Budgetary planning and control and the evaluation of performance Essay

Budgetary planning and control and the evaluation of performance - Essay Example It represents a plan for the future expressed in formal, measurable terms. (Botner, Stanley, 1991). To be helpful, a budget must be prepared in sufficient detail to inform all levels of management of the exact expectations. It is not sufficient to establish a personnel budget for an institution and limit the detail to a statement of the overall number of employees. This serves no purpose except, perhaps, as part of a summary. Rather, a personnel budget should detail the quantities and types of full-time equivalents by department or cost center, perhaps by shift or by workstation. It should detail the salaries to be paid and the components, including routine, overtime, shift pay, cost of living or merit increases, and so on. All positions -- vacant and otherwise -- should be included in the budget. To assemble the quantity of data necessary to support a detailed plan, a matrix organization of rows and columns is essential. The matrix allows a significant amount of information to be displayed in an orderly manner and a limited amount of space. If organized properly, interrelationshi ps can easily be seen, the data can be viewed and understood quickly, and the chance of arithmetic error can be reduced or eliminated. Figures 1-1 and 1-2 display two such matrix-style worksheets for a nursing department's personnel budget in computer spreadsheet form. One other advantage of a matrix-style worksheet is that it can help guard against errors of omission by specifying certain data to be collected in a particular set of columns or rows. Rather than calculate a salary budget and mistakenly omit "charge pay" or other premium payments, the worksheet can be set up in advance and require that information about these premiums be included for use in the calculations. In order to minimize the chance of leaving something out, it is best to set up budget spreadsheets well in advance of the actual budget preparation schedule and carefully consider actual data requirements. Remember that because computer spreadsheets can hold so much data, it is better to err on the side of collecting too much, rather than too little, data. (Klay, Earle, 2003) Personnel resources that pose a particular problem in terms of recruitment and/or retention can also be dealt with in the budget by inclusion of a recruitment plan, a budgetary emphasis on human resource development and training, or Figure 1-1 XYZ Memorial Hospital Nursing Budget -- Salaries, Fiscal Year 19XX Personnel 2 2 3 3 4 Class North South North South North Total Head Nurse Charge Nurse Clinical Specialist RN - II RN - I LPN Nursing Aide Unit clerk Total This matrix organization allows the salary data for five nursing units to be aggregated and displayed in such a way that the dollar amounts by type for each nursing unit can be compared easily with those for the other four units. The dollar values are added both down and across; and since the total from the rows must equal the total from the columns, the chance of arithmetic error is reduced or eliminated. Figure 1-2 XYZ Memorial Hospital Nursing Budget-FTEs and Salaries, Fiscal