Management By Objective

MANAGEMENT BY OBJECTIVE

Description also available in video format (attached below), for better experience use your desktop.

Introduction

·       MBO is a process in which the employees and the superiors come together to identify

o   Common goals

o   Goals to be achieved

o   Standards to be taken

o   Criteria for the measurement of the performance

o   Course of action to be followed

·       This term was first popularized by Peter Drucker in 1954

Principles

·        Cascading of organizational

o   Vision

o   Goals

o   & Objectives

·        Specific objective for each member

·        Participative decision making

·        Explicit time period

·        Performance evaluation & feedback

 

Basic Parts

·       All individuals are assigned a special set of objectives that they try to reach during a normal operating period

·       Objectives are mutually set and agreed by individuals and their managers

·       Performance reviews are conducted periodically to determine how close individuals are to attaining their objectives

·       Rewards are given to individuals on the basis of how close they come to reaching their goals

 

Process

·       Define organization goals

·       Define employee objectives

·       Continuing monitoring of employees performance and progress

·       Performance evaluation & reviews

·       Providing feedback

·       Performance appraisal

 

Features

·       Motivation

·       Better communication

·       Coordination

·       Smart method because

o   Specific

o   Measurable

o   Achievable

o   Relevant

o   Time bound

 

Applications

·       In knowledge based enterprises

·       To build employee’s management

·       To build self-leadership skills

·       To tap employees creativity and initiative

·       In multinational corporations

 

Advantages

·       Continually emphasize what should be done in an organization to achieve goals

·       Secures employee commitment to attaining organizational goals

 

Disadvantages

·       Time consuming

·       Need commitment

·       Limited to decided goals only

Video Description

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