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Finance, Accounting and Business Analysis 
Volume 5 Issue 2, 2023 

http://faba.bg/       
ISSN  2603-5324 

 

The Correlation of Budgeting, Decentralization and Work Motivation on 

the Performance of Local Government Organizations in East Java 

Province, Indonesia 

 

Ninik Srijani 1* , Siti Aisyah2 
  
Faculty of Teacher Training and Education, Universitas PGRI Madiun, Indonesia1 

Faculty of Teacher Training and Education, STKIP Lumajang, Indonesia2 

*Corresponding author 

 

Info Articles   Abstract 

 
 

History Article: 
Submitted 20 July 2023 

Revised 21 November 2023 
Accepted 25 November 2023 

 

 Purpose: This study aims to investigate the influence of budgeting, 

decentralization, and work motivation on the performance of regional 

government agencies in East Java Province, Indonesia. 

Design/Methodology/Approach: This study employs a quantitative 

approach, collecting data through questionnaires administered to 

employees of regional government agencies in East Java Province, 

Indonesia. Regression analysis is used to analyze the relationship 

between budgeting participation, decentralization, work motivation, 

and the performance of regional government agencies. 

Findings: The findings of this research indicate a positive relationship 

between budgeting, decentralization, work motivation, and the 

performance of regional government agencies. Budgeting has a 

significant impact on the performance of regional government agencies, 

followed by work motivation and decentralization. 

Practical Implications: The results of this study have significant 

practical implications for the government of East Java Province, 

Indonesia, in enhancing the performance of regional government 

agencies. Increasing employee participation in budgeting, implementing 

effective decentralization, and enhancing work motivation are 

considered crucial to achieving better performance in public services. 

Originality/Value: This study provides original contributions to 

understanding the factors influencing the performance of regional 

government agencies in the context of local governance. By 

incorporating budgeting participation, decentralization, and work 

motivation as research variables, this study also offers a more 

comprehensive understanding of efforts to enhance the performance of 

local government. 

Paper Type:  Empirical Research. 

 

Keywords:  

Budgeting, 

Decentralization, Work 

Motivation, and Regional 

Government Agencies  
 

 

JEL: H11, H72, H76  

   
 

 
* Address Correspondence:   

E-mail : Niniksrijani@unipma.ac.id1 

iisamunaris@gmail.com2  

 

  

mailto:Niniksrijani@unipma.ac.id1
mailto:iisamunaris@gmail.com
https://orcid.org/0000-0003-3876-4690


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INTRODUCTION 

 
Government agencies play a crucial role in regulating the interests of the nation and the state. As part 

of the concept of regional autonomy, the government of East Java province, Indonesia is committed to 

providing the best public services in a transparent manner and coordinating Regional Device Organizations 

such as the regional secretariat and others (Afonso 2021; Ali and Haliah 2021; Džinić 2022; Klotz 2022; 

Kuroki 2022; Swoczyna and Karaczun 2023). In this context, the performance of government officials 

becomes a primary concern as it significantly impacts the public sector. Performance is measured based on 

the quantity of assigned activities' outcomes and the quality of skills and abilities in the job. Evaluation and 

future planning are conducted using performance measures within the organization. High performance 

reflects the increased effectiveness and efficiency of members in completing their tasks. 

Budgeting is an important issue in government financial management. The budget serves as an 

effective planning and control tool in the operations of agencies, both in the short and long term (Bayramov 

2021; Höglund et al. 2021; Nuti et al. 2021; Pasha and Guzman 2023; Tauro et al. 2021). Participation in 

the budgeting process is a key factor in effectively implementing the budget. This participation process 

involves setting goals and preparing the budget aimed at improving organizational performance and 

effectiveness. Participating in budgeting can enhance the performance of leaders in organizational units and 

overall improve government performance. 

Good financial management also supports the success of decentralization. Decentralization involves 

the transfer or delegation of authority from the central government to regions, sub-ordinate government 

units, semi-autonomous governments, regional authorities, functional authorities, and autonomous local 

governments to plan and manage public functions (Çukur 2020; Lexutt 2020; Taamneh et al. 2020; Siegel 

2022; Sun and Razzaq 2022; Xu 2022; Wang et al. 2023). The goal of decentralization is to prevent financial 

centralization, ensure fairness, equality, and democratization at the local level. The performance of 

responsible government officials plays a key role in implementing decentralization. Decentralization allows 

organizations to develop capabilities, act autonomously, and improve the quality of decisions that drive 

performance improvement. 

