What is the second step in management by objectives?

In the second step, a key component of the objectives was that they were measurable so that employees and managers could determine how well they were being met. This step includes honest feedback on what was achieved and what wasn't achieved for each employee. MBO is a management practice whereby managers and subordinates agree to work together to achieve common objectives. Employees and supervisors identify and set these goals as a subset of the organization's goals and include individual employee goals in the plan.

Then, employees and their supervisors align the two sets of objectives, determine the expected results and, finally, establish the criteria for achieving those objectives. This fundamental step maintains motivation and helps maintain staff enthusiasm for achieving management objectives.

Management by objectives

is a process in which employees and their supervisors identify common objectives and work together to achieve those objectives. Managers and supervisors can implement the lessons learned over time in previous MBO cycles to improve employee and company performance.

Management by objectives uses feedback, which includes criticism of the process and the opinions of managers to enable continuous improvement. To counteract these drawbacks, it is recommended that managers combine the MBO with other models that reduce gaps in the MBO. 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 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.

Within the framework of the MBO, performance evaluation is achieved through the participation of interested managers. The performance evaluation procedure allows managers to identify staff-related problems and correct those problems in order to successfully achieve the objectives. At this point, managers can also identify weaknesses in the criteria used to measure performance goals. This will be an individual conversation in which subordinates will inform managers about their objectives and what objectives they can achieve in a specific time and with what resources.

The effective execution of this management model requires constant communication between employees and managers. Similarly, by involving staff in every step of the MBO process, employees feel valued for their individual contributions and are inherently motivated. While the management approach by objectives is necessary to increase the effectiveness of managers, it is equally essential to monitor the performance and progress of each employee in the organization. These models are quite easy to understand and their implementation together with the MBO helps managers achieve better results.

However, measures such as continuous monitoring, evaluation and feedback are also essential for evaluating employee performance and creating new corresponding compensation structures.