A management objective refers to the main objective of a management team or system. These objectives dictate the actions, decisions and regulations created by the management of an organization. Managers often share objectives with employees and executives in order to develop a consistent purpose and strategy for all members of the organization. Each objective and evaluation program should include the establishment of group goals, the group definition of individual and group tasks, the group evaluation of their achievements, the group evaluation of the contribution of each individual member to the group effort (without basing compensation on that evaluation) and shared compensation based on the relative success with which the group goals are achieved.
Objectives should include long-term and short-term goals. Every managerial job is an interdependent task. Managers have responsibilities to each other and to their superiors. The reason for having an organization is to achieve more together than each could achieve on its own.
Why, then, emphasize and reward only individual performance, based on static job descriptions? Such an approach can only guide people toward wrong, self-centered goals. The term management by objectives refers to the creation of tangible goals for an employee to achieve for the betterment of the organization. Management by objectives (MBO) is a strategic business model designed to improve the performance of an organization. It is a strategy with clearly defined objectives that are agreed upon by both management and employees.
Once the term and the idea were presented, George Odiorne, a student of Drucker, continued to develop the idea in his book Management Decisions by Objectives, published in the mid-1960s. Each manager should receive specific compensation for the way they develop people, based on those evaluations. Managers struggle, even when they have high turnover rates, to hear these young people say that they don't give a damn about the objectives set unilaterally by management. 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.
The most effective objectives have specific starting points and end points, which motivates the management team and engages managers with the tasks at hand. Management by objectives is still practiced today, with a focus on planning and development to help various organizations. Track the habits of your managers to determine the areas where they show a constant need for improvement and identify the areas in which they demonstrate that they are prepared to grow. The less time there is per customer and the fewer calls, the better the customer service manager will meet their objectives.
This process allows managers to do the work that needs to be done step by step to allow for a calm and productive work environment. Peter Drucker first used the term management by objectives in his 1954 book The Practice of Management. The very phrase “being accountable” reflects the fact that, while a manager has a responsibility, the superior also has a responsibility for what he does and for the way he does it. Another reason is that, often, when top management sets goals, they are unaware of significant barriers to achievement, causing managers to become cynical.
The MBO helps managers to systemically update and delegate tasks to employees with a mutual understanding and to keep the objectives aligned with the organization's mission. They do not adequately take into account the growing interdependence of managerial work in organizations.