Work motivation is an important factor that drives individual behavior in an organization. High 

motivation encourages perseverance to achieve optimal work outcomes. Work motivation is necessary for 

all employees as a driving force to fulfill needs, positively adapt to the environment, achieve goals, and 

effectively complete organizational tasks (Lenihan et al. 2019; Murnieks et al. 2020; Pollack et al. 2020; 

Pham et al. 2020; Effendi et al. 2023; Kosycarz et al. 2023; Nzioka et al. 2023; Wang and Nayak 2023). This 

study aims to investigate the influence of budgeting, decentralization, and work motivation on the 

performance of regional device organizations in East Java province, Indonesia. By understanding and 

analyzing these factors holistically, it is expected to gain a more comprehensive understanding of how to 

improve the performance of regional device organizations in the context of increasingly complex and 

evolving local governance. 

 

LITERATURE REVIEW 

 

Budgeting 

Research by Jumady et al. (2021) found that employee participation in budgeting has a positive 

impact on organizational performance. Through participation, employees feel more engaged in the decision-

making process, which, in turn, enhances their commitment, motivation, and performance. However, a 

study by Wagner et al. (2021) and Klein et al. (2023) suggests that employee participation in budgeting is 

not positively related to organizational performance. This participation allows employees to be involved in 

providing input, expressing their needs, and feeling responsible for the final outcome, contributing to 

performance improvement. 

 

Decentralization  

Research by Feng et al. (2022) and Zhao et al. (2022) examined the influence of decentralization on 

organizational performance. They found that effective decentralization has a positive impact on 

organizational performance. Decentralization provides opportunities for government agencies to make 

decisions that better suit local conditions, enhancing responsibility and accountability, and motivating 

employees to achieve better results. Another study by Bellavitis et al. (2023) indicates that decentralization 

is not positively correlated with organizational performance. Poorly implemented decentralization can 

reduce efficiency, responsiveness, and the quality of services provided by government agencies, ultimately 

affecting overall organizational performance. 

 



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Recommendations: 
It has been prepared based on the 

Conclusions and Recommendations 

to be delivered to stakeholders 

 

 

 

Work Motivation  

Research by Pancasila et al. (2020) found that work motivation has a positive influence on 

organizational performance. High levels of work motivation drive employees to work more diligently, 

improve work quality, and achieve better results. Studies by Widisatria et al. (2021) and Zacharias et al. 

(2021) do not support a positive relationship between work motivation and organizational performance. 

Motivational factors such as recognition, involvement in decision-making, and career development 

opportunities do not play a significant role in enhancing employee work motivation and, in turn, affecting 

organizational performance. 

In this study, the researchers will integrate those perspectives and take a holistic approach to 

understand the correlations between budgeting, decentralization, work motivation, and the performance of 

regional device organizations. By examining findings from previous research, it is expected that this study 

will provide a more comprehensive understanding of these factors and their impact on the performance of 

regional device organizations. 

 

METHOD 

 
This study will utilize a quantitative method with a cross-sectional research design to collect and 

analyze the necessary data in answering the research questions. The cross-sectional design allows for data 

collection from various variables of interest at a specific point in time. In this study, the variables to be 

measured simultaneously are budgeting, decentralization, work motivation, and the performance of regional 

device organizations in East Java province, Indonesia. A quantitative approach will be used to obtain 

numerically measurable data and analyze it using statistical methods. The population of this research is all 

regional device organizations in East Java province, Indonesia, while the sample will be randomly selected 

to represent various sectors and levels of importance within the regional government. The appropriate 

sample size will be determined through calculations based on the desired population. Data will be collected 

using survey methods by distributing questionnaires to respondents in the sampled regional device 

organizations. The questionnaire will include questions related to participation in budgeting, 

decentralization, work motivation, and organizational performance. Additionally, secondary data such as 

budget reports and previous performance evaluations will also be collected to support the analysis. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

Source: data processed by researchers (2023). 

