MANAGEMENT BY OBJECTIVES PRESENTED BY: MEHWISH MUSTAFA MANZOOR AHMAD AMJAD SHAMIM
MANAGEMENT BY OBJECTIVES • Process through which specific goals are set collaboratively for the organisation as a whole and every unit and individual within it; the goals are then used as a basis for planning, managing organisational activities, and assessing and rewarding contributions.
MANAGEMENT BY OBJECTIVES • Specific objectives are jointly determined by employees and managers. • Progress towards accomplishing goals is periodically reviewed • Rewards are allocated on the basis of progress towards the goals.
Management by objectives aims to serve as a basis for: • Greater efficiency through systematic procedures • Greater employee motivation and commitment through participation in the planning process • Planning for results instead of planning just for work
The objectives must meet five criteria: They must be: • Arranged in order of their importance • Expressed quantitatively, wherever possible • realistic • Consistent with the organization's policies. • Compatible with one another
MANAGEMENT BY OBJECTIVES Steps in the MBO process: • Develop organisational goals • Establish specific goals for departments • Formulate action plans • Implement and maintain ‘self-control’ • Review progress periodically • Appraise performance
MANAGEMENT BY OBJECTIVES Strengths: • Helps link goals and plans • Clarifies priorities and expectations • Facilitates organisational communication • Fosters employee motivation Weaknesses: • Needs strong, continual commitment • Requires training of managers • May be misused (i.e. for punishment) • Risk of dominance of quantitative goals
MBO Benefits and Problems Benefits: • Manager and employee efforts are focused on activities that will lead to goal attainment. • Performance can be improved at all company levels. • Employees are motivated. • Departmental and individual goals are aligned with company goals.
MBO Benefits and Problems Problems: • Constant change prevents MBO from taking hold. • An environment of poor employer-employee relations reduces MBO effectiveness. • Strategic goals may be displaced by operational goals. • Mechanistic organizations and values that discourage participation can harm the MBO process. • Too much paperwork saps MBO energy.