Management By Objectives (MBO)‏ MBO can be described as “a process whereby the superior and subordinate managers of an organization jointly identify its common goals,define each individuals major areas of responsibility in terms of results expected of him/her and use these measures as guides for operating the unit and assessing the contributions of each of its members .

The MBO Process 1.Arranging organisational goals. 4. Conducting annual performance review 3. Conducting periodic progressive review 2. Engaging in joint goal settings. 1.Arranging organisational goals.

UNIQUE FEATURES AND ADVANTAGES OF MBO The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. Some of the important features and advantages of MBO are: Clarity of goals – With MBO, came the concept of SMART goals i.e. goals that are: Specific Measurable Achievable Realistic, and Time bound.

UNIQUE FEATURES AND ADVANTAGES OF MBO The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees. The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback. Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.

UNIQUE FEATURES AND ADVANTAGES OF MBO Better Planning Facilitates Control. Objective Appraisal Better Morale Result-oriented philosophy

Limitations Pressure -Oriented Time Consuming Increased paperwork Goal-setting problems. Organisational Problems

Suggestions for improving the effectiveness of MBO Organizational Commitment. Training Adequate time and resources Take care of the necessary mechanics. Timely feedback