Figure 1.  Conceptual Framework 

I n p u t  A n a l y s i s 
 

Theory Reference : 
 

(Atuahene 2023) 

 “A Theory of Stategraft” 
 

(Machidori 2023) 
“Decentralization 

Reforms” 
 

(Van et al. 2023) 
“Work Effort” 

Phenomenon : 
The financial management 

of semi-autonomous 

government, regional 

authorities, functional 

authorities, and 

autonomous local 

governments to plan and 

manage public functions. 

 

P r o c e s s  A n a l y s i s : 
 

Method : 
Used to measure the influence of participation in budgeting, 

decentralization, and work motivation, which are considered 

predictor variables, on the performance of regional device 

organizations, which is considered the explanatory variable. With 

this perspective, hypotheses will be formulated, and statistical 

analysis will be conducted to measure and test the relationships.  

R e s e a r c h  H y p o t h e s i s 

 

Budgeting 
 

Organizational 

Performance 

Conclusions and 

recommendations : 

 

Obtained from the 

results of the discussion 

Output Analysis 
 

Outcome Analysis 
 

Decentralization 

Motivation 

Work 



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The framework above is a model of theoretical study, empirical study, and synthesis of a research 

framework that will serve as the basis for testing the validity of hypotheses. Based on indications from 

observed phenomena and supported by relevant theories, prior to relying on facts obtained through data 

collection, the hypotheses proposed in this research are as follows:  

H1 : Budgeting has a positive influence on the performance of local government organizations 

H2 : Decentralization has a positive influence on the performance of local government organizations 

H3 : Work motivation has a positive influence on the performance of local government organizations 

 

The hypotheses are formulated based on the expectation that there is a relationship between employee 

participation in budgeting, decentralization, work motivation, and the performance of local government 

organizations. The next step in the research process is to collect data and analyze it to test the validity of 

these hypotheses. 

This research utilizes a research model that includes testing the coefficient of determination (R2) and 

classical assumption tests. This model is chosen because of its systematic discovery process based on relevant 

theory. The interpretation of using the coefficient of determination (R2) testing is to assess how much of the 

variability of the dependent variable can be explained by the independent variables. The results of this testing 

provide information on the extent to which the independent variables influence the dependent variable in 

this study. The classical assumption tests consist of several tests to examine the basic assumptions that must 

be met in regression analysis. These basic assumptions include normality, multicollinearity, autocorrelation, 

and heteroscedasticity. By conducting these tests, the researcher hopes that the data used in this study meet 

the necessary basic assumptions for conducting regression analysis. This is important to ensure the reliability 

and validity of the research findings obtained through regression analysis. The researcher refers to the study 

by Gunanto (2023), as a reference source in explaining the research methodology and testing that will be 

conducted. 

 

Budgeting (X1): 

Budgeting can be measured using a Likert scale, where respondents are asked to rate their level of 

involvement in the budgeting process. In this case, the rating scale ranges from 1 to 5, with 1 indicating very 

low participation and 5 indicating very high participation. The formula used to calculate the average score 

of budgeting participation is as follows: 

 

Budgeting =
(The total score of all respondents)

(The total number of respondents)
 (1) 

 

Decentralization (X2): 
Decentralization can be measured by collecting data on the level of autonomy and responsibility given 

to local government organizations in decision-making. Researchers can use a Likert scale to assess the degree 

of decentralization within local government organizations. The rating scale can range from 1 to 5, with 1 

indicating low decentralization and 5 indicating high decentralization. The formula used to calculate the 

average decentralization score is as follows: 

 

Decentralization =  
(The total score of all respondents)

(The total number of respondents)
 (2) 

 

Work Motivation (X3): 
Work motivation can be measured using a Likert scale that assesses relevant motivational factors 

such as recognition, involvement in decision-making, and career development opportunities. Respondents 

are asked to rate their level of agreement or disagreement with statements related to work motivation. The 

rating scale used can range from 1 to 5, with 1 indicating low motivation and 5 indicating high motivation. 

