Management by Objective MBO


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Management by Objective MBO, applicable to Nursing/Hospital administration

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Management by Objective MBO

  1. 1. Management By Objectives (MBO) Bivin Jose Department of Psychiatric Nursing MB CN, Kothamangalam
  2. 2. Introduction
  3. 3. Definition • A comprehensive managerial system that integrates many key managerial activities in a systematic manner, consciously directed towards the effective & efficient achievement of organizational objectives. (Haro ld Ko o ntz ) • A result centered, non-specialist, operational managerial process for the effective utilization of material, physical & human resources of the organization by integrating the individual with the organization & organization with the environment. (SK Chakrabo rthy)
  4. 4. • A process whereby the superior & subordinate managers of an organization jointly identify its common goals, define each individual's major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members. ( George S. Odiorne,  1965).
  5. 5. Objectives of MBO 1. To measure and judge performance 2. To relate individual performance to organizational goals 3. To clarify both the job to be done and the expectations of accomplishment 4. To foster the increasing competence & growth of the subordinates 5. To enhance communication between superior & subordinates 6. To serve as a basis for judgments about salary & promotion 7. To stimulate the subordinates’ motivation 8. To serve as a device for organizational control &
  6. 6. Characteristics of MBO 1. MBO is an approach & philosophy for management & not merely a technique. 2. MBO is likely to affect every management technique. 3. MBO employs several technique but it is not merely the sum total of these techniques. It is a way of thinking about management. 4. MBO is bound to have some relationship with every management technique. Certain degree of overlapping is there. 5. MBO provides stimulus for the introduction of new techniques of management & enhances the relevance & utility of the existing ones.
  7. 7. 6. The basic emphasis of MBO is an objectives. MBO is also concerned with determining what these results & resources should be. Thus MBO tries to match objectives & resources. 7. MBO is characterized by the participation concerned managers in objective setting, the performance reviews, & his performance. 8. Periodic review of performance is an important feature of MBO. 9. Objectives in MBO provide guidelines for appropriate systems procedures.
  8. 8. Concepts of MBO 1. Objectives: – Form a network of desired results and events 1. Time strategy – Time strategy is the timetable for blending the activities and operation of individual managers to achieve long and short range set of results 1. Total management – A formalized effort to involve and coordinated the contribution of each individual manger towards a common goal. 1. Individual commitment
  9. 9. Process of MBO
  10. 10. MBO Cycle
  11. 11. Aspects of MBO • Key result areas KRA – Priority areas which can help in directing the limited resources towards significant achievements a)Profitability b)Market standing c)Innovation d)Productivity e)Worker performance f) Financial and physical resources g)Mangers performance and development h)Public responsibility
  12. 12. • Importance of KRA’s 1. Indicates the areas where results are important 2. KRA’s are identified at first and then specific objectives are set for each KRA’s 3. It provides guidelines for objectives & strategies & facilitate the pursuit process
  13. 13. • Objectives: log term- short term – Visio nary o bje ctive s-Very long term goals towards which the organization proposes to move. – Attainable o bje ctive s -achieved in 5-10 years time – O pe ratio nalo bje ctive s -Short period objectives which can be achieved in a time period ranging from a few months to 3years • Keys in objective – Quantity (How much)? – Quality (How well)? – Cost (with what resources)? – Time (how soon)?
  14. 14. • Action planning • Elements: 1.Decisions on appropriate strategies for achieving the agreed objectives. 2.Assignment of responsibility for the achievement of an objective. 3.Allocation of resources, people, materials, facilities, funds, etc., required to achieve the objectives. 4.Programming of specific activities on the basis of the best possible alternative for the effective use of allocated resources towards achievement of agreed objectives.
  15. 15. • Performance appraisal • Steps 1. Prepare commitments 2. Implement schedule activities 3. Progress reviews 4. Plan and schedule activities 5. Annual reviews • Features 1. Focus on performance, 2. Emphasis on improvement 3. Future orientation 4. Frequent reviews 5. Self appraisal
  16. 16. Training & Development  Technical skill: Proficient use of knowledge in specific disciplines.  Behavioural skill: Utilization of knowledge &understanding of people as they conduct themselves with others.  Conceptual skill: Ability to utilize existing knowledge in order to perceive additional knowledge.  Implementing skill: Ability to get work done  Economic business skill: Utilization of knowledge & understanding of the business enterprise.  Managerial skill: Effective utilization of planning, directing & controlling enterprise towards profit & perpetuating.
  17. 17. Implementation of MBO 1. Establish clear, mutually understood and agreed upon goals. 2. Establish a plan of action detailing how the goals are to be achieved. 3. Set up specific rewards to be associated with goal achievement 4. Set up and conduct periodic reviews designed to discuss progress towards goal achievement.
  18. 18. Advantages
  19. 19. • Stimulating the motivation of employees. • Sharpened accountability • Vehicle for delegation of authority • Promote interpersonal relationship (Participatory approach) • Welding technique that joins person- centred management to result-centred management
  20. 20. Limitations/Failures • Lack of support from top management. • Resentful attitude of subordinates. • Difficulties in quantifying the goals and objectives. • Costly and time consuming. • Emphasis on short term goals. • Lack of adequate skill and training. • Poor integration. • Lack of follow up.
  21. 21. Ways to improve • Top management, support and commitment. • Clear goal setting. • Participating in goal setting. • Overall philosophy of management. • Decentralization of authority.
  22. 22. Nursing implications • Measure & judge the performance of staffs • Correlate individual performance to organizational goals • Clarifies the job responsibilities expected frm the staffs • Fosters the increasing competencies & growth of the subordinates • Provides a data base for estimating the salary & promotion • Stimulate the subordinates motivations • Helps in organization work control & integrating the activities
  23. 23. References 1. Jogindra Vati (2013). Principles & practice of nursing management and administration, I ed., New Delhi, Jaypee Brothers Medical publishes (P) Ltd. 2. Deepak K, Chandran S & Kumar M (2013), A comprehensive textbook on nursing management, I ed., Bangalore, Emmess Medical Publishers. 75-112 3. Booyens WS(2007), Dimensions of nursing management, II ed., Cape Town, Zebra Publishers. 137-139