Question

Budgets need to be fair and attainable for employees to consider the budget important in their normal daily activities. Which of the following situations will not lead to human behavior problems a. Setting goals among managers that conflict with one another.
b. Setting goals too tightly making it difficult to meet performance expectation.
c. Allowing employees the opportunity to be a part of the budget process.
d. Allowing goals to be so low that employees develop a "spend it or lose it" attitude.

Answer 1

Answer:

c. Allowing employees the opportunity to be a part of the budget process.

Explanation:

A budget is a plan on how a business will attain its profits objectives. It shows how a firm will allocate its scarce resources to various units to achieve its overall goals. A budget can be prepared on a bottom-up basis where each department sets its targets under the guidance of top management. The top management can also prepare the budget and pass it down to various units for implementation.

When a budget is prepared from bottom to top, employees get involved in the process. It makes them own the document and its objectives. The employees will feel motivated to work as a team to meet their targets.  A budget indicates the direction where the business is heading. If employees are involved in the budgeting process, they will help management to steer the company in the intended direction.