The formula used to calculate the average score of work motivation is as follows: 

 

Work Motivation =
(The total score of all respondents)

(The total number of respondents)
 (3) 

 

Organizational Performance (Y): 
In this research, proxies that can be used to measure organizational performance are the percentage 

of target achievement, efficiency ratio, satisfaction score of the community, and the percentage of 



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community complaints resolved for service quality. The selection of these proxies is based on predetermined 

performance indicators and has considered their validity and relevance to the context of the local 

government organization being studied. 

 

Yi = β0 + β1X1i +  β2X2i + ⋯ +  βKXKi + βK+1X(K+1)i + εi (4) 

 
The formula is used to estimate the mean value of the dependent variable (Y) based on the values of 

independent variables (X1 to XK) using a linear equation model. The process of estimating regression 

coefficients is done by minimizing the error (ε) between the observed values of Y and the predicted values 

by the regression model. This also aims to measure the performance of Local Government Organizations 

through the work standards established by regulations in each Government Agency. 

 

Multiple Linear Regression Analysis : 
This formula refers to a linear regression model used to estimate the mean value of the explanatory 

variable based on the values of predictor variables (X1 to XK) in the linear regression between the independent 

and dependent variables. The linear regression model is expressed in equation formulation as follows: 

Y =  β0  + β1 Budgeting +  β2 Decentralization +  β3 Work Motivation +   ε     (5) 

 

In the equation above, Y is the dependent variable that we want to predict, X1 to XK are the 

independent variables used to predict Y, β0 to βK are the regression coefficients to be estimated, and ε is the 

error term representing the difference between the observed values of Y and the predicted values by the 

regression model. The main objective in linear regression is to minimize the error (ε) between the observed 

values of Y and the predicted values by the regression model. This process involves estimating the regression 

coefficients (β0 to βK) that depict the contribution of each independent variable to the dependent variable.  

By obtaining good estimates of the regression coefficients, researchers can use the linear regression 

model to predict the values of the explanatory variable based on the given predictor variable values. In the 

context of this research, the formula depicts the approach used to analyze the relationship between the 

dependent and independent variables through a linear regression model. By minimizing the error between 

the observed and predicted values, readers can gain a better understanding of the influence of the 

independent variables on the dependent variable in this study. 

 

RESULT AND DISCUSSION 

 

In a local government organization, there are criteria used to determine the sample of employees who 

will be the subjects of the research. The process of determining this sample aims to ensure that the research 

can effectively address the research questions. Some criteria used in this study include: 

One of the criteria used is to have a minimum of one year of tenure. This is done to ensure that the 

sampled employees have sufficient experience in the working environment of the local government 

organization. By having a longer tenure, the assessment of employee performance can be done more validly, 

as they have experience covering a longer period of time. Another criterion is employees of the local 

government organization who actively participate in the budgeting process. This is important because 

participation in budgeting can have an influence on employee performance and is also related to government 

financial management. By selecting employees involved in this process, the research findings can analyze 

the impact of budgeting on their performance. Another criterion is employees who have decision-making 

authority in the local government organization, such as department heads, agency heads, section heads, and 

division heads. This is important because their positions hold responsibilities for managing specific parts of 

the organization and making decisions that affect organizational performance. By selecting employees with 

decision-making authority, the research can examine the influence of their decisions on the overall 

performance of the local government organization. 

This means that by using the aforementioned criteria, researchers can determine a sample of 

employees that aligns with the research objectives, ensures representativeness, enhances research validity, 

addresses research questions, facilitates focused analysis, and yields more accurate generalizations. Below 

is the formulation and summary of the questionnaire distribution results via Google Form. 

 



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 μ =
∑ X

N
 (6) 

Where: 

μ : population average 

ΣX : the sum of all the elements in the population 

N : the total number of elements in the population 

 

The formula assumes that the population being calculated has an infinite or very large number of 

elements, making it impractical to directly calculate each individual element. Instead, researchers use ΣX to 

represent the sum of all elements in the population. The value N indicates the total number of elements in 

this infinite population. In practice, when calculating the mean of an infinite population, statisticians often 

use a statistical approach that estimates the mean based on a representative sample from that population. 

This approach allows researchers to make generalizations about the population based on data obtained from 

a smaller sample. By employing inferential statistics, such as confidence intervals, researchers can estimate 

the population mean while accounting for the uncertainty in the estimation. 

