The article discusses implications of budgets for motivation and behavior in the context of expectancy theory as developed in the psychology of motivation. The authors discuss how the expectancy model reconciles what might appear to be contradictory findings from prior studies. Budgets aid planning in that they incorporate forecasts which reflect the anticipated consequences of different combinations of plans made by management and the relevant uncontrollable events that may occur in the environment. The control function is typically a feedback process whereby information about past performance is provided to those who "control," to be utilized by them for making decisions. As a motivational tool, the budget conveys information to the subordinate about expectations of superiors regarding what constitutes successful task performance and the consequent reinforcement contingencies. The expectancy model is viewed as underlying the superior-subordinate budget relationship in two respects, as the model according to which the subordinate's motivation to perform the task is influenced via the budget; and as the model which the superior regards as determining the subordinate's motivation.