An Introduction:• The concept of MBO was given by: Peter Drucker in 1954.• MBO is also known as “Management by results” and “goal management”.• The goals are set up in consultation with the subordinates.• According to John W. Humble: “MBO is a dynamic system which seeks to integrate the company’s need to clarify and achieve its profit and growth goals with employees need to contribute and develop themselves. It is a demanding and rewarding style of managing a business.
Characteristics of MBO• Mutual Goal Setting• Compatibility• Systematic• Continuity• Key Result Areas
Objectives of MBO• To relate individual performance to organisational goals.• To increase the competence and growth of the subordinates.• To enhance communication between superiors and subordinates.• To serve as a basis for promotion.• To stimulate subordinates motivation.
The MBO Process Diagnosis Final GoalReview Setting Interim Action Reviews Planning
Diagnosis• Understanding the organisation• Obtaining commitment• Defining jobs• Training People