MANAGEMENT BY OBJECTIVES

OBJECTIVE:
Management by objectives (also known as management by planning) is the creation of a management
information system (MIS) to compare actual performance and accomplishments to the defined
objectives. According to practitioners, the main advantages of MBO are that it increases employee
motivation and commitment while also allowing for better communication between management and
employees.
However, one cited weakness of MBO is that it overemphasised setting goals to achieve objectives
rather than working on a systematic plan to do so. W. Edwards Demming, a critic of MBO, claims that
setting specific goals, such as production targets, leads workers to meet those targets by any means
necessary, including short-cuts that result in poor quality.

OBJECTIVES IN PRACTICE:
1.The first step is to establish or revise organisational goals for the entire company. This broad
overview should be based on the company's mission and vision.
2.The second step is to communicate organisational goals to employees. To express the concept,
George T. Doran coined the acronym SMART (specific, measurable, acceptable, realistic, time-bound)
in 1981. 2 3.The third step is to encourage employee participation in setting individual goals.
Employees should be encouraged to help set their own objectives to achieve the larger organisational
objectives after the organization's objectives have been shared with them from the top
down.Employees are more motivated as a result of increased empowerment.
4.Step four entails keeping track of employees' progress. A key component of the objectives in step
two was that they are measurable, allowing employees and managers to assess how well they are met.
5.The fifth step is to assess and recognise employee progress. This step includes providing each
employee with honest feedback on what was and was not accomplished.

ADVANTAGES AND DISADVANTAGES:

MBO has many benefits and drawbacks for a company's success. Employees take pride in their work
and set goals that they know they can achieve. It also matches employees' strengths, skills, and
educational experiences. MBO also improves communication between management and employees.
Assigning tailored goals instils a sense of importance in employees, resulting in loyalty to the
company. Finally, management can set goals that will lead to the company's success.

MBO has a number of advantages, but it also has some disadvantages and limitations. Because MBO
is focused on goals and targets, it frequently overlooks other aspects of a company, such as the culture
of conduct, a healthy work ethos, and opportunities for involvement and contribution. MBO places
additional pressure on employees to meet goals within a specific time frame. Furthermore, if
management relies solely on MBO for all management responsibilities, it can be problematic for areas
that do not fall under MBO.

GOALS:
MBO employs a set of quantifiable or objective standards to assess a company's and its employees'
performance. Managers can identify problem areas and improve efficiency by comparing actual
productivity to a set of standards. Both management and employees are aware of and agree on these
standards and objectives.

DRAWBACKS:
Because MBO is entirely focused on goals and targets, it frequently overlooks other aspects of a
company, such as corporate culture, employee conduct, a healthy work ethos, environmental issues,
and opportunities for involvement and contribution to the community and social good.

WHY IS MBO SUCCESSFUL?

The MBO approach usually results in better teamwork and communication. It
provides the employees with a clear understanding of what is expected of them. The
supervisors set goals for every member of the team, and every employee is provided
with a list of unique tasks. Every employee is assigned unique goals