 

Table 1. Determination of the Research Sample and Product Moment Correlation 

Local Government Organization  Amount 

LGO Economic  24 

LGO Regional Income  9 

LGO Finance and Regional Assets  21 

LGO SMEs  34 

LGO Pre-Industrial and Trade  43 

LGO Cooperative  50 

Total Sample Contributions  181 

Research Sample Criteria  Amount 

Questionnaire distributed  250 

Returned questionnaire  231 

Unreturned questionnaires  (19) 

Incomplete questionnaire  (7) 

Respondents who do not fit the criteria  (43) 

Questionnaires that can be processed  181 

Classification of Budgeting Predictor Items R-VALUE  R-TABLE 

I understand the budgeting process in the LGO 0.630 0,198 

I actively participate in the budgeting process in the LGO 0.668 0,198 

I receive information about budget policies in the LGO 0.573 0,198 

I have access to data and information in the budgeting process 0.594 0,198 

I am effective in identifying the budget in my work unit 0.542 0,198 

I am able to estimate the allocation of resources for budgeting 0.582 0,198 

I participate in setting targets and performance indicators 0.631 0,198 

The budget control process in the LGO is running smoothly 0.620 0,198 

Classification of Decentralized Predictor Items R-VALUE  R-TABLE 

I understand the concept and objectives of decentralization in the LGO 0.795 0,198 

The LGO provides autonomy in managing resources at the work unit 0.785 0,198 

Policy allocation in the LGO is fair as a result of decentralization 0.761 0,198 

Decentralization has increased participation 0.770 0,198 

Classification of Work Motivation Predictor Items R-VALUE  R-TABLE 

I provide necessary information in the government context 0.702 0,198 

I am driven to enhance my skills in the public sector 0.665 0,198 

I am motivated to behave transparently while on government duty 0.764 0,198 

I have improved the quality and effectiveness of public services 0.681 0,198 

I am motivated to provide the best public service 0.694 0,198 

Classification of LGO Performance Explanatory Items R-VALUE R-TABLE 

Colleagues or the community served in the government 0.656 0,198 

Clear understanding of the goals and values upheld 0.616 0,198 

Practicing honesty and integrity in government 0.821 0,198 

The government organization provides supportive policies 0.776 0,198 

Work and personal life in government organizations 0.800 0,198 

Sources: the data is processed, researchers from IBM SPSS Statistics version 25.0. and via Google form 



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researchers 2023 

 

In this study, there are 181 questionnaires that can be processed as samples based on the pre-

established criteria. Sample selection is conducted to choose a subset that represents a larger population with 

the aim of ensuring the validity and generalizability of the research results. The number of processable 

questionnaires reflects the sample size to be analyzed, and further analysis of these questionnaires will be 

conducted using appropriate statistical methods. Therefore, the selection of 181 questionnaires is a crucial 

step in this research to address the predefined research issues, from each local government organization 

outlined in Table 1 above. 

Bivariate Pearson, according to Wampler et al. (2021), is a statistical technique used to measure the 

strength of the relationship between two measurable quantitative variables. This method utilizes the Pearson 
correlation coefficient (r) to evaluate the strength and direction of the relationship between the two variables 

by comparing the calculated r-VALUE with the critical r-VALUE. If the calculated r-VALUE (for each item, refer to the 

result of the product-moment correlation calculation in the Pearson correlation column) exceeds the critical value, it 

indicates a significant relationship. The obtained r-VALUE is shown in Table 2 below, based on the SPSS 

output. 

Based on the data in the table above, it can be concluded that the obtained r-VALUE for all items in the 

predictor variables is greater than the critical r-VALUE of 0.198. This indicates that all the questionnaire items 

used to measure the predictor variables have been well tested and are considered to meet the validity 

requirements. Furthermore, it can also be concluded that the obtained r-VALUE for all items in the explanatory 

variable is greater than the critical r-VALUE of 0.198. This suggests that all the questionnaire items used to 

measure the performance of local government organizations have been well tested and are considered to 

meet the validity requirements.  

