Journal Assignment: Budgets play a critical role in management activities such as planning, controlling, and motivating employees. Used effectively, budgets can help a company achieve its goals and create a productive work environment. In contrast, budgets can also create a hostile work environment. Watch this video about budgets and employee morale and then reflect upon your own work experiences. Explain how budgeting was incorporated to achieve the company’s overall goals and objectives. Reflect on whether or not the budgets were effectively applied and whether your experience was positive or negative.
In the past, I worked for a small for-profit mental health agency as a child/family therapist. Funding for the agency came from private pay; private insurance, Medicaid/Medicare, and levy generated matching funds for Medicaid/Medicare (fee for services). Minimal information was shared with staff about the fiscal health, or not, of the agency. Overall agency goals and budget information was not shared with staff. Most of my knowledge about the funding streams and reimbursement rates came from overhead conversations between the clinical director and the owners and my previous knowledge from working for a hospital in the same community.
Yearly “productivity” standards were provided to clinical staff with the requisite billing hours within each area of service provided. These productivity requirements were individualized. They were presented to the staff as a contractual obligation requiring a signature with the onus that falling short in any way would jeopardize their employment. The owners began to hold staff to task for failing to meet the yearly-required hours of billing. For many years productivity was calculated at the end of the fiscal year. However, during one fiscal year, the owners changed the requirement several times. First they changed it to quarterly. After several people left or were fired, they changed it to monthly. Again, after people left or had been terminated for not meeting the new expectation, the standard changed to a daily one. No exceptions to the policy were given for any reasons. Staff who worked with children were penalized when children became sick and missed sessions, as well as when schools, places of work and roads closed due to weather and parents were not able to attend counseling sessions, etc. Staff were even penalized productivity missed when taking vacation days
Additionally, the budget was used as the reason behind many job benefits being removed. Benefits such as the agency paying for required continuing education to maintain licensure was removed. Furthermore, paid time off to attend ongoing education was denied to staff when they were behind as little as one hour of billing per year. Permission to utilize vacation time was denied for the same reason. Unpaid time off was the only recourse left to those who needed to obtain the continuing education requirements; when that was done those individuals were counselled for taking the time off and further diminishing their “productivity”.
The budget was used to justify cutting staff salaried staff hours to less than full time ‘to save money and your jobs.’ Salaried staff were expected to work a minimum of 40 hours per week as if they were full time and flex off anything over their allotted hours. Some staff were allotted 35 hours a week, others were 38. Later that same fiscal year, staff hours were ‘reinstated to full time in lieu of a raise.’ This was at a time when there had been no agency raises in over four years. Hence, morale was not raised by the reinstatement of full time hours.
Required software for electronic record keeping was repeatedly requested by staff to increase speed and quality of the extensive paper keeping requirements. The computer system continually shut down for hours and days at a time, three to four times monthly. Finally, a new server was built and installed. Instead of the owner’s spending money on record keeping software, she purchased and installed a spyware program. The reason given was to determine how productive the staff’s activities while using the company computers. With some glee, she explained how she was able to look at real time screen shots of everyone’s computers and record every key stroke. When the question of cost was raised by staff, again, the budget was sited and the expense of electronic record keeping was ‘equivalent to someone’s salary.’
It is difficult to ascertain if the budget developed by the owners was effectively applied other than to say that the agency is still in business. The demoralizing effect of reported ‘budget constraints’ or ‘tightening’ was immense. In five years at this agency, attrition and firing reduced staff numbers from 50 to 25. This included psychiatrists, counselors, nurses, and case managers. The loss of twenty five staff members who generated income in a five year period without the loss of support and administrative staff only served to lower morale and revenue. Sadly, the clients were the ones to suffer most from the frequent loss of treatment staff. I too left this agency because of the toxic work environment which resulted from the “budget” and resulting hostile treatment by the agency owners.