Hi Friends! If anybody knows what is MBO then pl write me in detail, I want to understand how this would work in Performance Appraisal System. Regards,
From India, Hyderabad
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1From India, Hyderabad
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Mbo means management by objectives... Simply it idicates well planning ... Starting a work with well planned manner reduce mistakes.. U can also refer koontz bookk
From India, New Delhi
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From India, New Delhi
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Hi, MBO stands for Management By Objectives. It is a method of performance appraisal. At the time of hiring a candidate, the company provides some targets, objectives, and goals. Based on these objectives, goals, or targets, the employer assesses the employee's performance for appraisal.
Regards,
Shruti Gupta
From India, New Delhi
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Regards,
Shruti Gupta
From India, New Delhi
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Understanding MBO: Management By Objectives
MBO stands for Management By Objectives. It is one of the modern methods of performance appraisal. The process starts with setting up objectives first, then assessing the various means of achieving those objectives.
Regards,
From India, Kochi
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MBO stands for Management By Objectives. It is one of the modern methods of performance appraisal. The process starts with setting up objectives first, then assessing the various means of achieving those objectives.
Regards,
From India, Kochi
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Goals and Objectives in MBO
One important point - The goals and objectives are applicable across all levels of hierarchy and are set by both the reporting superior and the subordinate to give a clear direction to the entire organization as a whole.
Regards
From India, Mumbai
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One important point - The goals and objectives are applicable across all levels of hierarchy and are set by both the reporting superior and the subordinate to give a clear direction to the entire organization as a whole.
Regards
From India, Mumbai
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Formal Definition:
Management by Objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and attain the best possible results from available resources. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identify their objectives, timelines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach objectives.
Do check with the given links:
Management by Objectives: Definition from Answers.com
MANAGEMENT by OBJECTIVES (MBO) - focus on achievable goals and to attain the best possible results from available resources (Your freeTen3 Business e-Coach)
Regards
From India, Bangalore
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Management by Objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and attain the best possible results from available resources. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identify their objectives, timelines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach objectives.
Do check with the given links:
Management by Objectives: Definition from Answers.com
MANAGEMENT by OBJECTIVES (MBO) - focus on achievable goals and to attain the best possible results from available resources (Your freeTen3 Business e-Coach)
Regards
From India, Bangalore
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Performance Appraisal Process
- At the time of joining, employee KRAs are discussed and given to him/her.
- After the evaluation period, he/she is rated based on the set targets given at the time of joining.
- The self-evaluation is done by the employee (appraisee).
- The employee evaluation is conducted by the Reporting Officer/Head of Department (appraiser).
- Feedback is provided to the employee by assessing the gap between both evaluations.
Regards,
From India, Mumbai
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- At the time of joining, employee KRAs are discussed and given to him/her.
- After the evaluation period, he/she is rated based on the set targets given at the time of joining.
- The self-evaluation is done by the employee (appraisee).
- The employee evaluation is conducted by the Reporting Officer/Head of Department (appraiser).
- Feedback is provided to the employee by assessing the gap between both evaluations.
Regards,
From India, Mumbai
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Dear Rashika,
As indicated by all, it is Management by Objectives.
1. The Key Result Areas (KRA) or Key Performance Indicators (KPI) are discussed with each employee, and the objectives are set.
2. The metrics (unit of measurement) are also decided.
3. The frequency of review is indicated.
4. The weightage for each objective KRA is also indicated.
Example of Key Result Areas for an HR Professional
For example, for an HR professional, the following may be the Key Result Areas:
1. Maintaining the recruitment cost vs. turnover at a specified percentage. The metric here is the percentage of recruitment cost vs. turnover. The frequency may be half-yearly or annual. The weightage may be 25 marks.
2. The salary as a percentage of turnover is restricted to a specified percentage. 25 marks.
3. The training cost vs. turnover. 25 marks.
4. Filling up vacancies within a specified time frame. 25 marks.
All the KRA put together total to 100. Based on the achievements, the rating is done. It is very objective, and there can be no prejudice in the assessment.
Trust matter is clarified.
