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2. Zero-based budgeting, unlike most budgeting approaches, reverses process of traditional budgeting. In traditional budgeting, the agency or department needs only to justify budget changes from year to year. Significant increases or decreases in the budget are questioned, but each year's budget builds off of the last. This method assumes that the budget baseline, or average, is always automatically approved. However, zero-based budgeting requires that every line item of an agency's budget must be outlined individually and approved each year. In other words, the government must build a budget from the ground up, starting at zero. Changing to this system of budgeting can be time consuming and costly based on who long the agency or department has been using traditional incremental budgeting. During the review process of zero-based budgets, no reference is made to previous expenditures for the same product, service or task. Rather, each year is approached as if it were a clean slate. Zero-based budgets require that the evaluation process be completed very thoroughly, as there is no baseline or track-record to refer to. Zero-based budgets were particularly popular in the 1970s, but have resurfaced as of lately due to the country's current economic constraints. The important thing to note about this form of budgeting is that, though it reduces the chances of an overinflated budget due to yearly marginal increases, it also causes agencies or departments to argue or justify their need for funding. This can be difficult for government agencies that work primarily in research. It also would be difficult for departments of agencies that strive to prevent harm. It is difficult to justify what difference a department has made when the only argument is what could have happened otherwise.
3. Target based budgets are budgets that are assigned to particular programs or departments. Whereas zero-based budgets eliminate the practice of assuming there is an approved baseline budget, target-based budgets build off of the baseline. Target based budgets are budgets that are created to outline a specific target spending limit for a particular initiative. Each department or program is given a target spending limit and must submit a budget within that limit. Whatever the agency or department aims to achieve must all fall within the specified dollar amount. The agency may submit request for an increase in budget. This is referred to as a "decision package". Decision packages are not used to decrease or cutback spending under this system of budgeting. Once all decision packages are received, they are ranked according to how closely they align with the specific agency's objectives. They are also ranked according to the submitting agency and the budget authority evaluating the submissions. These rankings will ultimately determine which decision packages are added to the target budget amount to create a proposed budget. Target based budgets are more conscious of current zero-based budget revenue. Zero-based budgets start by planning a budget from nothing. This practice could easily lead to somewhat unrealistic expectations for what the budgeting authority is able to approve. Whereas, target based budgeting is familiar with the previous fiscal year budget and sets a target spending limit that is understood to be fair for what the department of agency hopes to achieve.
4. Management-by-objectives is the process by which objectives are defined in an organization such that employees and management agree to the objectives, and both parties recognize their respective roles in achieving them. The defining factor of management by objectives is the shared development of goals. Under management by objectives, an employee's performance is measured by comparing his/her performance to the agreed upon goals. If an employee's input is taken into consideration when creating performance standards, the employee will be more active in pursuing organizational objectives. Since employees were involved in the creation of the objectives, they are more able to see how their part fits into the overall objective of the organization. Management by objectives motivates employees by including them in decision making and goal creation which brings about a sense of responsibility to meeting and exceeding those goals. Management by objectives also facilitates communication between management and staff by frequent interactions between superiors and subordinates. This not only creates a harmonious work environment, but it also promotes a feeling of confidence in management. Employees feels that their superiors care what they think and how they perform, therefore staff members are more likely to voice their concerns to management when they feel the positive work environment may be jeopardized in some way. Employees are also more eager to continue to give input and feedback that could assist in further advancement for the organization as a whole. Management-by-objectives also seeks to clarify goals. This gives all levels of the organization a solid understanding of their role and how it plays into the objectives of the organization as a whole. Staff in large organizations can easily lose sight of how they are influencing or impacting change. Management-by-objectives aims to illustrate this to employees.
5. Government Performance Results Accountability (GPRA) Act was passed in 1993. Its purpose was to increase public's understanding of, and confidence in, the federal government. This law required accountability standards be set for government agencies. These standards ensured that agency objectives be met. (2) initiate program performance reform with a series of pilot projects in setting program goals, measuring program performance against those goals, and reporting publicly on their progress; (3) improve Federal program effectiveness and public accountability by promoting a new focus on results, service quality, and customer satisfaction; (4) help Federal managers improve service delivery, by requiring that they plan for meeting program objectives and by providing them with information about program results and service quality; (5) improve congressional decision making by providing more objective information on achieving statutory objectives, and on the relative effectiveness and efficiency of Federal programs and spending; and (6) improve internal management of the Federal Government. Implementation of the Government Performance and Results Act of 1993
GPRA Performance Plans - Beginning February 2, 2005, DOL added a performance overview which display ETA's final GPRA performance goals and targets for this year (PY 2004) as well as proposed goals and targets over the next two years (PY 2005 and PY 2006). These performance overviews serve as the source documents for the national GPRA goals and targets.