The role of budgetary information in performance evaluation

Abstract

This paper provides a review of studies that focus on the use of budgetary information in performance evaluation. Our survey shows that studies have recognized that this information is used in a variety of ways. In addition, various psychological and behavioral effects of alternative uses as well as factors that give rise to a particular use have been identified. Notwithstanding this breadth of analysis, a critical review of the literature shows that in recent years theoretical development has been piece meal, and there are instance of selective referencing and an uncritical acceptance of theory statements in related literature. More generally, theoretical development has taken a secondary role to an emphasis on statistical analysis. Further, recent empirical studies tend to be method-driven in their selection of relevant phenomena and, in addition, include several characteristics that cause an uncoupling of the connection between theory statements and empirical test. The present review interprets these limitations as providing opportunities for future research.