The MBO will only be successful if the objectives can be set in quantifiable terms. But if areas are difficult to quantify and evaluate, it won't be possible to judge employee performance. In addition, MBO has no subjectivity in evaluating performance. The MBO helps managers to systemically update and delegate tasks to employees with a mutual understanding and keeping the objectives aligned with the organization's mission.
A defined set of functions is established for each employee, and their work is also monitored. It consists of planning, designing and executing objectives with transparency and completing them within a defined time frame. The term “Management by Objectives” was first coined by management guru Peter Drucker in his 1954 book, The Practice of Management. The purpose of planning is to develop a plan to grow a business.
The better the planning, the easier it will be for management to take action. Effective planning requires an attitude of never being satisfied with the organization's current performance. Communication is the central pillar of any organization in order to maintain and prosper. The communication process becomes more active between management and employees with this management technique.
The continuous flow of two-way communication provides more opportunities and clarity in ambiguous roles by defining clear objectives for each member of the team. With the MBO, the members of the organization are aware of the functions performed by others. It helps subordinates to inform their managers and to understand them better, since the work assigned to them is mutually decided. In addition, since all members work to achieve the main objective of the organization, the MBO offers an advantage in understanding it and ensuring transparency in the process.
In an organization, we often see employees gradually losing their job satisfaction and sense of commitment. The reason behind this, however, has several reasons. However, one of the important factors is the lack of direction, transparency and lack of communication between superiors and subordinates. This strategic model closes that gap and creates a positive and open work environment.
Management by objectives (also known as management by planning) is the establishment of a management information system (MIS) to compare actual performance and achievements with defined objectives. By comparing actual productivity with a given set of standards, managers can identify problem areas and improve efficiency. Within the framework of the MBO, performance evaluation is achieved through the participation of interested managers. Once employees are informed about the general objectives, the plan, and the strategies to follow, managers can start working with their reports to establish their personal objectives.
It is a strategy with clearly defined objectives that are agreed upon by both management and employees. With the MBO strategic model, the establishment of objectives is carried out with the mutual participation of management and the organization. Management by objectives (MBO) is a strategic business model designed to improve the performance of an organization. Management is efficient when the team's performance exceeds the inputs and resources that invest in it.
It offers organizations a process, and many professionals say that the success of the MBO depends on the support of top management, on clearly defined objectives and on the trained managers who can implement it. Management by objectives (MBO) uses a set of quantifiable standards or objectives with which to measure the performance of a company and its employees. It is a process in which management defines and transmits the goals of the organization to the members of the organization with the intention of achieving each objective. The confusion of job functions or the management of multiple tasks by specific individuals creates an imbalance in the overall management structure.
So, what do you think of MBO as a management technique? Given the advantages of MBO, it's quite clear how it can help managers and employees create a symbiotic working relationship that helps grow the organization...