MANAGEMENT BY OBJECTIVE (MBO)

7/29/2019 MANAGEMENT BY OBJECTIVE (MBO)

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MBO MANAGEMENT BY OBJECTIVE

BY FAIREH MUJEEB AHMED

PAF-KIET


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What Is an Objective?

objective are goals, aims or purposes thatorganisation wish over varying periods of time


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Management By Objectives (MBO)

A method whereby managersand employees define objectives

for every department, project,and person and use them to

monitor subsequentperformance.


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THE NATURE & PURPOSE OF MBOMBO is concerned with goal setting and

planning for individual managers and their units.

The essence of MBO is a process ofjointgoal

setting between a supervisor and a subordinate.

Managers work with their subordinates to

establish performance goals that are consistent

with higher organizational objectives.

MBO helps clarify the hierarchy of objectives as

a series of well-defined means-ends chains.


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Essential Steps for MBO

Set Goals The most difficult step.

Develop Action Plan For both workgroups and individuals.

Review Progress/ Take corrective action Periodic during the year.

Appraise Overall Performance. Review Annual Goals.


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Essential Steps for MBO

Set GoalsThe most difficult step.ConcreteSpecific target and timeframeAssign responsibility

Develop Action PlanCourse of actionFor both workgroups andindividuals

Review ProgressPeriodicity?Course corrections

Appraise Overall Performance.How are we doing?Do we need to restate our goals?


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MAKING MBO PROCESS EFFECTIVE

If MBO is to be successful, it must start atthe top of the organization

Employees must be educated about whatMBO is and what their role in it will be.

Managers must implement MBO in a way thatis consistent with overall organizational goals.


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Managers tell their subordinates what

organizational and unit goals and plans top

management has established.

Managers meet with their subordinates on

a one-to-one basis to arrive at a set of goals

for each subordinate that both develop and

to which both are committed.

Goals are refined to be as verifiable as possible

and achievable within a specified period of time.


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Goals must be written and very clearly stated.

Managers must play the role of counselors in

the goal-setting and planning meeting.

The meeting should specify the resources thatthe subordinate will need

Conducting periodic reviews

The employee is rewarded on goal attainment.


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THE EFFECTIVENESS OF MBO

- STRENGTHSOrganizations create a powerful motivationalsystem for their employees by adopting MBO.

Through the process of discussion andcollaboration, communication is greatlyenhanced.

With MBO performance appraisal may bedone more objectively.


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THE EFFECTIVENESS OF MBO

- STRENGTHSMBO helps identify superior managerial talentfor future promotion.

MBO provides a systematic managementphilosophy

MBO facilitates control through the periodicdevelopment and subsequent evaluation ofindividual goals and plans.


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THE EFFECTIVENESS OF MBO -

WEAKNESSESThe major reason for MBO failure is lack of topmanagement support

goals and plans cascading throughout theorganization may not be those of top management.

Some firms may overemphasize quantitativegoals

Some managers will not or cannot sit downand work out goals with their subordinates

MANAGEMENT BY OBJECTIVE (MBO)

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