Management by objectives (MBO) is a strategy that involves setting specific goals for a company and involving all parties in the decision-making process. It can improve employee motivation and communication, but may also lead to unattainable goals and unrealistic expectations for employee performance.
Also known simply as MBO, management by objectives is a strategy that focuses on setting specific goals within a business context. In theory, both the company’s management and employees agree to support these goals and work together to ensure that the company’s goals are achieved. To some extent, this approach allows all parties to be involved in the decision-making process, as it requires feedback from everyone involved in the business.
There are many advantages to managing by model of goals. One has to do with employee motivation. Because employees are actively involved in setting goals and often in the process of designing the processes and procedures that drive the company toward those goals, they tend to have a stronger sense of investment in the overall process. This prompts employees to pay more attention to their productivity, thereby improving employee performance at all levels. As a result, the business has a much better chance of being successful and achieving its goals.
Greater communication within the organization is also one of the benefits of management by objectives. Both managers and employees interact on a regular basis to ensure that the functioning of all departments and areas within the company is running at the highest level. This open line of interaction helps minimize the risk of miscommunication and thus supports the company’s overall production efforts. This clear communication process also helps ensure that everyone clearly understands how hard the company is working to achieve its goals and what each party can do to help in that process.
While there are advantages to managing by goal approach, there are also some potential disadvantages. The focus on creating goals can overshadow the practicalities of designing policies and procedures to achieve those goals. At the same time, strategy can suffer if all stakeholders do not have a clear understanding of what resources can reasonably be used in shaping corporate objectives. Without this foundation in reality, the goals set may be unattainable and lead to great frustration on the part of employees and management.
There is also the danger of evaluating employee performance based on an ideal model, rather than the talents and abilities the employee brings to the effort. In other words, the employee should live up to some examples that may or may not be realistic. Unless the management-by-goal process focuses more on what an employee can do today and less on what the employee can possibly become tomorrow, there is likely to be frustration on both the employee’s and manager’s side that increases possibility of failure.
Protect your devices with Threat Protection by NordVPN
