ABSTRACT
Of all the forces in an organization working upon a budget system the communication between a budgetee and his boss is the most crucial to the functioning of the system, both for its motivation and for its job satisfaction outputs. Contacts between superiors and subordinates contain an element of communication and one of power; for daily operations the first one is more important than the second. The boss in his turn depends on his superior, so there is a vertical flow of ideas through an organization, but this vertical flow is modified by the ‘umbrella function’ of middle managers.
The way superior-subordinate communication influences budget motivation and job satisfaction is through:
Frequent person-to-person contacts about results
The use of results in performance appraisal
The use of department meetings
The creation of a game spirit.
The first two items refer to contacts with individual employees. They increase motivation but also a feeling of pressure. There is the possibility that they disrupt teamwork and lead to undesirable effects like scapegoating and fighting the system.
248The second two items represent group leadership. They have positive effects on motivation and job satisfaction, although department meetings in themselves do not increase budget relevance. The game spirit offers the most favorable mix of motivation and a positive job satisfaction effect. It represents motivation of the budgetee from within, not through outside pressure. The game spirit depends strongly upon the leadership skill of the budgetee’s superior and how well he exercises his ‘umbrella function’ . It is easier to realize in smaller companies and in companies of which the parts are less technologically interdependent. For the larger companies a conscious effort of creating scope for the game spirit is desirable. Statistical techniques like the use of control limits known from quality control are recommended for this purpose.
