Hi Friends, Good Morning! Thanks a lot for sharing so much knowledge on MBO. My concepts are very clear now and let’s see if we can set up something like this in our system.. Regards,
From India, Hyderabad
From India, Hyderabad
Dear Friend Rashika,
Here you go.....about MBO (got it from website for MBA & BBA studends)
The concept of MBO is introduced by famous management scientist Peter F Drucker in his book “The practice of management”. As per the concept the organizational goals are broken down to different level objectives and assigned to individuals at different level in order to have the organizational goal/ objective is met ultimately. Even though the concept is well laid and popularized by Peter F Drucker, he himself has stated that MBO is not a new concept but already in place with a few organizations
Definition: MBO can be defined as a set of targets or objectives set by mutual agreement between supervisors and employees or between employer and employees with a course of action, timeline and measuring and monitoring techniques to achieve the objective.
Process of MBO : Management by objectives starts at the top level of management by deciding the organizational goal. Ultimate focus of every organization is to make profit. Management will lay down some policies and programs to meet this goal. In order to achieve this there need to have a lot of sub actions carried out at various level of the organization. Top level will decide their goal and assign the sub actions to the bottom level.
Objective need to be specific: The set goal to be clear and specific. Need to be realistic and detailed.
Mutual agreement: The manager and employee to mutually agree up on the target and course of actions.
Measurable: The objective should be measurable in terms of set strategies. E.g.: In terms if revenues or number of customer visits done with in stipulated time period
Attainable:
Time line: There should be a time line for the objective to be met or completed. This time line should be achievable and realistic
Advantages:
Sharpens decision making
Motivation to employees as they are a part of decision making
Commitment to attain the goals as the employee themselves set the goals.
Managers are more closely looking at end result rather than looking at routine activities
Role clarifying, for employees
Boss- employee relationship increases
More control over the middle level and bottom level management
Managers can see that the individual objectives and organizational objectives are mutually linked
Practical difficulties and draw backs
Too much focused on certain areas – Over emphasize on goal setting
Other business is not concentrated as only objectives are focused
Only short term goals are set
Documentation is difficult
No objective for higher level managers
Goals are difficult to set
How to make MBO effective
Teach the system thoroughly to the employees
Goals need to be set in consultation with employees
A good measuring and monitoring need to be done
S_M_A_R_T (Specific, Measurable, Attainable, Revenue generating, Time bound)
Goals are difficult to set
Criticism
MBO has been criticized for its over emphasize on objectives and difficulty for implementation. Scientists states that, the lack of detailed and thorough knowledge about the system may lead to collapse of organizational goals or setting of wrong goals.
W. E Deming, points that setting up of production goals may force employees and managers to leave the best practices and to go for any ways they can which may lead to unhealthy practices and poor quality of products and services.
Regards,
R.Gopinath
From India, Madras
Here you go.....about MBO (got it from website for MBA & BBA studends)
Management by objectives- MBO
Definition: MBO can be defined as a set of targets or objectives set by mutual agreement between supervisors and employees or between employer and employees with a course of action, timeline and measuring and monitoring techniques to achieve the objective.
Process of MBO : Management by objectives starts at the top level of management by deciding the organizational goal. Ultimate focus of every organization is to make profit. Management will lay down some policies and programs to meet this goal. In order to achieve this there need to have a lot of sub actions carried out at various level of the organization. Top level will decide their goal and assign the sub actions to the bottom level.
Objective need to be specific: The set goal to be clear and specific. Need to be realistic and detailed.
Mutual agreement: The manager and employee to mutually agree up on the target and course of actions.
Measurable: The objective should be measurable in terms of set strategies. E.g.: In terms if revenues or number of customer visits done with in stipulated time period
Attainable:
Time line: There should be a time line for the objective to be met or completed. This time line should be achievable and realistic
Advantages:
Sharpens decision making
Motivation to employees as they are a part of decision making
Commitment to attain the goals as the employee themselves set the goals.
