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Performance-Based Budgeting is a method of developing budgets based on the relationship between program funding levels and expected results from that program. The Performance-Based Budgeting process is a tool that program administrators can use to manage more cost-efficient and effective budgetary funding.
Description of Performance-Based Budgeting
Performance-Based Budgets are most often used for public-sector, government projects to show the link between taxpayer funds and the outcome of services provided. They are somewhat new to the private sector, but used there as well. They utilize mission statements, goals and objectives to justify expenditures. Performance-based budgets are results-oriented, and the entire planning and budget framework is tied into specific objectives. Performance-based budgets are intended to motivate employees and enhance their commitment to producing positive results.
Performance-Based Budgets are typically comprised of three elements:
- The result or final outcome
- The strategy that shows the ways in which the final outcome will be achieved
- The activity/outputs to show what specifically is done to achieve the outcome
Each element of a Performance-Based Budget would have numerical values attached to it, and performance evaluations would be tied to meeting those budget goals. Performance budgets often rely on quantifying otherwise qualitative or subjective factors so that they can be accurately measured and accounted for.
Praxie's Online Performance-Based Budgeting Tools & Templates
The typical tools used for Performance-Based Budgeting are software programs, spreadsheets, presentations and other strategic documents. Get started with our Performance-Based Budgeting template.
How to use it:
- Review the template and gather the requested information.
- Divide your tasks by phases, list them accordingly and enter the corresponding costs.
- Analyze budget summary and create a plan accordingly.
Unlike most traditional Performance-Based Budgeting processes, Praxie’s online Performance-Based Budgeting tools allow any team or organization to instantly begin working with our web templates and input forms. Our digital platform goes far beyond other software tools by including progress dashboards, data integration from existing documents or other SaaS software, elegant intuitive designs, and full access on any desktop or mobile device.