Management by Objectives
Management by objectives is an approach in an organized and systematic manner to define the organizations objective in order, that the employees and management both lay emphasis only on attaining goals gaining maximum benefit from limited resources available. Peter Drucker popularized the concept of Management by Objectives (MBO) in 1954. Its essence lies in improving the performance of organization by setting and coordinating the aims and objectives within the organization. Management by objectives makes use of taking feedback and tracking in order to achieve goals.
The main principle of Management by Objectives (MBO) is developing employee empowerment with clarity among their parts and responsibilities as expected of them, and to understand their prior objectives in order to be achieved, which will then help in the organizations achievement as well as in achievement of their personal goals.
Following are the significant features and advantages of Management by objectives:
- Clarity of goals – MBO introduced the concept of SMART goals: Specific Measurable Achievable Realistic and Time bound. Hence, now the goals set are more encouraging, clear in approach and there exists a connection between the goals of an organization and performance targets by the employers.
- Now, the aim lies on future growth instead of focussing on past. The performance of enterprise lies in goals and standards specifically set all together by gaining periodic reviews and feedback.
- Motivation – motivation refers to encouraging the management and employers by involving them in the entire process for setting targets which is also offers job satisfaction and work commitment.
- Better communication and Coordination – it is highly fruitful that the superiors and subordinates communicate frequently with their opinions and reviews as it solves difficult problems and offers harmonious relationship all together.
- The knowledge-based enterprises can make use of the MBO concept where the employeers are competent. Also, the organizations where employeer empowerment is required and there is need of self leadership skills, MBO style can be used.
Written by: Matt
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