Management by objectives- is a management approach that uses organizational objectives as the primary means of managing organizations.
Some of the main characteristics of MBO include a strategy which has three basic parts, and the MBO process which has five steps. The three parts of the MBO strategy include:.
1. All individual in an organization are assigned a set of objectives that they are trying to reach during a normal operating period.
2. Reviews are given periodically to determine how close individuals are to attaining their objectives.
3. Rewards are given to individuals, in accordance with their work performance, and how close they come to reaching their goals.
The first step in the MBO process is:.
1. Review organizational objectives- The manager gains a clear understanding of the organizations overall objectives.
2. Set worker objectives- The manger and worker meet to agree on worker objectives to be reached by the end of the normal operating period.
3. Monitor progress- At intervals during the normal operating period, the manger and worker check to see if the objectives are being reached.
4. Evaluate performance- At the end of the normal operating period, the workers performance is judged by the extent to which the worker reached the objectives.
5. Give rewards- Rewards are given to the worker based on the extent to which the objectives were reached.
The basic concept of MBO, is to set goals and objectives for employees, and reward them based upon their level of output, and how close they come to reaching those goals and objectives set for them.
b. Factors necessary for an MBO program to be successful:.
-Management must be fully committed to all aspects of the MBO process and set appropriate and attainable goals for employees. If management sets goals that are inappropriate to the individual employees the process will have the opposite effect and productivity will go down.
- Management and subordinates must come together and agree on that the objectives set for individuals.