Budgetary slack is an effective motivator for employees,because it reduces employee frustration when goals cannot be achieved.

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Budgetary slack may actually demotivate employees because they may perceive the lowered goals as a lack of trust in their abilities or as unchallenging targets. Additionally, budgetary slack can lead to poor financial performance and decreased organizational effectiveness.

Budgetary Slack Is an Effective Motivator for Employees,because It Reduces