Management by Objectives (MBO) is a comprehensive management system that integrates many key management activities into a systematic process and is consciously directed towards the effective and efficient achievement of organizational and individual objectives. This goal-based management practice involves managers and subordinates working together to set common goals, translating the objectives of the organization to the employees, encouraging employee participation in setting individual goals, and measuring and comparing an employee's actual performance to established standards. To get started with MBO, organizations should first determine or review their organizational objectives for the entire company. Then, employees and supervisors should identify and set goals as a subset of the organization's goals, including the individual goals of employees in the plan.
Employees and their supervisors should then align the two sets of objectives, determine the expected results, and establish criteria for achieving those objectives. When it's time to inspire your team and breathe new life into your organization, consider incorporating goal-based management into your company culture. Human resources should set one to three goals, such as maintaining an employee satisfaction rate of 85%. Point 7 of Deming's Key Principles encourages managers to abandon objectives in favor of leadership because they considered that a leader with an understanding of systems was more likely to guide workers to an appropriate solution than the incentive of a goal.
Employees increase their professional experience by setting goals aligned with the talents, competencies and knowledge acquired. This shows how activity and outcome go together and can dramatically increase productivity. Staff are involved in planning, setting objectives, monitoring the process, and reviewing feedback. Ideally, when employees themselves have been involved in setting goals and choosing the course of action to follow, they are more likely to meet their responsibilities.
These models are quite easy to understand and implementing them together with MBO helps managers achieve better results. As managers and employees set new goals for the upcoming season, it is in their best interest to incorporate the lessons learned into the previous MBO process.