Management by Object

The most important aspect of MBO is measuring the actual performance of the employee with the standards set by them. It is also said to be a process that integrates organizational objectives into individual objectives. MBO consists of six main steps:-

1. Set organization goals: Top management sets strategic goals for the company.
2. Set departmental goals: Departmental heads and their superior jointly set supporting goals for their department
3. Discuss departmental goals:. Departmental heads present department goals and ask all subordinates to develop their own individual goals.
4. Set individuals goals: Goals are set for each subordinate and a timetable is assigned for accomplishing those goals
5. Performance Reviews: Measure the results. Department heads compared the actual performance of each employee with expected results.
6. Give feedback: Supervisor and subordinate meet periodically to review the subordinate’s performance and monitor and analyze progress toward his or her goals.

Limitation of MBO
  • MBO methods of performance appraisal can give employees a satisfying sense of autonomy and achievement. But on the downside, they can lead to unrealistic expectations about what can and cannot be reasonably accomplished.
  • It becomes vain appraisal method due to reality checking skill
  • One of the strengths of the MBO method is the clarity of purpose that flows from a set of well-articulated objectives. But this can be a source of weakness also.
  • Of course, the obvious answer is to make the objectives more fluid and yielding. But the penalty for fluidity is loss of clarity.
  • Bias still exist in rating

Clarity of goals – with MBO, came to the concept of SMART so goals should be SMART
· Specific
· Measurable
· Achievable
· Relevant and
· Time bound

Related Topics: what is performance appraisal, 360 Degree Appraisal Method

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