Budget and Motivation
Category : Budget Process Essays, Manager Employee Relationship
Cross-training can be done horizontally, upward and downward. It is against human nature to remain static making job enrichment like cross-training beneficial to the human resource aspect of the firm. It is a form of motivation because it offers career development opportunity (personal) as well as promotes corporate loyalty (organizational). However, the benefits of reducing the trade-offs between personal and organizational needs would be limited by the budget level of the firm for productivity loss in training. This excludes the actual cost of training like seminars.
Without enough budget appropriated to lost opportunities especially on the financial aspect, the firm tend to implement cross-training programs infrequently. However, the less frequent it is, the bigger the tendency for employees to see themselves as a mechanical robot within the waiting time. This may lead to reduced motivation as their worth and consequently self-esteem are strictly bounded on a 3-year assembly line responsibility. The firm, on the other hand, cannot develop a formal cross-training schedule like a monthly enrichment due to a performance target. In the early years of Ford Corporation, Founder and CEO Henry Ford made an assembly line where employees would work for a single task for the rest of the day. Good thing that the firm had money to increase incentives for the employees. At the end, budget for either cross-training or substitute for cross-training like incentives matters.
Without training, the ability factor in job performance would be static at least for those contributions coming from the firm. The production manager will come and ask the assembly line how to minimize defects or conversely announce policies of doing so. With insufficient and poorly identified training budget, imparting knowledge or following line procedures will be limited to intrinsic abilities of employees. And since heuristic applications to difficult situations tend to be strong under time pressure or coercion, subjective and individual approach to the problem at hand will be used as a main tool. This in turn is likely to deviate from the corporate goals on the average which is not the best interest of the established corporate programs.
Applying the concept of hygiene and motivation theory, the motivational side of performance requires relatively bigger attention from a training budget. Even though there is supervision, managerial-employee relationship, working environment and salary (animal needs), Herzberg referred to them to fall short of human needs. The satisfaction and recognition (human needs) staffs receive is derivable in advancement mechanisms being provided by the firm. In cross-training, people can receive supervision and inter-department relations as well as progress in their knowledge about the whole assembly line. The sense of responsibility is important in this theory that cross-training can provide to an employee. This is especially true when one is exposed in the whole assembly line process where he can develop concern for the next batch. Thus, this can positively impact how fast and reliable he does his part of the line.
In the Public Sector
The budget serves as the major weapon of the public to instill responsibility and accountability among politicians. This somewhat drives public servants to avoid, if not hide, their deviations from such expectations as it could mean public speculation that if proven can result to ouster or election defeat. On the other end, at times of perceived short budget, they could resort to receive “grease money” from sectors/ businesses/ entities where intentions are primarily on public use. However, the latter statement is prone to public speculation and legal counteraction even under the shadow of good deed. Nonetheless, the given public budget confronted by politicians suggests how they would handle the risk and returns of filling the gap of the budget against their tenure goals. The motivation comes from personal interests initially, but ultimately, results to embody political aspirations for their constituents.
Applying the four causes of Aristotle, the final cause tends to be the ends in which politicians are measured. Since it is unlikely on the average that they will resort to robbery to obtain the right budget, “grease” money especially from the business sector is a very lucrative source of financing. The motivation to do so which substantially deviate from honesty virtues has been enforced by public expectation lingered when the candidate announced his formal cause. To make him efficient and moving cause, he should accept trade-offs between doing the right and wrong or returns and risks. He can obtain or at least confident to meet the end he designed in pre-election campaigns.
Using budget outsourcing at times of recession makes politician trustworthy and dishonest as well as situational and relative heroes. They become vigilant in the process in both environmental scanning for greener industries and internally generating strategies that will connect them to their budget needs. Strategies include increasing registration and renewal fees, under-the-table settlements, front-up subsidy in favor of tax rate increase, among others. It motivates his inner circle political organization to remain in continues communication and efficient transactions to avoid being caught by the media or public. Also, his office would remain collaborative with all the sectors of community not only to scan public opinions and speculations but also to identify opportunities to increase the budget.
Thus, the rule-based category of trust in which promises should not deviated results is worked by corruption strategies. Of course, societal concern should be bigger than personal motives. Here, corruption’s wicked meaning is transformed into an acceptable one when translated as efficient corruption. This is so because the excess of one sector of the community can be diverted to the less fortunate through political intermediaries. Resources that should be turned into investments by a private firm is delayed as to obtain sector balance, of say, farmers. Thus, a minimal budget can be optimized in favor of community goals through political manipulation. In effect, entrepreneurship and decision-making capabilities including values of political leaders are challenged. Such motivation would likely not happen if budget is in appropriate level.
The Concentration of Budget
Bottlenecks in Allocating Budgets
Applying managerial motives of the firm theory, managers cannot obtain their self-vested interest as well as those of the firm without a hefty budget to implement acquisition and other diversification strategies. Without minimization of agent risk to job loss or maximization of compensation, managerial motivation would collapse. On the other hand, such mentioned strategies require physical, financial and organizational resources that may have complex consequences. Expansion is a major corporate restructuring which entails strategic actions/ responses. Being so, when implemented, reversing the strategy would be very costly and has long-term adverse effects. Without budget to support managerial entrepreneurship and leadership including their market value, they would feel unchallenged and less well-off than peers in other companies. Turn-over and internal corruption would tend to be seen as worthwhile options.
Departmental networks also often argue about appropriation of annual budgets for their specific causes. When budgets fail to meet expectations of such units, it may result to reduced motivation and even firm rebellion particularly against the finance division. For instance, a cut budget due to conservation endeavors by the firm may hurt the annual targets of the marketing and sales department to be able to get their productivity bonuses. On the other hand, manufacturing department may develop envy from the same unit due to higher budget of the latter due to intensified customer focus for year. The perceived excessive budget could have been used to buy new machineries or train new employees. These intra- and inter-unit bottlenecks that stemmed in budget allocation have also their impact to unit, relational and overall performance.
Applying performance budgeting to these instances can mitigate the destructive speculation of excessive/ meager budget allocations. Managers will be periodically audited in the post-expansion implementation to identify discrepancies from the original shareholder promises. In the same manner, departments who feel aggrieved will be provided with performance targets within the capacity of their budget level. Since this budgeting system is result-oriented, it should be coupled with ethical committee oversight to regulate unacceptable level of immorality to obtain intended results. Allocation of the budget and selecting the appropriate model should be inferred in firm specific aspects in order to identify motivational points.
In this process, the level of budget is undermined in favor of value-creating results it can offer to the organization after implementation of the strategy. The rules of the game are more important than the competencies of the team (firm) in this case. Even though that the probability of losing is over 70%, the team manager only expects his players to do their best to beat an unbeatable opponent. By doing so, employee motivation will meet its target no matter how much departmental budgets are. Managers, on the other hand, will enhance their strategic decision-making motivation with increased accountability. In effect, the whole organization will have a culture of meeting calculated expectations based on budget limits. Incentives can increase the boundaries of such approach that will reward performance that exceed a certain level or performance that surpass an operational difficulty and still obtain its goal.
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