Shortfalls of using budgets for Performance evaluation of staffs
1) Discouragement
It may be the chances that the budget process is not a pleasant experience,
so it has the potential to discourage staff. Moreover the standard set in the
budget may be unrealistic or too optimistic .As the budgets are normally
prepared by senior level management based on their own assumption , so it
might not suit the lower level management and may discourage their
performance . (Freedman, 2019)
2) Changes in government rules and regulation may require immediate
changes or review of budget which in turn cost more time and money.
3) Inconsistent Message
As we all struggle with memory as we are busy as so it becomes critical to
document issues (both positive and negative) when it is fresh in our minds.
But managers usually does not keep notes and accurate records of employee
behavior, thus may not be successful in sending a consistent message to the
employee leading to bad preparation and allocation of budgeted task.
4) Wrong Use of Past Trends
Budgets are usually prepared from past dates and trends of staff
performances , but if the data are not analysed efficiently and correctly then
it may cause wrong performance evaluation of staffs.
5) Not much participation from staff members :
As the budget usually defines a particular process of doing a particular job
and the time limit within which a job should get completed , hence lower level
managers and staffs are not interested in adding any comment to the
budget. Moreover ,sometimes high level managers ignore the fact of
participation by the staffs.
6) Time Consuming
It is recommended that a manager spend about an hour per employee writing
performance appraisals and depending on the number of people being
evaluated, it can take hours to write the department’s PA but also hours
meeting with staff to review the PA. On the basis of this , budgets are usually
prepared and task allocation is done , hence the it is too time consuming.

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Shortfalls of using budgets for Performance evaluation of staffs

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