Management by objectives (MBO) is a strategic management approach where employees and employers jointly set goals, define individual responsibilities, and use performance measures to evaluate contributions. The process involves establishing organizational goals based on the company's mission and vision. Individual employee objectives are then defined considering their abilities. Managers continuously monitor performance, provide feedback, and conduct evaluations to improve scope and spot weaknesses. The goal is to review performance regularly and improve efficiency.
2. introduction
❖The term MBO is stands for Management By
Objectives.
❖Also known as PRIDE (Performance, Result,
Individual, Development and Evolution).
❖It was introduced by Peter Ducker in his book The
Practice of Management.
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3. DEFINITION
It is a strategic and management approach where by
the employees and employers come together to
identify for common goals, define each individuals
the major areas of responsibilities in terms of result
expected of him and use those measures to assess
the contribution of each employees after the
completion of task.
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5. Define organizational goals
The first step is to establish an organizational goals
which evolves from the mission and vision of the
company
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6. Define employees objective
The second step is define goals
and objectives of individuals
for this opinion is taken from
the employees on their ability
of goals accomplishment and
targets which the set for
themselves
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7. Continue monitoring progress
and performance
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The manager needs to continuously monitor the
performance of each employee to identify and
loopholes or hurdles in business operation
8. Performance evolution
After completing the monitoring the work, the
managers need to evaluate and review the
performance of every individual to spot any scope
for improvement.
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9. Providing feedback
With the help of above evolution,
the manager now need to give
valuable feedback ton every
individual motivate them
and making them aware
of their weakness and
potential for improvement
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10. Performance appraisal
The last step is to reviewing the performance of
each employees regulatory to bring efficiency in
their work stream
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11. Assumption
❖Existence of mutual understanding betweem
supervisor and subordinate.
❖Employees can perform better when they clearly
known what is expected of them.
❖It assumes that employees are interested in the
formulation of plans want to know the result of heir
performance and want to be fairly rewarded for
their performance
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12. Advantages
❖Efficient management and efficient planning
❖Clarity of organizational goals.
❖Facilitate guidance and direction to subordinates
and motivates them for achieving goals.
❖Easy to achieve organizational goals.
❖Enhance job satisfaction and develop cordial
relationship between supervisor and subordinate
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13. Limitations
❖Difficulty of setting goals.
❖Problems of balancing and coordination.
❖Lack of support of top level managers anf
excessive pressure on the subordinates.
❖Lack of suitable incentives and reward
❖Time consuming process.
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