Management by Objectives

What is Management by Objectives?

Management by objectives is a management style in which the management supposedly leads their team through clear goals, milestones, plans and agendas. It is a model of management where a leader is transparent about the common goals the whole team should be working towards. This allows the team to stay on track with expectations and feedback.

What is the importance of Management by objective?

Management by objectives is a working model that promotes efficiency using transparency and goal-setting as the foundation components. Management by setting objectives is an essential aspect of effective management because it is important to:

• Set achievable goals
• Set targets on the front and center
• Be transparent about actionable plans
• Have a common goal to look forward to
• Stay motivated by being goal-oriented

What are the three types of Management by objectives?

The three types of management by objectives can be categorized as:

Improvement Objectives: As the name suggests, this type of strategy for managing with objectives allows a team to work on improvement objectives. This helps the team set goals for improvements on a particular project that is currently in motion or is being recalled.

Personal Development Objectives: Again, as the name suggests, personal development objectives under defining management by objectives refers to a stage where everyone on the team sets their own set of goals. This leads to improvement in performance at the individual level.

Maintenance Objectives: Maintenance objectives are defined so that the team can work on necessary patch ups.

What are the 6 stages of Management by objective process?

There are 6 simple stages of management by objective. These are:

1. Determining Organizational Goals: In this stage, you determine the kind of goals that are going to benefit everybody on the team and lead to higher and better results.
2. Determining Employees’ Objectives: In this stage, you determine the employee objectives that are aligned with the organizational objectives.
3. Constant Monitoring Progress and Performance: In this stage, you monitor progress and track changes in the desired plan. This helps you course correct as you go.
4. Performance Evaluation: In this stage, you sit down with the team to determine where the performance lies corresponding to the defined objectives and goals.
5. Providing Feedback: In this stage, after the performance evaluation, you give actionable feedback to every individual/ the group so that everything can go back on track.
6. The Performance Appraisal: In this stage, you reward everyone for their hard work and efforts with monetary input.

What is the goal of Management by objective?

Management by objective is a strategic tactic to help the team determine areas that need work, determine clear and doable goals, and define a path to get there. This promotes transparency and helps the team align with the organizational goals of the org.

What are the advantages and disadvantages of Management by Objective?

Advantages:

• Clear goals allow the team to be motivated and goal-oriented.
• The management is more efficient since all the process and goals are predefined.
• Planning becomes more effective.
• The path towards achieving goals starts to look more manageable.
• It helps with team accountability.

Disadvantages:

• Sometimes the goals are set unreasonably high, and unachieved goals is a cause for a demotivated workforce.
• Sometimes the management ends up dictating goals instead of finding mutual ground.
• If the feedback process and performance reviews are not done on time, the whole plan could go off track very easily.

What is an example of MBO?

Considering human resources as an example, you can set up to 3 goals that can be jotted down to exact numbers. For example, you want to raise your employee engagement index from 65% to 85%. Now that you have determined your goa, you would, ideally, speak to the managers and employees about how this is to be converted to reality. Then you prepare a game plan that everyone can agree on. And, just like that, you’re good to go for coming through on your goals and objectives.