Effective Budgeting

Effective Budgeting

Criteria for Effective Budgeting

There are different types of budgets suited to a myriad unique business and Human Resource Management needs. Each separate budget type has distinctive characteristics and capabilities. For instance, a program budget focuses on allocating funds for programming and projects, for example, employee orientation or attendance at a job fair, while an operating budget manages production of goods and/or services. Although all types of budgets are unique, they share some fundamental properties.

In your text, the authors identify (p. 3) five criteria that must be met in any effective budget:

Predictive ability

Clear channels of communication, authority, and responsibility

Accounting-generated, accurate, reliable, and timely information

Compatibility and understandability of information

Support at all levels of the organization: upper, middle, and lower

Consider these criteria as you review your Resources this week. Try to identify how the information presented in the chapters pertains to at least one of the criteria in a concrete, applicable way with a focus on the activities within the Human Resource Department. Think about how different types of organizations address the criteria in unique ways with budgets that are particular to their needs and goals. Consider the variety of industries and sizes of firms.

To prepare for this Discussion, reflect on the budgetary methods of organizations with which you are familiar and if appropriate, explore within the HR sub-function including issues such as training, staffing, rewards and employee development. You will use the five criteria and the corresponding information you found in subsequent chapters and your own research to evaluate the budgetary methods you have observed.

Now Post by Day 3 a cohesive response that addresses the following:

Describe budgeting processes and types you have observed or used. If you have not directly been part of these processes, outline a process you would envision would be effective for an organization and/or in a Human Resource management context. This process could include the specific budget types that would be used and why those particular types are important, who would be involved in the process, what types of goals should be developed, and/or who would be responsible for administering the budget.

For each of the five areas required for effective budgeting listed above, address the following:

How have you seen these evidenced in an organization and/or within a Human Resource management context? For example, you might focus your response on staffing, development or rewards.

What potential strengths or weaknesses have you observed or would you watch for (based on your readings, research, and experience)?

What are some of the potential consequences for an HR department’s initiatives when the organization does not have an effective budgeting process? Please be specific in your response.

 

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