Performance budget

Performance budget,

Definition of Performance budget:

  1. The decision process for performance budgets focuses on outputs—or outcomes—of services. In other words, the allocation of funds and resources is based on specific goals agreed upon by budget committees and agency heads of services. For instance, in schools teachers may earn bonuses or promotions based on aggregate test scores among their students, which is supposed to show a high degree of skill and effectiveness (although this may not actually be the case always).

  2. A performance budget is one that reflects both the input of resources and the output of services for each unit of an organization. The goal is to identify and score relative performance based on goal attainment for specified outcomes. This type of budget is commonly used by government bodies and agencies to show the link between taxpayer funds and the outcome of services provided by federal, state, or local governments.

  3. Used in a governmental budget for medium- to short-range budgets.

How to use Performance budget in a sentence?

  1. Performance budgets reflect the input of resources and the output of services for each department or unit of an organization.
  2. Disadvantages include the potential for disagreement over spending priorities and a lack of unified cost standards.
  3. They are designed to motivate employees' commitment to produce positive results.

Meaning of Performance budget & Performance budget Definition