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 MBO system stimulates employee motivation.
First, they are motivated by their participation in setting goals. They are very interested in implementing the objectives that they have set themselves. Secondly, the evaluation system, being very objective and specific, can greatly increase morale. Subordinates generally distrust management and believe that the MBO is another management strategy to make them work harder and more involved.
Managers and employees often work in departmental silos, focusing on a limited set of objectives rather than working across departments to achieve common objectives. In the MBO, subordinates have the same opportunities to participate, which annoys senior management. It can only be made applicable when both subordinates and managers feel comfortable with it and are willing to participate in it. Sometimes, when setting goals, they may be pressured to get along well with management and the objectives they set may be unrealistically high or too rigid.
Because the goals are set every six months or a year, the manager may not like to review the intermediate goals, even if necessary, for fear of resistance from subordinates. Managers must learn to manage this situation, because sometimes it is necessary to review short-term goals to achieve long-term goals. While it's safe to assume that all managers set goals for their teams and for themselves, those objectives may not be fully in sync with the company's overall objectives. In traditional organizations, authority lies with top management and flows from top to bottom.
In addition, there are too many meetings and too many reports to prepare, which increases the responsibilities and burden on managers. MBO consultants abound and, over the years, numerous methodologies have been developed and refined to help organizations take advantage of the benefits of management by objectives. To ensure that you take advantage of the benefits of management by objectives, it is essential to stay away from difficulties. Many managers tend to sit down with the subordinate, dictate the goals and targets without allowing the participation of the subordinates, and then demand that the goals be achieved within a specific time.
In general, if you can avoid the most common MBO mistakes, you'll get the significant benefits of management by objective.