Management by Objectives
Management by objectives (MBO)
Overview
The essence of MBO is participative goal setting and choosing one’s course of actions. An important part of the MBO is to measure and compare the employee’s actual performance with the set standards.
After defining the organizational objectives as per the yearly business plan set by the top management, objectives are cascaded into smaller, more specific goals at each level of organization (divisional, departmental, individual).
The manager and his subordinates jointly identify the department’s common goals, define each individual's major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the department and assessing the contribution of each of its employees.
By being involved with the goal setting and choosing the suitable course of action, employees can then understand how their activities relate to the achievement of the organization's goal.
Some Advantages of MBO are: * Motivation: involving employees in the whole process of goal setting and increasing employee empowerment, thus higher job satisfaction and commitment. * Better communication and coordination: frequent reviews and interactions between superiors and subordinates help achieve a better and higher communication level. * Clarity of goals: managers can ensure that the achieved objectives of the subordinates are linked to the organization's objectives. * Job satisfaction and commitment: subordinates tend to have a higher commitment to objectives they set for themselves than those rather imposed.
Use S.M.A.R.T. goals to launch management by objectives plan
Prerequisites for a good objective * Specific and well defined. * Measurable criterion in quantifiable terms. * Achievable and within the purview of an individual’s capability. * Realistic and mutually agreed by the manager and the employee concerned. * Time - bound and emphasize on team based
Overview
The essence of MBO is participative goal setting and choosing one’s course of actions. An important part of the MBO is to measure and compare the employee’s actual performance with the set standards.
After defining the organizational objectives as per the yearly business plan set by the top management, objectives are cascaded into smaller, more specific goals at each level of organization (divisional, departmental, individual).
The manager and his subordinates jointly identify the department’s common goals, define each individual's major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the department and assessing the contribution of each of its employees.
By being involved with the goal setting and choosing the suitable course of action, employees can then understand how their activities relate to the achievement of the organization's goal.
Some Advantages of MBO are: * Motivation: involving employees in the whole process of goal setting and increasing employee empowerment, thus higher job satisfaction and commitment. * Better communication and coordination: frequent reviews and interactions between superiors and subordinates help achieve a better and higher communication level. * Clarity of goals: managers can ensure that the achieved objectives of the subordinates are linked to the organization's objectives. * Job satisfaction and commitment: subordinates tend to have a higher commitment to objectives they set for themselves than those rather imposed.
Use S.M.A.R.T. goals to launch management by objectives plan
Prerequisites for a good objective * Specific and well defined. * Measurable criterion in quantifiable terms. * Achievable and within the purview of an individual’s capability. * Realistic and mutually agreed by the manager and the employee concerned. * Time - bound and emphasize on team based