Management by Objective
Management by Objective (MBO) has several benefits for organizations, including increased clarity around expectations, improved communication and collaboration, and greater accountability for results. It also provides a framework for employees to take ownership of their own performance and development.
- Goal Setting: The first step in the MBO process is to set specific, measurable, achievable, relevant, and time-bound (SMART) goals for each employee or team. These goals should be aligned with the overall goals and objectives of the organization.
- Participative Goal Setting: The second step is to involve employees in the goal-setting process. This helps to ensure that goals are challenging but achievable, and that employees are committed to achieving them.
- Performance Planning: Once the goals are set, managers and employees work together to develop a plan for achieving those goals. This includes identifying resources, timelines, and milestones.
- Performance Review: Regular meetings are held between managers and employees to review progress towards the goals. This allows for adjustments to be made to the plan as needed and provides an opportunity to recognize and reward good performance.
- Performance Appraisal: At the end of the performance period, a formal appraisal is conducted to evaluate the employee’s overall performance, including progress toward goals.
However, MBO is not without its challenges. It can be time-consuming and requires a significant amount of effort to implement and maintain. Additionally, if goals are not set properly or if employees are not fully committed to achieving them, the process may not be effective.
Overall, MBO can be a powerful tool for organizations that are committed to improving performance and achieving their goals. However, it should be implemented thoughtfully and with the understanding that it requires ongoing effort and commitment from both managers and employees.
To further illustrate MBO, here are a few more examples:
- A sales team may set a goal to increase sales by 15% in the next quarter by focusing on a particular product line or target market.
- A customer service team may set a goal to reduce customer wait times by 50% within the next month by implementing new processes and training programs.
- An IT team may set a goal to reduce system downtime by 25% in the next year by implementing new maintenance procedures and upgrading equipment.
Overall, MBO can be a useful tool for organizations looking to improve performance and achieve specific goals. However, it’s important to carefully consider the goals being set and ensure that they are aligned with the overall strategy and objectives of the organization. Additionally, it’s important to communicate the MBO process clearly and involve employees in the goal-setting and performance review process to ensure buy-in and engagement.
In the following Ted Talk, from April 2018 in Vancouver, Canada, speaker John Doerr presents approaches to setting “meaningful and audacious goals” and shares Professor Andy Grove’s system termed “Objectives and Key Results.”
The following supplementary video may help you better understand the concepts provided. This supplementary resource has been authorized by the content creator. To view this free and open supplementary resource, please click the link below:
[TED Talks]. (2018, July 2). Why the secret to success is setting the right goals | John Doerr | TED [Video]. Http://www.ted.com. https://www.youtube.com/watch?v=L4N1q4RNi9I
To view all open and free supplementary resources, click here: https://alberta.college/supplementary-free-and-open-course-resources/
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