There are generally three benefits from allowing employees to participate in developing the budget:
(1) Employees tend to accept the budget as their own plan of action.
(2) Participation tends to increase morale among employees and toward management.
(3) Employee cohesiveness is increased, and productivity will also increase if dictated by the group norm.” Based on this quote state whether you either agree or disagree with the comment and support your opinion.
Budgeting
It is true, and I agree that some benefits are yielded from the participation of the employees in the development of the budget. Budgeting is the process through which quantitative and monetary terms are laid down. It decides on what and how something has to be done in a predefined period. It is a type of action plan for the future, which also provides a yardstick for the measurement of the performance. The main aim of budgeting is to lay down a plan for implementation of the organizational policy, coordinate these activities with all sections of the organization and to control each of the functions to achieve the desired results. For making the budgeting process a success, it is vital to include all those participants in the development phase, which are going to be a part of the implementation phase of the budget. When these employees are setting up their targets themselves, then they feel more committed to these targets and are more obliged to achieve it. The level of commitment can be lower for the ones which were not involved in the developing phase (Sukandani & Istikhoroh, 2016).
I agree that the benefit of a participative budget is that it increases the morale of the employees. It would create a sense of belongingness and elation as they are consulted in the development process of the budget. This type of budgeting would also help consideration of the group norms. Furthermore, the process would also aid in making the targets of the budget as the group norms.
I also agree with the statement that the cohesiveness of the workers would increase as well. As per the scholars, budgets are means of coordination of the business. The interdependency of the functional budgets ensures that one budget cannot be completed without having reference to the other budgets (Sukandani & Istikhoroh, 2016).
References
Sukandani, Y., & Istikhoroh, S. (2016). Participatory Budgeting Role in Improving the Performance of Managerial Head of Department East Java. Review of European Studies, 8(4), 148-157.
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