Management by objectives helps employees appreciate their roles and responsibilities at work. The planned Key Result Areas (KRAs) are specific to each employee and depend on their interests, educational qualifications, and specialization. The MBO approach usually results in better teamwork and better communication. The term management by objectives refers to the creation of tangible goals for an employee to achieve for the betterment of the organization.
The MBO process revolves around the establishment of organizational goals and the goals of various divisions and subdivisions. The continuous nature of the MBO process not only responds to a sustained concentration of efforts towards organizational objectives, but it also helps to modify the objectives to adapt them to the changing situation. In many cases, objectives are set to match the completion of a project or an annual budget. As a result, evaluation sessions become uncomfortable and uncomfortable for participants and intensify the pressure on subordinates, while giving them a limited selection of objectives.
The MBO process revolves around the establishment of organizational objectives and the objectives of various divisions and subdivisions. Organizational charts and manuals should be amended appropriately to reflect the change caused by the introduction of management by objectives. Professionals say that the main benefits of the MBO are that it improves employee motivation and commitment and allows better communication between management and employees. Not only is the MBO process essential for line managers in business organizations to be more effective, but it is also equally important for monitoring employee performance and progress.
Each department sets its long-term and short-term objectives with the approval of top management; this goal-setting process is reported at lower levels of management. In setting objectives, top management collaborates with groups that are concerned with the implementation of those objectives. The key is to know the drawbacks, customize the plan according to your organization, and make sure that everyone is in full agreement and that the objectives are clear and reasonable before starting. The MBO ensures regular meetings between the superior and the subordinate to review progress towards achieving the objectives of the subordinates.
The practical importance of objectives in management can best be seen by summarizing how successful management by objectives works in practice. Then, the superior must discuss with the subordinate the objectives that he can achieve, the time frame for achieving them and the resources needed. Both together determine the objectives in the light of the skill level of the employees, the availability of resources, the availability of facilities, etc. The ultimate objective of several objectives can be at any level, it must be to achieve general business objectives.