Introduction Budgeting is important for both individuals and organizations because it promotes saving and controls spending. It involves the development of a financial plan through consideration of income and expenditures. Factors such as assets, liabilities, available resources, and expenses are considered during budgeting (Donovan, 2005). Budgeting enhances the careful use of resources, accountability, and responsibility among employees. Also, it improves organizational performance because it motivates employees towards achieving organizational goals. Budgeting can be both motivating and demotivating. Organizations undertake budgets such as marketing budget, sales budget, revenue budget, capital budget, production budget, and project budget (Donovan, 2005). How budgeting motivates employees Budgeting is used to motivate employees in several ways. It helps them make financially sound decisions, improves effectiveness by focusing on the outcome of projects, and develops effective fiscal tendencies (Drischel, 2003). This is usually achieved by engaging employees in the process of developing, using and monitoring a budget. The management needs to pay close attention to the allocation of resources in order to motivate employees. Budgeting is a motivating experience because it creates financial certainty. In many organizations, the management offers incentives after the goals are attained. Examples of such incentives include holidays, pay hikes, and corporate memberships to fitness clubs. Budgets enable employees to make decisions that propel them towards the attainment of goals and objectives (Drischel, 2003). Budgets also motivate employees because they create a sense of organizational stability and certainty. Employees become motivated because a budget is an assurance of financial control. This motivates employees to work harder. Adhering to a budget enables employees to improve efficiency, develop discipline, and improve productivity (Drischel, 2003). Reactions of a team to budgeting There are innumerable consequences of putting a team on a budget. The most possible outcome is negativity in case it is not conducted openly and effectively. Budgeting is one of the causes of resistance to change among employees. It introduces change by reducing expenditure and introducing certain activities aimed at cutting cost (Drischel, 2003). For example, holidays and memberships to health fitness clubs may be suspended as a cost-cutting measure. The consequences of such actions include reduced productivity, poor communication at the workplace, development of a negative organizational culture, and resentment of the management by employees. Frustration, anxiety, and fear are common expressions of negativity towards budgets (Dugdale & Lyne, 2010). For example, these expressions are observed among employees in organizations that implement budget cuts such as discontinuation of education benefits, cuts on health insurance, and elimination of incentives such as free beverages. Consequently, employees develop negativity and express it by looking for other jobs, seeking litigation, and avoiding work (Dugdale & Lyne, 2010). Teams become disorganized and ineffective. Communication becomes strained among employees and t