Supervisors: Thomas Kristensen & Thomas Fisker Toldbod
Discussants: Claus Holm & Pernille Smith

Abstract
Budgets are fundamental to management control systems, serving critical functions such as planning and performance evaluation. Despite widespread use, budgets have been criticized for fostering dysfunctional behaviour, including gaming and short-termism, and contributing to job-related tension. While existing research acknowledges that some degree of dysfunctional behaviour in budgeting is unavoidable, its impact on employee stress levels has yet to be explored. We draw on the Job Demands-Resources theory in assessing the impact of the micro-functions of budgets - planning and performance evaluation - while considering the interactive effects of increased dysfunctional behaviour.

Based on survey responses from 246 companies on budget practices combined with micro-level health data on employee stress levels, we find that using budgets for planning purposes significantly increases employee stress levels. Additionally, both the planning and performance evaluation functions, when accompanied by high levels of dysfunctional behaviour, further increase employee stress.

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