The reliability value in this research refers to the level of consistency or reliability of a measurement 

instrument in measuring a specific construct or phenomenon. In this study, as shown in the table above, the 

reliability of the measurement instrument should have a sufficiently high correlation value. A questionnaire 

is considered reliable when respondents' answers are consistent, as calculated by the Cronbach's alpha 

statistical analysis. Cronbach's alpha coefficient measures the correlation between all pairs of question items 

within the measurement instrument. This coefficient is then used to calculate the internal reliability of the 

measurement instrument, with an alpha value > 0.70 indicating higher internal reliability. The higher the 

alpha value obtained, the higher the internal reliability of the measurement instrument. 

 

Table 2. Cronbach's Alpha 

Variable Cronbach's Alpha Standard 

Budgeting Predictor 0.737 0.60 

Decentralization Predictors 0.804 0.60 

Work Motivation Predictors  0.789 0.60 

Explanation of the Performance of Local Government Organizations 0.846 0.60 

Sources: the data is processed, researchers from IBM SPSS Statistics version 25.0. 

 

The results of the reliability test indicate that the instruments used in this research to measure the 

variables of budgeting, decentralization, work motivation, and the performance of local government 

organizations are deemed reliable. The Cronbach's alpha values for each variable are >0.60, indicating a 

good level of consistency in the instruments. Thus, the results of the reliability test prove that all the 

instruments in this research are reliable and have a high consistency in measuring the variables under 

investigation. 

Based on the data in the below table, there are two variables analyzed, including budgeting, 

decentralization, and work motivation as predictor variables, and the performance of the Local Government 

Organization as the explanatory variable. The tested model intercept has met and represents the classic 

assumption criteria. This can be observed from the value of Asymp. Sig. (2-tailed) which is 0.221 > α (0.05). 

Thus, it can be assumed that the time in the dataset has a normal distribution range, and there are no 

significant issues related to the variables used. Furthermore, regarding the fulfillment of the classical 

assumption of Durbin-Watson, a value of 3.742 is obtained, exceeding the value of 2 for the intercept scale 

of 0 and 4, after the model is adjusted for temporal data transformation. This indicates that there is no 

significant autocorrelation in the residual regression model. Meanwhile, in meeting the classical assumption 

of the variance inflation factor, a value of 1.322 is obtained for the independent variables. This indicates that 

there is no significant multicollinearity problem with the predictor variables, as the variance inflation factor 

value around 1 shows that the variables are independent and not significantly correlated with each other. 



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Table 3. Interpretation of Research Results  

Predictor and Explanatory Models Minimal Maximal μ σ 

Budgeting Predictor 58.0 634.0 213.622 21.6576 

Decentralization Predictors 71.0 690.0 198.007 27.2209 

Work Motivation Predictors  66.0 701.0 201.779 30.1421 

Explanation of the Performance of 

Local Government organizations 
67.0 773.0 303.681 25.2722 

Valid N (listwise) 181    

Representation of the Classical Assumptions 
Intercept 

Model 

Asymp. Sig. (2-tailed)    0.221c 

Durbin Watson              3.742 

Variance Inflation Factor              1.322 

Adjusted R2               0.794 

F-value            30.205 

p-value of F-value                0.001b 

Coefficientsa β Std. Error t-value α 

Constant 310.191 45.571   

Budgeting Predictor 2.214 1.765 3.002 0.003* 

Decentralization Predictors 1.987 0.809 1.871 0.004* 

Work Motivation Predictors  2.098 1.801 2.074 0.000* 

a. Dependent Variable: Performance of Local Government Organizations  

The distribution test shows that the data follows a normal distribution, calculated using Lilliefors 

Significance Correction. Predictors: (Constant), Budgeting, Decentralization, and Work Motivation.  

Note: *; ** indicates significance at 1% and 5% levels. 

Sources: the data is processed, researchers from IBM SPSS Statistics version 25.0. 

 
In this study, there is also an Adjusted R2 value of 0.794, an F-VALUE of 30.205, and a p-VALUE of the F-

TEST of 0.001. Therefore, based on these analysis results, it can be interpreted that 79.4 % of the variance can 

be explained by the predictor variables used in the model, while the remaining 20.6 % is presumed to be 

influenced by other factors outside the scope of the study. Furthermore, the F-VALUE of 30.205 and the p-

VALUE of the F-TEST of 0.001 suggest that the regression model used in this study has a significant contribution 

in explaining the variance of the data. Additionally, the predictor variables simultaneously have a significant 

influence on the explanatory variable based on the low F-VALUE and p-VALUE of the F-TEST. 

