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Management By Objectives

Definition: -‘Management By Objectives’ is a comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed towards the effective and efficient achievement of organizational and individual objectives.

Evolving Concepts In MBO:

• Early Impetus to MBO:

Since many centuries people have used their common sense and given importance to management by objectives. It was in 1954 that Peter F.Drucker first emphasized that objectives must be set in all areas where performance affects the health of the enterprise. About at the same time General Electric Co. was using MBO in its reorganization

• Emphasis On Performance Appraisal:

In traditional appraisal programs personality traits were used for evaluating subordinates. But when MBO was implemented emphasis was given on performance rather than personality which lead to self appraisal and self development. The active involvement of subordinates leads to commitment and creates an environment for motivation.

• Emphasis on short-term objectives and motivation:

Individual goal setting is an important factor in motivating employees. It is known that performance is higher when people have specific objectives than when they are asked simply to do their best.

• Inclusion Of Long Range Plan In MBO:

In MBO programs that emphasis performance appraisals and motivation the focus tends to be on short term objectives, which may lead to undesirable managerial behavior. Due to these short-comings many organization now include long range and strategic planning in MBO programs.

• The System Approach To MBO

MBO has undergone many changes. It has been used in performance appraisals as an instrument for motivating individual and in strategic planning. But there are still other managerial subsystems that can be integrated into MBO process. Various managerial activities need to be...