![]() It helps in locating weak and problem areas because of improved communication and organization structure. ![]() It provides a greater opportunity to managers for personal satisfaction on account of participation in objective setting and rational performance appraisal. It stimulates the subordinates’ motivation. Management by Objectives helps in improving productivity as the management team concentrates on the important task of reducing costs. When each and every employee knows what to achieve, control becomes very easy and automatic. There is no better incentive for self- control and no better way to know the standards for control than having a set of clear goals. MBO helps in making a more systematic evaluation of performance. It serves as a device for organizational control integration. Device for Organizational Control and Systematic Evaluation Moreover, the companies that embark on MBO programs can easily discover deficiencies in their organization and take the necessary steps to rectify. So far as possible, organizational positions are built around the key results expected of the people occupying them. MBO forces management to clarify organizational roles and structures. As a matter of fact, people become enthusiastic when they control their own fate. Moreover, the fact that they often participate in goal- setting, improves their commitment to work. MBO encourages employees to commit themselves to their goals because they have before them clearly defined objectives. In order to make objectives realistic, Management by Objectives also requires that managers think of the way they will accomplish results and the resources and assistance they will require. MBO forces managers to think about planning for results, rather than merely planning work or activities. Objectives cannot be established without planning, and results-oriented planning is the only kind that makes sense. Device for Organizational Control and Systematic Evaluation.Management by objective defined as a management system in which specific performance goals are jointly determined by employees and their managers, progress toward accomplishing those goals is periodically reviewed and rewards are allocated on the basis of this progress. An important part of the MBO is the measurement and comparison of the employee’s actual performance with the standards set. The essence of MBO is participative goal setting, choosing a course of actions and decision-making process. Employees are provided with feedback on actual performance as compared to planned performance.Ĭommon Elements of a Management by Objectives Program.MBO provides the means for integrating the organization with its environment, its subsystems, and people.A periodic review of performance is an important feature of MBO.Objectives in MBO provide guidelines for appropriate systems and procedures.Management by Objectives tries to match objectives with resources. The basic emphasis of MBO is on objectives.It is concerned with converting an organizational objective into a personal objective on the presumption that establishing personal objectives makes an employee committed which leads to better performance.It is directed towards the effective and efficient accomplishment of organizational objectives.Objectives are established for all levels of the organization.Objective setting and performance review are made by the participation of the concerned managers.It is a technique and philosophy of management. ![]() ![]() In the light of the above definitions of MBO, the following features of it can be identified The entire process is a combination of planning and control. In the final stage of the MBO process, employees are asked to develop control processes, to monitor their own performance and to suggest corrective measures if deviations from plans do occur. ![]()
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