Mbo

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Mbo

  1. 1. Management by objective MBO
  2. 2. Goal-Setting Theory <ul><li>Many believe that everyone already sets goals </li></ul><ul><li>But this is not true </li></ul><ul><li>When groups do set goals, output invariably increases over groups that do not set goals. </li></ul>
  3. 3. Goal setting and incentives <ul><li>Incentives improve performance – but </li></ul><ul><li>Only if they cause individuals to set and commit to attaining specific goals </li></ul>
  4. 4. Why does goal setting effect performance? <ul><li>Goals focus activity </li></ul><ul><li>Goals regulate expenditure of effort </li></ul><ul><li>Difficult goals lead to more persistent effort than do easy goals </li></ul><ul><li>These 3 are critical to the MBO process </li></ul>
  5. 5. What is MBO? <ul><li>We set goals and then performance is judged based on how well we accomplish these goals. </li></ul><ul><li>Intellectually – this seems like the way to go – and has for years </li></ul><ul><li>But? </li></ul>
  6. 6. The goals must be: <ul><li>Mutually agreeable to employee and supervisor </li></ul><ul><li>Demanding (stretching) but achievable </li></ul><ul><li>Within the control of the employee </li></ul><ul><li>Reviewed periodically for modifications based on events </li></ul>
  7. 7. The goals must also be: <ul><li>Clearly defined </li></ul><ul><li>Simple to understand </li></ul><ul><li>Written </li></ul>
  8. 8. Problems with MBO programs <ul><li>Employees get systematically more credit or blame than deserved </li></ul><ul><li>Bias still exist in rating. </li></ul>
  9. 9. The end

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