Question

when Do Organization Use the Carrot or Stick Approach to Budget Management?

Answer 1

The organization can use the Carrot or Stick Approach to Budget Management to motivate the employees for their better job performance. If the employees are giving good performance and adhering with budget in that case they will get rewards so that they will be encouraged to perform good in future also (carrot approach). Similarly if they are not performing well then they will get warning or punishment for their poor performance in that case they will try their best to improve the performance in future (stick approach). For organizations it is important to rewarding for the good performance so that other employees will be encouraged to follow the same behavior in future.