IMPACT OF BUDGET VARIANCE, EVALUATION AND REWARDS ON MANAGERIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN LAGOS STATE

Mubaraq Sanni

Abstract

The major crisis in the Nigerian banking sector during the past regime can be traced to wrong
applications of budgeting by the management of the affected banks. Notwithstanding, budgeting
has contributed in diverse ways to the success of many organisations. This study investigated the
effect of budget variance, evaluation and reward on managerial performance of commercial banks
(now referred to as deposit money banks-DMBs) in Lagos State. The population of the study
consisted of all deposit money banks in Lagos State. The sample size was determined using purposive
sampling technique. The study used primary data and the data was collected through
questionnaires. The data was analysed using descriptive statistics and regression analysis. Findings
indicated that only reward has significant positive effect on managerial performance (â=0.810,
p<0.05), while the effect of evaluation and budget variance on managerial performance is not
significant (â=0.245, p>0.05) and (â=0.069, p>0.05) respectively. It is thereby, recommended that
budget variance should not be used by organisations as a basis to pass blame on managers for any
adverse variance, as this could discourage managers and negatively affect their productivity. It is also
recommended that more emphases should be placed on budget reward for good performance.