The Management By Objectives

1435 words (6 pages) Essay

9th May 2017 Management Reference this

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Managing employee performance is an integral part of the work that all managers and rating officials perform throughout the year. It is as important as managing financial resources and program outcomes because employee performance or the lack thereof, has a profound effect on both the financial and program components of any organization. The Department of the Interior’s performance management policy is designed to document the expectations of individual and organizational performance, provide a meaningful process by which employees can be rewarded for noteworthy contributions to the organization, and provide a mechanism to improve individual/organizational performance as necessary. To accomplish these objectives, managers need to identify organizational goals to be accomplished, communicate individual and organizational goals to employees that support the overall strategic mission and goals of the Department, monitor and evaluate employee performance, and use performance as a basis for appropriate personnel actions, including rewarding noteworthy performance and taking action to improve less than successful performance.

The Office of Personnel Management defines performance management as the systematic process of:

1. Planning work and setting expectations

2. Continually monitoring Performance

3. Developing the capacity to perform

4. Periodically rating performance in a summary fashion; and

5. Rewarding good performance

MANAGEMENT BY OBJECTIVES

The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.

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THE MBO PROCESS

The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. Some of the important features and advantages of MBO are:

•Clarity of goals – With MBO, came the concept of SMART goals i.e. goals that are: Specific Measurable Achievable Realistic, and Time bound. The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees.

•The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback.

•Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment.

•Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.

Industrial management in the early stages primarily used Management by Objectives (MBO) at higher management level. But, it is used at ground level these days to insure productivity. It encompasses clear objective at a group level and periodic measurement of employee’s performance. Due to fierce competition prevailing not only at a national level but at a global level, quality management has surged to its peak. Hence, emanate the need for implementation of effective MBO (Management by Objectives) system which is in fact an effective goal setting technique for management.

Management by Objectives (MBO) indeed is also an appraising technique to value employee performance. Management by Objectives (MBO) involve employee participation, goal specificity, performance feedback, reward based on performance, job description, participative decision making. Preponderance of organization is dramatically affected in terms of productivity because of better employee performance. Hence, Management by Objectives (MBO) offers a clear goal, specifies job responsibilities and reduce ambiguity through continuous performance feedback.

It not only influences employee’s performance but also promote organizational productivity on the whole. Commitment towards the goal attainment improves job satisfaction as well as group productivity. Employees should be energetic who operate all their capability so as to attain the specified goal. According to Antoni, C. (2005) Management by Objectives (MBO) is an effective tool for leading self-regulating teams.

An extensive use of MBO (Management by Objectives) style is indicated by recent research. Traditional management approaches are no longer in trade these days because of explicit use of MBO (Management by Objectives) which flourished employee as well as organizational productivity. However, operational part of Management by Objectives (MBO) is viewed more complicated and difficult to follow in many ways. Management by Objectives (MBO) is ideal from the point of view of control and effectiveness. Research is a means to covers practical problems in the organization.

Advantages of Management by Objectives (MBO):

1. Motivation – Employees involvement in goal setting process improves their job satisfaction, make them fell more empowered and hence more committed.

2. Clarity of goals – Participative goal setting in the process of MBO (Management by Objectives) involves clarity of goals of its subordinates.

3. Better communication and co-ordination – Supervisors and subordinates interact on a frequent basis to maintain good communication and co-ordination amongst themselves.

Disadvantages of Management by Objectives (MBO):

1. Settings of goals are over emphasized in order to drive outcomes over the working of a plan.

2. Importance of the environment or the context in which the goals are set is under emphasized.

3. It focuses on what employees should be; by comparing them with ‘ideal’ employee not on what they should do.

4. It just addresses on reaching the goals no matter how successfully the constraints and obstacles were responded.

5. It doesn’t consider obstacles of defects in planning, availability of resources, and the methodology that we pursue.

6. It doesn’t cope with the challenge of burden of managing the information organization.

7. Yesterday’s goal might not be relevant to today’s context i.e. impact of rapidly changing environment is not taken into account.

Conclusion

Research proves that there exists direct positive relationship between effective Management by Objectives (MBO) approach and employee performance and organizational productivity. Proper goal specificity with participative decision making bounded by the time frame and finally backed by feedback encourages employee performance and promotes job satisfaction thereby enhancing organizational productivity.

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MBO (Management by Objectives) is gaining popularity on a global basis as both managers as well as employee want to get rid of stereotype of management practices. Today is the age of new revolutionary way of management style i.e. Management by Objectives (MBO). Conclusion:

Research proves that there exists direct positive relationship between effective Management by Objectives (MBO) approach and employee performance and organizational productivity. Proper goal specificity with participative decision making bounded by the time frame and finally backed by feedback encourages employee performance and promotes job satisfaction thereby enhancing organizational productivity.

MBO (Management by Objectives) is gaining popularity on a global basis as both managers as well as employee want to get rid of stereotype of management practices. Today is the age of new revolutionary way of management style i.e. Management by Objectives (MBO).

