The disadvantages of business objectives include the inability to please everyone and the potential for workers to exploit each other in an effort to achieve those goals. That said, a firm set of goals can be beneficial to most businesses and can lead to consistent success. The worst disadvantage of objective measures of performance is the overemphasis on measuring the achievement of goals. Goals often become the standard that judges all activities, preventing managers and workers from seeing new or more productive methods.
Goal standards also reinforce “right” and “wrong” thinking, causing workers and managers to become obsessed with objectives as a measure of work success. This inflexibility stifles the workforce in a desire to achieve only those objectives without improvement (Jex and Britt, 200). Goal setting has many negative effects, such as reinforcing results-based thinking, which often ignores ethics. For example, when the objective measure of profits determines employee success, this standard overlooks how those profits are made, and that blindness can lead to ignoring and promoting unethical decision-making.
Management by objectives (also known as management by planning) consists of the establishment of a management information system (MIS) to compare actual performance and achievements with defined objectives. Organizational objectives linked to a reward system can affect company culture, create conflict in the workplace, and promote unethical behavior. In objective-based management, subordinates have equal opportunities for participation, which is rejected by senior management. It offers organizations a process, and many professionals say that the success of the MBO depends on the support of top management, clearly defined objectives, and trained managers who can implement them.
In this type of environment, communication based on two methods does not exist and objectives are mandatory for subordinates. Objective measures should be considered only one side of the coin of performance evaluation and be incomplete without a subjective system. The exclusive use of objective measures will allow for a highly qualified workforce that will not be able to work effectively due to non-measurable factors, such as collaboration. The same source recommends not having more than three to five goals and breaking them down into smaller parts.
However, a cited weakness of the MBO is that it places too much emphasis on setting goals to achieve objectives, rather than working on a systematic plan to achieve it. According to the theory, having a say in goal setting and action plans encourages employee participation and commitment, as well as the alignment of objectives throughout the organization. Since the performance of subordinates is overreviewed every six months or every year, they tend to focus on their immediate objectives without worrying about the company's objectives, which vary over the long term. Some of the issues and limitations related to management by objectives are as explained below: Business Management.
Objective measures work best in combination with other measures of attitude and traits or when skills and knowledge need to be tested. The emphasis is on personal growth and development, rather than on the negativity of not achieving goals. By setting clear objectives, you give your employees a greater sense of purpose and responsibility.