Final answer:
Budgets should be effective and motivating by being challenging but attainable, prepared with employee involvement, and reviewed with the opportunity to explain variances. A top-down approach is not recommended as it can lead to unrealistic expectations and demotivation.
Step-by-step explanation:
When discussing how budgets can be a positive motivating force within a business or an organization, it is important to consider the best practices and what guidelines should be followed. The guidelines for an effective budget include ensuring that goals are challenging but attainable to motivate employees to reach higher without setting them up for failure. Additionally, it's crucial that employees should help prepare the budget, as this involvement creates a sense of ownership and commitment to the budgetary goals. Finally, evaluations that offer opportunities to explain differences between actual and budgeted amounts encourage communication and learning, rather than merely penalizing for any variances.
The guideline that should not be followed, as per the multiple-choice question, is that budgets should be prepared using a top-down approach. This approach, where upper management creates the budget with little to no input from employees, can often lead to unrealistic expectations and decreased motivation as employees may not feel engaged or considered in the budget-making process.