Why might zero-based budgeting lead to manager demotivation?

Zero-based budgeting can lead to manager demotivation primarily because it requires all expenses to be justified annually. This method means that managers must thoroughly review and justify their budget requests from the ground up each year, rather than simply using the previous year's budget as a basis.

This rigorous justification process can be time-consuming and stressful. Managers may feel pressured to defend their expenditures in detail, which can create a sense of micromanagement and scrutiny over their decision-making. If managers believe that they must constantly prove the value of their departments or projects, it can reduce morale and may discourage them from innovating or pursuing new initiatives. Additionally, they might perceive that their efforts are not trusted, which can further undermine motivation and engagement within their roles.

In contrast, streamlining the budget preparation process relates to efficiency, while encouraging unnecessary spending and eliminating budget inconsistencies do not accurately reflect the core challenges associated with zero-based budgeting.