Regards,
M.V. KANNAN
From India, Madras
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As indicated by all, it is Management by Objectives.
1. The Key Result Areas (KRA) or Key Performance Indicators (KPI) are discussed with each employee, and the objectives are set.
2. The metrics (unit of measurement) are also decided.
3. The frequency of review is indicated.
4. The weightage for each objective KRA is also indicated.
Example of Key Result Areas for an HR Professional
For example, for an HR professional, the following may be the Key Result Areas:
1. Maintaining the recruitment cost vs. turnover at a specified percentage. The metric here is the percentage of recruitment cost vs. turnover. The frequency may be half-yearly or annual. The weightage may be 25 marks.
2. The salary as a percentage of turnover is restricted to a specified percentage. 25 marks.
3. The training cost vs. turnover. 25 marks.
4. Filling up vacancies within a specified time frame. 25 marks.
All the KRA put together total to 100. Based on the achievements, the rating is done. It is very objective, and there can be no prejudice in the assessment.
Trust matter is clarified.
Regards,
M.V. KANNAN
From India, Madras
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Management By Objectives (MBO):
MBO requires management to set specific, measurable goals with each employee and then periodically discuss the employee's progress towards these goals. This technique emphasizes participatively set goals (agreed upon by the superior and the employee) that are tangible, verifiable, and measurable. MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished. It is, thus, a kind of goal-setting and appraisal program involving six steps:
Set the Organization's Goals:
Establish an organization-wide plan for the next year and set company goals.
Set Departmental Goals:
Department heads at this stage take the broader company goals (such as improving profits by 20 percent, increasing market share by 10 percent, etc.) and, with their superiors, jointly set goals for their departments.
Discuss Departmental Goals:
The departmental goals are now put to discussion in a departmental meeting with subordinates. The departmental heads require the subordinates to set their own preliminary individual goals, focusing mostly on what they can do to achieve the department's goals.
Define Expected Results:
In the next step, the departmental heads and their subordinates agree on a set of participatively set short-term and individual performance targets.
Performance Reviews:
Departmental heads compare each employee's actual and targeted performance, either periodically or annually. While periodic review is intended to identify and solve specific performance problems, the annual review is conducted to assess and reward one's overall contribution to the organization. Because employees are evaluated on their performance results, MBO is often called a result-based performance appraisal system.
Provide Feedback:
Both parties now discuss and evaluate the actual progress made in achieving goals, where things have gone off track, how best to rectify the mistakes made in the past, and how the employee could meet the targets next time, focusing attention on his strengths.
Warm Regards,
Suthanthira Selvan.C
From India, Madras
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MBO requires management to set specific, measurable goals with each employee and then periodically discuss the employee's progress towards these goals. This technique emphasizes participatively set goals (agreed upon by the superior and the employee) that are tangible, verifiable, and measurable. MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished. It is, thus, a kind of goal-setting and appraisal program involving six steps:
Set the Organization's Goals:
Establish an organization-wide plan for the next year and set company goals.
Set Departmental Goals:
Department heads at this stage take the broader company goals (such as improving profits by 20 percent, increasing market share by 10 percent, etc.) and, with their superiors, jointly set goals for their departments.
Discuss Departmental Goals:
The departmental goals are now put to discussion in a departmental meeting with subordinates. The departmental heads require the subordinates to set their own preliminary individual goals, focusing mostly on what they can do to achieve the department's goals.
Define Expected Results:
In the next step, the departmental heads and their subordinates agree on a set of participatively set short-term and individual performance targets.
Performance Reviews:
Departmental heads compare each employee's actual and targeted performance, either periodically or annually. While periodic review is intended to identify and solve specific performance problems, the annual review is conducted to assess and reward one's overall contribution to the organization. Because employees are evaluated on their performance results, MBO is often called a result-based performance appraisal system.
Provide Feedback:
Both parties now discuss and evaluate the actual progress made in achieving goals, where things have gone off track, how best to rectify the mistakes made in the past, and how the employee could meet the targets next time, focusing attention on his strengths.
