Professional Documents
Culture Documents
OBJECTIVES
Prepared by Mayank Chhajed
MANAGEMENT BY OBJECTIVE
Management by
Objectives(MBO) is
also commonly known
as Management by
Results(MBO). It was
first popularized by
Peter Drucker in his
1954 book The
Practice of
Management.
DEFINITION
Management by Objectives is a process in which the
seniors and subordinates jointly determine common
goals which are to be achieved.
EMPLOYER EMPLOYEE
GOAL!!!!
CORE CONCEPTS OF MBO
According to Drucker managers should “avoid the
activity trap” getting so involved in day to day
activities that they forget their main objective or
purpose. Instead of just a few managers at top
level managers, all managers should:
Participate in strategic planning process, in order
to improve the implementability of the plan, and
Implement a range of performance systems,
designed to help the organization stay on the
right track.
CHARACTERISTICS
OF
MANAGEMENT BY
OBJECTIVES
(MBO)
• TECHNIQUE OF MOTIVATION
INVOLVES MANAGEMENT AT ALL LEVELS
Helps in creating
hierarchy in workplace
TOP
• TOOL OF SELF CONTROL
The process sets a benchmark for all the
employees of the organization.
KRAs are designed for each of the employee to
understand their duties at the work place.
• EVALUATION OF
PERFOMANCE
MBO PROCESS
SETTING GOALS
Top managers formulate the overall goals of the
organization.
Middle managers works with first line managers
to set goals.
This strenghts organizations overall goal and
commitment.
PLANNING ACTION
During action planning, the managers decide on
who, when, where and how details to achieve
the each objective.
IMPLEMENTING GOALS
To control their performance managers must be
allowed to implement their plans in their own
way
This helps in bringing out the element self
control.
Employees are also asked to develop control
processes, to afterwards monitor their own
performance.
PERFORMANCE APPRAISAL
Managers review the performance of the people
they supervise.
Evaluate the plans to achieve individual group
goals.
Discuss on how can these objectives be removed.
BENEFITS OF MBO
1. Encourage control
2. Participation improves responsibility
3. Performance appraisal
4. Basis of organizational change.