Managing employee performance is an integral part of the work that all managers and rating officials perform throughout the year. It is as important as managing financial resources and program outcomes because employee performance or the lack thereof, has a profound effect on both the financial and program components of any organization. The Department of the Interior’s performance management policy is designed to document the expectations of individual and organizational performance, provide a meaningful process by which employees can be rewarded for noteworthy contributions to the organization, and provide a mechanism to improve individual/organizational performance as necessary. To accomplish these objectives, managers need to identify organizational goals to be accomplished, communicate individual and organizational goals to employees that support the overall strategic mission and goals of the Department, monitor and evaluate employee performance, and use performance as a basis for appropriate personnel actions, including rewarding noteworthy performance and taking action to improve less than successful performance.

The Office of Personnel Management defines performance management as the systematic process of:

1. Planning work and setting expectations

2. Continually monitoring Performance

3. Developing the capacity to perform

4. Periodically rating performance in a summary fashion; and

5. Rewarding good performance

MANAGEMENT BY OBJECTIVES

The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.

THE MBO PROCESS

The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. Some of the important features and advantages of MBO are:

•Clarity of goals – With MBO, came the concept of SMART goals i.e. goals that are: Specific Measurable Achievable Realistic, and Time bound. The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees.

•The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback.

•Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment.

•Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.

Industrial management in the early stages primarily used Management by Objectives (MBO) at higher management level. But, it is used at ground level these days to insure productivity. It encompasses clear objective at a group level and periodic measurement of employee’s performance. Due to fierce competition prevailing not only at a national level but at a global level, quality management has surged to its peak. Hence, emanate the need for implementation of effective MBO (Management by Objectives) system which is in fact an effective goal setting technique for management.

Management by Objectives (MBO) indeed is also an appraising technique to value employee performance. Management by Objectives (MBO) involve employee participation, goal specificity, performance feedback, reward based on performance, job description, participative decision making. Preponderance of organization is dramatically affected in terms of productivity because of better employee performance. Hence, Management by Objectives (MBO) offers a clear goal, specifies job responsibilities and reduce ambiguity through continuous performance feedback.

It not only influences employee’s performance but also promote organizational productivity on the whole. Commitment towards the goal attainment improves job satisfaction as well as group productivity. Employees should be energetic who operate all their capability so as to attain the specified goal. According to Antoni, C. (2005) Management by Objectives (MBO) is an effective tool for leading self-regulating teams.

An extensive use of MBO (Management by Objectives) style is indicated by recent research. Traditional management approaches are no longer in trade these days because of explicit use of MBO (Management by Objectives) which flourished employee as well as organizational productivity. However, operational part of Management by Objectives (MBO) is viewed more complicated and difficult to follow in many ways. Management by Objectives (MBO) is ideal from the point of view of control and effectiveness. Research is a means to covers practical problems in the organization.

Advantages of Management by Objectives (MBO):

1. Motivation – Employees involvement in goal setting process improves their job satisfaction, make them fell more empowered and hence more committed.

2. Clarity of goals – Participative goal setting in the process of MBO (Management by Objectives) involves clarity of goals of its subordinates.

3. Better communication and co-ordination – Supervisors and subordinates interact on a frequent basis to maintain good communication and co-ordination amongst themselves.

Disadvantages of Management by Objectives (MBO):

1. Settings of goals are over emphasized in order to drive outcomes over the working of a plan.

2. Importance of the environment or the context in which the goals are set is under emphasized.

3. It focuses on what employees should be; by comparing them with ‘ideal’ employee not on what they should do.

4. It just addresses on reaching the goals no matter how successfully the constraints and obstacles were responded.

5. It doesn’t consider obstacles of defects in planning, availability of resources, and the methodology that we pursue.

6. It doesn’t cope with the challenge of burden of managing the information organization.

7. Yesterday’s goal might not be relevant to today’s context i.e. impact of rapidly changing environment is not taken into account.

Conclusion

Research proves that there exists direct positive relationship between effective Management by Objectives (MBO) approach and employee performance and organizational productivity. Proper goal specificity with participative decision making bounded by the time frame and finally backed by feedback encourages employee performance and promotes job satisfaction thereby enhancing organizational productivity.

MBO (Management by Objectives) is gaining popularity on a global basis as both managers as well as employee want to get rid of stereotype of management practices. Today is the age of new revolutionary way of management style i.e. Management by Objectives (MBO). Conclusion:

Research proves that there exists direct positive relationship between effective Management by Objectives (MBO) approach and employee performance and organizational productivity. Proper goal specificity with participative decision making bounded by the time frame and finally backed by feedback encourages employee performance and promotes job satisfaction thereby enhancing organizational productivity.

MBO (Management by Objectives) is gaining popularity on a global basis as both managers as well as employee want to get rid of stereotype of management practices. Today is the age of new revolutionary way of management style i.e. Management by Objectives (MBO).

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