Warm Regards,
Suthanthira Selvan.C
From India, Madras
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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
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From India, Hyderabad
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Management by Objectives (MBO)
The concept of MBO was introduced by the famous management scientist Peter F. Drucker in his book "The Practice of Management." According to this concept, organizational goals are broken down into different level objectives and assigned to individuals at various levels to ensure that the organizational goal/objective is ultimately met. Although the concept was well laid out and popularized by Peter F. Drucker, he himself stated that MBO is not a new concept but has already been 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 employers 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. The ultimate focus of every organization is to make a profit. Management will lay down some policies and programs to meet this goal. To achieve this, many sub-actions need to be carried out at various levels of the organization. The top level will decide their goal and assign the sub-actions to the bottom level.
- **Objective needs to be specific**: The set goal should be clear and specific, realistic, and detailed.
- **Mutual agreement**: The manager and employee should mutually agree upon the target and course of actions.
- **Measurable**: The objective should be measurable in terms of set strategies, e.g., in terms of revenues or the number of customer visits done within a stipulated time period.
- **Attainable**:
- **Timeline**: There should be a timeline for the objective to be met or completed. This timeline should be achievable and realistic.
Advantages:
- Sharpens decision-making.
- Motivates employees as they are part of the decision-making process.
- Increases commitment to attain goals as employees themselves set the goals.
- Managers focus more on the end result rather than routine activities.
- Clarifies roles for employees.
- Enhances boss-employee relationships.
- Provides more control over middle and bottom-level management.
- Ensures individual objectives and organizational objectives are mutually linked.
Practical Difficulties and Drawbacks
- Too much focus on certain areas, with an overemphasis on goal setting.
- Other business areas are not concentrated on as only objectives are focused.
- Only short-term goals are set.
- Documentation is difficult.
- No objectives for higher-level managers.
- Goals are difficult to set.
How to Make MBO Effective
- Teach the system thoroughly to employees.
- Set goals in consultation with employees.
- Implement good measuring and monitoring.
- S_M_A_R_T (Specific, Measurable, Attainable, Revenue-generating, Time-bound).
Criticism
MBO has been criticized for its overemphasis on objectives and difficulty in implementation. Scientists state that the lack of detailed and thorough knowledge about the system may lead to the collapse of organizational goals or the setting of wrong goals. W. E. Deming points out that setting up production goals may force employees and managers to abandon best practices and pursue any means to achieve goals, which may lead to unhealthy practices and poor quality of products and services.
Regards,
R.Gopinath
From India, Madras
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The concept of MBO was introduced by the famous management scientist Peter F. Drucker in his book "The Practice of Management." According to this concept, organizational goals are broken down into different level objectives and assigned to individuals at various levels to ensure that the organizational goal/objective is ultimately met. Although the concept was well laid out and popularized by Peter F. Drucker, he himself stated that MBO is not a new concept but has already been 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 employers 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. The ultimate focus of every organization is to make a profit. Management will lay down some policies and programs to meet this goal. To achieve this, many sub-actions need to be carried out at various levels of the organization. The top level will decide their goal and assign the sub-actions to the bottom level.
- **Objective needs to be specific**: The set goal should be clear and specific, realistic, and detailed.
- **Mutual agreement**: The manager and employee should mutually agree upon the target and course of actions.
- **Measurable**: The objective should be measurable in terms of set strategies, e.g., in terms of revenues or the number of customer visits done within a stipulated time period.
- **Attainable**:
- **Timeline**: There should be a timeline for the objective to be met or completed. This timeline should be achievable and realistic.
Advantages:
- Sharpens decision-making.
- Motivates employees as they are part of the decision-making process.
- Increases commitment to attain goals as employees themselves set the goals.
- Managers focus more on the end result rather than routine activities.
- Clarifies roles for employees.
- Enhances boss-employee relationships.
- Provides more control over middle and bottom-level management.
- Ensures individual objectives and organizational objectives are mutually linked.
Practical Difficulties and Drawbacks
- Too much focus on certain areas, with an overemphasis on goal setting.
- Other business areas are not concentrated on as only objectives are focused.
- Only short-term goals are set.
- Documentation is difficult.
- No objectives for higher-level managers.
