BUS 630 Budgets and Employee Morale

Budgets and Employee Morale

Ashford University – BUS630

Budgets and Employee Morale

Budgets do play an intruigal part of an employee’s life in the workforce. As stated in the

video, budgets can control the employee’s pay, whether they get a raise, and whether they can

keep their job. The people who create the budget decide what goes into the budget and what has

to be cut, whether it is cut back or cut out completely. These budget items do affect the

employee’s morale, especially if the employee sees budget cuts that may affect his/her job or

their pay. End of year pay raises are affected by the way the company meets or exceeds their

budget. If the budget is not met then the employees will suffer. This does lead to a decrease in

employee morale. My husband’s company did very well for the 2014 year but was still unable to

produce good raises at the end of the year, regardless of the hard work from the employee and

regardless of how well the company succeeded and made a great profit. What the company did

instead was they bought out another company to convert over into their own. They needed the

extra money to do this buy out and to have money to make these sites their own with their

branding and their materials and to train their people. Current employees were very hurt and

disgusted at the fact that their raise suffered at the end of the year, regardless of beating the

budget, so that the company could buy out another company. Then the company sends a

company-wide email telling their employees how they just spent millions to purchase the old

company and transition those sites into their own. This obviously did not sit well and still does

not sit well with the employees nation-wide. Most employees would react in a similar way to

similar news because they do put time into the company and are committed to the company to

hear that regardless of what they have put into the company, the decision making board members

or managers will do what it thinks is best for the company.

My previous employer was in the process of transitioning from a local Human Resource

Manager in each store to having a regional Human Resource Manager that would travel around

to different stores in their district. This was due to budget cuts and finding out that each store did

not need to have a Human Resource Manager located at their store every day. We began to only

see the Human Resource Manager weekly and then monthly until it was only when new training

material needed to be presented or when new hires were brought on. It is clear to see why the

company decided to go this route because it would save a lot of money and man hours to have

one Human Resource Manager per 10 or 12 stores. It makes good business sense. By using

budgeting methods the company is able to see that they are spending too much money by having

10 to 12 Human Resource Managers who may not be utilized to their fullest due to the lack of

Human Resource issues at their sites. It makes sense to cut 9 to 11 people off of the budget and

place that money elsewhere in the budget. I do believe the budget was effectively applied. I

understand that 9 to 11 people had to be moved around or given a good package for leaving. It

did make sense to incorporate this into the budget and to free up more money for other needs the

company has. From the employee’s view, though, it did not seem like a fair deal to them. We

no longer had a Human Resource Manager to go to whenever we needed to discuss training,

benefits, time-off, etc. We had to call our Human Resource Manager, leave a message, and hope

that he returned the call in a timely manner. It set him up to be bombarded with employees when

he did come around to our store for the day. If he had to conduct interviews or training, then the

employees would have to wait until he had a free moment. If you did not see him that day then it

could easily be a month before anyone saw him again. This affected the employees in a big way.

But, it made perfect business sense for the company to control the budget in this manner on this