Managers are more closely looking at end result rather than looking at routine activities
Role clarifying, for employees
Boss- employee relationship increases
More control over the middle level and bottom level management
Managers can see that the individual objectives and organizational objectives are mutually linked
Practical difficulties and draw backs
Too much focused on certain areas – Over emphasize on goal setting
Other business is not concentrated as only objectives are focused
Only short term goals are set
Documentation is difficult
No objective for higher level managers
Goals are difficult to set
How to make MBO effective
Teach the system thoroughly to the employees
Goals need to be set in consultation with employees
A good measuring and monitoring need to be done
S_M_A_R_T (Specific, Measurable, Attainable, Revenue generating, Time bound)
Goals are difficult to set
Criticism
MBO has been criticized for its over emphasize on objectives and difficulty for implementation. Scientists states that, the lack of detailed and thorough knowledge about the system may lead to collapse of organizational goals or setting of wrong goals.
W. E Deming, points that setting up of production goals may force employees and managers to leave the best practices and to go for any ways they can which may lead to unhealthy practices and poor quality of products and services.
Regards,
R.Gopinath
From India, Madras
Dear friend
MBO is a improved version of KRA/KRI.Appraisal thro MBO is possible only with big industry and for small & medium class it is KRA/KRI.
simple way of differentiation.
With Regards
vijay maslekar
From India, Raipur
MBO is a improved version of KRA/KRI.Appraisal thro MBO is possible only with big industry and for small & medium class it is KRA/KRI.
simple way of differentiation.
With Regards
vijay maslekar
From India, Raipur
Hi there,
MBO includes setting up of the objectives for departments based upon the goals of company(some companies do it with the help of X-matrix).
x-matrix includes the overall goals of the company,which are then simplified for various departments.
Now,why MBO is included in Performance Appraisal is because departmental goals are set with the participation of employees. In the beginning of year,employees of the department sets objectives in guidance of their seniors which are mutually agreed upon.Now, there is a mid year and end year review to check the achievement of these objectives.
MBO is a very good method because an employee who has to work towards the achievement of objectives should be a part of setting those objectives.
Regards
From India, Kapurthala
1MBO includes setting up of the objectives for departments based upon the goals of company(some companies do it with the help of X-matrix).
x-matrix includes the overall goals of the company,which are then simplified for various departments.
Now,why MBO is included in Performance Appraisal is because departmental goals are set with the participation of employees. In the beginning of year,employees of the department sets objectives in guidance of their seniors which are mutually agreed upon.Now, there is a mid year and end year review to check the achievement of these objectives.
MBO is a very good method because an employee who has to work towards the achievement of objectives should be a part of setting those objectives.
Regards
From India, Kapurthala
Hi friends, This is a new word that i learnt today. think it mostly deals with retail sector. where the marketing for objectives takes place. Thanks fr d information.
From India, Hyderabad
From India, Hyderabad
so nice ppt you made krishna .keep it up.you actually describe the MBO concept in detail.once again thanks to share with all . Regards, Sneha NIkumbh.(HR) 8898133178
From India, Kalyan
From India, Kalyan
Management by Objectives is the modern method of human resources management. Compensation is dependent upon the extent to which the employee's performance matches the agreed objectives. This method of management by objectives frequently leads to increased motivation and enhanced performance on the part of employees.
From Australia, Adelaide
From Australia, Adelaide
MBO was first proposed by Peter Drucker. MBO ia an approach of mgt. that helps to focus on goals that are achievable and getting maximaum output that available from resources. key to the sucess of the MBO ia an effective review system.
regards
charu
From India, Delhi
regards
charu
From India, Delhi
MBO is a systematic and organized approach which allows management to focus on achievable goals and attain the best possible results from available resources.
MBO involves participative goal setting, wherby all managers of the firm are involved directly in strategic planning process. Employees are also involved in choosing the course of action and decision making.
It invoves measurement of employees actual performance against standards set and in most cases, employees are invoved in setting their own goals and choosing the course of action, this acts as a motivator to enable them achieve the targets.
The manager need to impliment a range of performance systems which are designed in away that they can help an organization function well.
MBO functions on set principles and should function on SMART method for checking the validity of their objectives.
For an MBO to be complete, there must be a feed back
regards,
Edna
MBO involves participative goal setting, wherby all managers of the firm are involved directly in strategic planning process. Employees are also involved in choosing the course of action and decision making.
It invoves measurement of employees actual performance against standards set and in most cases, employees are invoved in setting their own goals and choosing the course of action, this acts as a motivator to enable them achieve the targets.
The manager need to impliment a range of performance systems which are designed in away that they can help an organization function well.
MBO functions on set principles and should function on SMART method for checking the validity of their objectives.
For an MBO to be complete, there must be a feed back
regards,
Edna
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MBO.doc