- Goals are difficult to set.
How to Make MBO Effective
- Teach the system thoroughly to employees.
- Set goals in consultation with employees.
- Implement good measuring and monitoring.
- S_M_A_R_T (Specific, Measurable, Attainable, Revenue-generating, Time-bound).
Criticism
MBO has been criticized for its overemphasis on objectives and difficulty in implementation. Scientists state that the lack of detailed and thorough knowledge about the system may lead to the collapse of organizational goals or the setting of wrong goals. W. E. Deming points out that setting up production goals may force employees and managers to abandon best practices and pursue any means to achieve goals, which may lead to unhealthy practices and poor quality of products and services.
Regards,
R.Gopinath
From India, Madras
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MBO vs. KRA/KRI in Performance Appraisal
MBO is an improved version of KRA/KRI. Appraisal through MBO is possible only within big industries; for small and medium-sized enterprises, it is KRA/KRI - a simple way of differentiation.
With Regards,
Vijay Maslekar
From India, Raipur
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MBO is an improved version of KRA/KRI. Appraisal through MBO is possible only within big industries; for small and medium-sized enterprises, it is KRA/KRI - a simple way of differentiation.
With Regards,
Vijay Maslekar
From India, Raipur
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Understanding MBO in Performance Appraisal
MBO includes setting up objectives for departments based on the company's goals (some companies do this with the help of an X-matrix). The X-matrix includes the overall goals of the company, which are then simplified for various departments.
Why MBO is Included in Performance Appraisal
MBO is included in performance appraisal because departmental goals are set with the participation of employees. At the beginning of the year, employees of the department set objectives under the guidance of their seniors, which are mutually agreed upon. There is a mid-year and end-year review to assess the achievement of these objectives.
MBO is a very effective 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
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MBO includes setting up objectives for departments based on the company's goals (some companies do this with the help of an X-matrix). The X-matrix includes the overall goals of the company, which are then simplified for various departments.
Why MBO is Included in Performance Appraisal
MBO is included in performance appraisal because departmental goals are set with the participation of employees. At the beginning of the year, employees of the department set objectives under the guidance of their seniors, which are mutually agreed upon. There is a mid-year and end-year review to assess the achievement of these objectives.
MBO is a very effective 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
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Management by Objectives (MBO)
Management by Objectives is a 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
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Management by Objectives is a 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
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Introduction to MBO
MBO was first proposed by Peter Drucker. MBO is an approach to management that helps focus on achievable goals and maximizes output from available resources. The key to the success of MBO is an effective review system.
Regards,
Charu
From India, Delhi
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MBO was first proposed by Peter Drucker. MBO is an approach to management that helps focus on achievable goals and maximizes output from available resources. The key to the success of MBO is an effective review system.
Regards,
Charu
From India, Delhi
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Understanding Management by Objectives (MBO)
MBO is a systematic and organized approach that allows management to focus on achievable goals and attain the best possible results from available resources.
MBO involves participative goal setting, whereby all managers of the firm are directly involved in the strategic planning process. Employees are also involved in choosing the course of action and decision-making. It involves measuring employees' actual performance against set standards, and in most cases, employees are involved in setting their own goals and choosing the course of action. This acts as a motivator to enable them to achieve the targets.
The manager needs to implement a range of performance systems designed in a way that can help an organization function well.
MBO functions on set principles and should operate on the SMART method for checking the validity of objectives.
For an MBO to be complete, there must be feedback.
Regards,
Edna
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MBO is a systematic and organized approach that allows management to focus on achievable goals and attain the best possible results from available resources.
MBO involves participative goal setting, whereby all managers of the firm are directly involved in the strategic planning process. Employees are also involved in choosing the course of action and decision-making. It involves measuring employees' actual performance against set standards, and in most cases, employees are involved in setting their own goals and choosing the course of action. This acts as a motivator to enable them to achieve the targets.
The manager needs to implement a range of performance systems designed in a way that can help an organization function well.
MBO functions on set principles and should operate on the SMART method for checking the validity of objectives.
For an MBO to be complete, there must be feedback.
Regards,
Edna
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