what is a performance budget 
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 understanding a performance budgetthe 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 always be the case performance budgets as the theory goes are designed to motivate employees enhancing their commitment to producing positive results a few examples of outcomes that a performance budget could address include all of these would have numerical targets attached to them a performance budget would be developed accordingly to identify those target numbers and a method of evaluating performance performance budgets often rely on quantifying otherwise qualitative or subjective factors so that they can be measured and accounted for advantages and disadvantages of a performance budgetthe advantages in the public sector are an increase in accountability of the local authorities to the taxpayers communication to the public about priorities and quantifying particular goals taxpayers want to know where and how their money is being spent and to what end similarly nonprofit organizations draw up performance budgets to link inputs and outputs for their missions donors to these organizations also want to know what kind of return society is getting from their donations some disadvantages of a performance budget include one prominent disadvantage of performance budgets is that by assigning target scores or numbers that an organization uses as its benchmark for achievement the numbers can be gamed or become the sole focus of one s task for instance teachers looking to earn a certain score may only focus on the factors that comprise that score and overlook or ignore other factors that may be important to teaching but not for the performance budget 