation increase in
perception of equity. Values for the path coefficients were estimated
using regression and correlation analysis (Asher, 1983). The path
coefficient value is the standardized beta coefficient found by
regressing the outcome variable on the appropriate antecedent
variable(s).
EMPIRICAL RESULTS
Main Analysis
Table 2 presents the correlation matrix for the variables. Table 3
presents the results of the main analysis and lists each hypothesis and
pay and workload equity are able to account for a significant portion of
the variation in organizational commitment.
Results of this study also indicate that perception of equity has a direct
impact on performance However, this effect is mediated by
organizational commit mne when organizational commitment is
entered into a path model. These results are based upon a crossorganizational research design consisting of individuals at wious career
stages.
This study possesses a number of limitations. First, survey studies are.
by nature, subject to both lack of control limitations and potential bias
associated with seif-reporting. Second, problems of omitted and
uncontrolled intervening or moderating variables may also exist. Third,
the sample of employees was gathered from a database of alumni from
one mid-western university. To the extent that graduates of this
university do not represent the population of employees found in the
overall corporate environment, the results may not be representative.
Finally, in interpreting the results of this study, causality must be
considered. Although alternative methodologies, such as experiments,
may be able to provide more information about causality, their ability
to model complex organizational behavior may be limited. With respect
to this study, a laboratory experiment may be able to yield more
causality than a survey approach, but simulating organizational
commitment in a laboratory setting would be difficult
Given that a linkage between budgetary participation and
organizational commitment has been established in prior literature, the
equity/organizational commitment relationship revealed in this study is
quite intuitive. In the context of participative budgeting, it is likely that
participation that is deemed successful by employees has a much
different affect on commitment than participation that is deemed
unsuccessful. It is possible that employee perceptions regarding the
participation process are captured in a perception of equity measure
and these perceptions subsequently affect organizational commitment.
Thus, organizations concerned with employee commitment and
subsequently increased performance should not only address potential
pay and workload inequities resulting from their organizational
structure, but also design budgetary participation schemes which are
deemed successful by employees.
The results of this research are also useful to researchers of both
equity theory and organizational commitment. The study provides
researchers with a survey instrument which measures perceptions of
both pay and workload (effort) equities. In light of perception of
equitys strong impact on organizational commitment, future research
is needed to investigate the impact of equity on other existing