Not for the boss but for the employees.
set the amount of the bonus as a percentage of the amount under budget.
I had a manager who didn't order supplies for an entire quarter and they gave her a promotion for it. The next manager had to order all those supplies and got in trouble for going over budget. That kind of foolery shouldn't be allowed.
Comments (5)
The boss is the one responsible for reducing spending, but doesn't get the reward?
If you read my comment the boss was guilty of not doing her job and thereby reducing spending. The next manager did her job and got censured because the first thing she had to do was buy up all the stuff the previous manager hadn't bought.
On the other hand if the manager is one of the employees she gets a share of the bonus.
The way the government works is there is no benefit for being under budget in fact if you are under budget it may be an excuse to reduce your budget in the next year.
This is a great idea in business, but in government improving the bottom line is not always the main point. For example, Social Security could come in under budget by withholding checks. Is this really something we should incentivize in public service?
All you have to do is give them an incentive to come in under budget while doing the job. If you withheld checks you could perhaps come in under budget but get fired for not doing the job.
But there are ways to come in under budget that they aren't going to do if the budget itself is likely to be reduced.
The most important reward for these organizations is getting their budget needs met or increased in the future.
Also, the budget problem here is arbitrary. If an organization is under-budgeted for its expectations, it won't meet one of either its expectations or its budget. There was a Dilbert cartoon about how Dilbert was rewarded for coming in under-budget because his project was canceled. He met both because they "over-budgeted" a project that was going to be canceled.