In statistical testing analysis, the t-VALUE is used to test the significance or importance of the 

relationship between the variables under study. This t-VALUE is then compared to a predetermined significance 

level. In the findings of this research, for the budgeting variable, the obtained t-VALUE is 3.002 with a 

significance level of 0.003. This value indicates that there is a significant relationship between budgeting and 

the performance of the local government organization. Furthermore, for the decentralization variable, the 

obtained t-VALUE is 1.871 with a significance level of 0.004. This result suggests that there is a significant 

relationship between decentralization and the performance of the local government organization. 

Meanwhile, for the work motivation variable, the obtained t-VALUE is 2.074 with a significance level of 0.000. 

This result indicates that there is a highly significant relationship between work motivation and the 

performance of the local government organization. 

Then, there are results that show the regression coefficients (β) and standard errors for each variable. 

These results are interpreted as follows: The regression coefficient (β) for the constant variable is 310.191 

with a standard error of 45.571. This constant indicates the estimated value of the performance of the local 

government organization when all independent variables are zero. Furthermore, the budgeting variable has 

a regression coefficient (β) of 2.214 with a standard error of 1.765. This means that for every one unit increase 

in the budgeting variable, there is an associated increase of approximately 2.214 units in the performance of 

the local government organization, with an uncertainty level of about 1.765. The decentralization variable 

has a regression coefficient (β) of 1.987 with a standard error of 0.809. This indicates that for every one unit 

increase in the decentralization variable, there is an associated increase of approximately 1.987 units in the 

performance of the local government organization, with an uncertainty level of about 0.809. Lastly, the work 

motivation variable has a regression coefficient (β) of 2.098 with a standard error of 1.801. This indicates 

that for every one unit increase in the work motivation variable, there is an associated increase of 



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approximately 2.098 units in the performance of the local government organization, with an uncertainty 

level of about 1.801. 

This analysis result shows that the variables of budgeting, decentralization, and work motivation 

significantly contribute to the performance of the local government organization. The positive regression 

coefficients indicate a positive relationship between the independent variables and the dependent variable. 

Therefore, this multiple regression analysis provides a more detailed understanding, and by considering the 

regression coefficients and the level of uncertainty, we can draw more accurate conclusions about the extent 

to which these variables play a role in shaping the performance of the local government organization. 

 

Discussions 

Overall, these findings provide empirical evidence that participatory budgeting, effective 

implementation of decentralization, and improved work motivation of employees play a crucial role in 

enhancing the performance of local government organizations. By considering and implementing these 

findings, local management and policy decision-makers within the government organizations can adopt 

effective strategies to improve organizational performance and deliver better public services to the 

community. The detailed results of these findings are outlined as follows: 

Participatory budgeting, as the findings indicate, has a positive and significant influence on the 

performance of local government organizations. The evidence for this influence is supported by the obtained 

t-VALUE of 3.002 with a significance level of 0.003 < 0.05. This means that by implementing a participatory 

approach in the budgeting process, employees will feel more involved and have a greater sense of 

responsibility towards their work outcomes. This supports the findings from studies conducted by Birskyte 

(2019), Krueger and Park (2020), Panday and Chowdhury (2020), Johnson et al. (2021), Muthomi and 

Thurmaier (2021), Jung (2023), Manes et al. (2023), Martínez (2023), Murray et al. (2023) and Singla et al. 

(2023), which state that employee involvement in budgeting can enhance motivation, job satisfaction, and 

overall performance within an organization. 

Effective implementation of decentralization, as the findings also indicate, positively and significantly 

contributes to the performance of local government organizations. The evidence for this contribution is 

supported by the obtained t-VALUE of 1.871 with a significance level of 0.004 < 0.05. This means that by 

granting greater authority and responsibility to local units in decision-making and resource management, 

decentralization can encourage innovation, efficiency, and better responsiveness to the needs of the 

community. This supports the findings from studies conducted by Anthony (2022) and Hutahaean and 

Pasaribu (2022), which mention that in the context of government organizations, effective implementation 

of decentralization can improve the performance of local government organizations and provide better 

public services. 

