MBO<br />The term MBO was coined by Peter Drucker in 1954<br />“MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner, consciously directed towards the effective achievement of organizational objectives.”<br />
WHAT IS MBO?<br />We set goals and then performance is judged based on how well we accomplish these goals.<br />Intellectually – this seems like the way to go – and has for years<br />But?<br />
The goals must be:<br />Mutually agreeable to employee and supervisor<br />Demanding (stretching) but achievable<br />Within the control of the employee<br />Reviewed periodically for modifications based on events<br />
The goals must also be:<br />Clearly defined<br />Simple to understand<br />Written<br />
Process of MBO<br />Setting of organisational purpose & objectives.<br />Key result areas.<br />Setting subordinate objectives.<br />Matching resources & objectives.<br />Appraisal.<br />Recycling.<br />Aspects:-<br /><ul><li>Objective setting.
Performance review. </li></li></ul><li>BENEFITS OF MBO<br />Better management:-<br /> a) Clarity of objectives.<br /> b) Role clarity.<br /> c) Periodic feedback of performances.<br /> d) Participation by managers in the<br /> management process, and<br /> e) Realisation that there is always scope <br /> for improvement of performance in every <br /> situation.<br />
BENEFITS OF MBO<br />2. Clarity in organisational action.<br />3. Personnel satisfaction.<br />4. Basis for organisational change.<br />
PROBLEMS AND LIMITATIONS OF MBO<br />Difficulty of setting goals<br />Failure to teach MBO philosophy.<br />Problems in objective setting.<br />Emphasis on short-term objectives.<br />Inflexibility.<br />Frustration<br />