1. Model of the MBO ProcessModel of the MBO Process
Step 1: Setting GoalsStep 1: Setting Goals Step 2: Developing Action PlansStep 2: Developing Action Plans
Step 3:Step 3:
Reviewing ProgressReviewing Progress
Corporate Strategic GoalsCorporate Strategic Goals
DepartmentalDepartmental
GoalsGoals
Individual GoalsIndividual Goals
Step 4: Appraising OverallStep 4: Appraising Overall
PerformancePerformance
Appraisal of Overall PerformanceAppraisal of Overall Performance
Corrective ActionCorrective Action
Review ProgressReview Progress
Action PlansAction Plans

2. MBO Benefits and ProblemsMBO Benefits and Problems
Benefits of MBOBenefits of MBO Problems with MBOProblems with MBO
1. Manager and employee efforts1. Manager and employee efforts
are focused on activities thatare focused on activities that
will lead to goal attainment.will lead to goal attainment.
2. Performance can be improved2. Performance can be improved
at all company levels.at all company levels.
3. Employees are motivated3. Employees are motivated
4. Departmental and individual4. Departmental and individual
goals are aligned with companygoals are aligned with company
goals.goals.
1. Constant change prevents MBO1. Constant change prevents MBO
from taking hold.from taking hold.
2. An environment of poor employer-2. An environment of poor employer-
employee relations reduces MBOemployee relations reduces MBO
effectiveness.effectiveness.
3. Strategic goals may be displaced by3. Strategic goals may be displaced by
operational goals.operational goals.
4. Mechanistic organizations and4. Mechanistic organizations and
values that discouragevalues that discourage
participation can harm the MBOparticipation can harm the MBO
process.process.
5. Too much paperwork saps MBO5. Too much paperwork saps MBO
energy.energy.
Human RelationsHuman Relations