Improving employee work motivation, where the variable of work motivation has also been proven 

to have a positive and significant influence on the performance of local government organizations. The 

evidence for this influence is supported by the obtained t-VALUE of 2.074 with a significance level of 0.000 < 

0.05. This means that in efforts to enhance performance, it is important to pay attention to factors that can 

increase employee work motivation, such as recognition, rewards, career development, and creating a 

conducive work environment. This supports the findings from studies conducted by Astuti et al. (2020), Kao 

et al. (2023) and Zampetakis (2023), which state that by strengthening employee work motivation, 

government organizations can create a more productive work environment and contribute to overall 

performance improvement. 

Based on the statement, it can be concluded that the findings of this research have important 

implications in the context of government organizations. Participatory budgeting, effective implementation 

of decentralization, and improving employee work motivation have a significant impact on the performance 

of local government organizations. Regarding participatory budgeting, involving employees in the budget 

decision-making process can enhance their sense of ownership, motivation, and responsibility towards 

organizational performance. This aligns with the theory of participation in public management, which 

suggests that employee participation in decision-making processes can create a more responsive 

organizational climate and improve the quality of decisions. 

The concept of decentralization also has a strong theoretical foundation in public management. 

Effective decentralization allows local units within government organizations to make more adaptive 

decisions and bring public services closer to the community. The theory of decentralization emphasizes the 

importance of delegating authority and responsibility to lower levels in the organizational hierarchy to 

enhance efficiency, innovation, and accountability. Furthermore, the theory of work motivation has long 

been a focus of research in the fields of psychology and human resource management. Previous studies have 

shown that high employee motivation can have a positive impact on both individual and organizational 

performance. Concepts such as motivation theories like intrinsic and extrinsic motivation, expectancy 



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99 

 

theory, and human needs theory provide an understanding of factors that can enhance work motivation and 

its impact on organizational performance. 

By combining these theoretical foundations, the findings of this research provide a more detailed and 

logical understanding of how participatory budgeting, effective implementation of decentralization, and 

improved employee work motivation can contribute to enhancing the performance of local government 

organizations. The implications of these findings are that management and decision-makers in government 

organizations need to pay attention to and implement these strategies to achieve organizational goals more 

effectively and efficiently. 

CONCLUSION 
 

Based on the findings of this research, it can be concluded that participatory budgeting, effective 

implementation of decentralization, and improved employee work motivation play a significant role in 

enhancing the performance of local government organizations. These findings demonstrate that involving 

employees in the budgeting process can enhance motivation, job satisfaction, and overall performance 

within the organization. Additionally, granting greater authority to local units in decision-making and 

resource management can encourage innovation, efficiency, and better responsiveness in public services. 

Furthermore, improving employee work motivation through recognition, rewards, and creating a conducive 

work environment can enhance the overall organizational performance. The implications of these findings 

highlight the importance of local management leadership and policy decision-makers in government 

organizations to pay attention to and implement strategies to improve organizational performance and 

provide better public services to the community. 

Generalization, this research was conducted in a local government organization in a specific region, 

so the results may not be directly extrapolated to other government organizations in different locations or 

contexts. The measurement of variables in this study was done using a questionnaire method, which might 

be susceptible to subjective bias. Additionally, there is the potential for measurement errors that could impact 

the research results. Recommendations for future research include study replication. It is suggested to 

conduct a similar study with a larger population and sample in different locations to validate these findings 

and achieve broader generalization. The use of more objective measurement methods, such as observation 

or document analysis, can reduce the potential for subjective bias in data collection. Further research could 

explore other factors that may influence the performance of local government organizations, such as 

organizational culture, leadership, or organizational support. Additionally, the analysis should consider 

additional factors such as geopolitical uncertainty, technological changes, climate and environmental 

changes, economic inequality, and global financial crises. All these factors can impact the continuously 

evolving global economic conditions, increasing the likelihood of economic crisis situations. Using more 

sophisticated statistical analysis methods such as path analysis or multilevel analysis can provide deeper 

insights. 

 

 

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