MBO
MBO is a management method in which particular goals and objectives are jointly established by managers and employees for every department, project and organization. Responsibilities are assigned to every individual by superiors. Progress is periodically reviewed and the employees are rewarded on goal attainment according to their performance.
The term MBO was first used by PETER DRUCKER (November 19, 1909 – November 11, 2005) in his 1954 classic ‘The Practice of Management’. MBO rose in 1960′s and 1970′s when it was adopted by most publicly traded companies. It was popular and it is popular. MBO method is being used in many organizations.MBO is concerned with collaboratively goal setting and planning. Managers work with their subordinates to establish performance goals that are consistent with higher organizational objectives.
MBO is a participative and democratic style of management. Here, ample a scope is given to subordinates and is given higher status and positive/participative role. In short, MBO is both a philosophy and approach to management. MBO concept is different from MBC (Management by Control) and is also superior in many respects.
Steps In Management By Objectives Planning :-
Goal setting: The first phase in the MBO process is to define the organizational objectives. These are determined by the top management and usually in consultation with other managers. Once these goals are established, they should be made known to all the members. In setting objectives, it is necessary to identify "Key-Result Areas' (KRA).
Manager-Subordinate involvement: After the organizational goals are defined, the subordinates work with the managers to determine their individual goals. In this way, everyone gets involved in the goal setting.
Matching goals and resources: Management must ensure that the subordinates are provided with necessary tools and materials to achieve these goals. Allocation of resources should also be done in consultation with the subordinates.
Implementation of plan: After objectives are established and resources are allocated, the subordinates can implement the plan. If any guidance or clarification is required, they can contact their superiors.
Review and appraisal of performance: This step involves periodic review of progress between manager and the subordinates. Such reviews would determine if the progress is satisfactory or the subordinate is facing some problems. Performance appraisal at these reviews should be conducted, based on fair and measurable standards.
An important aspect of the MBO approach is this agreement between employees and managers regarding performance which is open to evaluation. The principle is that when employees are involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities. There is a link between organizational goals and performance targets of the employees.
In MBO goals are expected to be SMART, i.e.
Specific
Measurable
Achievable
Realistic, and
Time bound.
MBO is a management method in which particular goals and objectives are jointly established by managers and employees for every department, project and organization. Responsibilities are assigned to every individual by superiors. Progress is periodically reviewed and the employees are rewarded on goal attainment according to their performance.
The term MBO was first used by PETER DRUCKER (November 19, 1909 – November 11, 2005) in his 1954 classic ‘The Practice of Management’. MBO rose in 1960′s and 1970′s when it was adopted by most publicly traded companies. It was popular and it is popular. MBO method is being used in many organizations.MBO is concerned with collaboratively goal setting and planning. Managers work with their subordinates to establish performance goals that are consistent with higher organizational objectives.
MBO is a participative and democratic style of management. Here, ample a scope is given to subordinates and is given higher status and positive/participative role. In short, MBO is both a philosophy and approach to management. MBO concept is different from MBC (Management by Control) and is also superior in many respects.
Steps In Management By Objectives Planning :-
Goal setting: The first phase in the MBO process is to define the organizational objectives. These are determined by the top management and usually in consultation with other managers. Once these goals are established, they should be made known to all the members. In setting objectives, it is necessary to identify "Key-Result Areas' (KRA).
Manager-Subordinate involvement: After the organizational goals are defined, the subordinates work with the managers to determine their individual goals. In this way, everyone gets involved in the goal setting.
Matching goals and resources: Management must ensure that the subordinates are provided with necessary tools and materials to achieve these goals. Allocation of resources should also be done in consultation with the subordinates.
Implementation of plan: After objectives are established and resources are allocated, the subordinates can implement the plan. If any guidance or clarification is required, they can contact their superiors.
Review and appraisal of performance: This step involves periodic review of progress between manager and the subordinates. Such reviews would determine if the progress is satisfactory or the subordinate is facing some problems. Performance appraisal at these reviews should be conducted, based on fair and measurable standards.
An important aspect of the MBO approach is this agreement between employees and managers regarding performance which is open to evaluation. The principle is that when employees are involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities. There is a link between organizational goals and performance targets of the employees.
In MBO goals are expected to be SMART, i.e.
Specific
Measurable
Achievable
Realistic, and
Time bound.