Solution:

What is Management by Objectives (MBO)?

• Management by Objectives (MBO) is a strategic approach to enhance the performance of an organization.

• It is a process where the goals of the organization are defined and conveyed by the management to the members of the organization with the intention to achieve each objective.

  

• An important step in the MBO approach is the monitoring and evaluation of the performance and progress of each employee against the established objectives.

• Ideally, if the employees themselves are involved in setting goals and deciding their course of action, they are more likely to fulfill their obligations.

1. Define organization goals:

• Setting objectives is not only critical to the success of any company, but it also serves a variety of purposes.

• It needs to include several different types of managers in setting goals.

• The objectives set by the supervisors are provisional, based on an interpretation and evaluation of what the company can and should achieve within a specified time.

2. Define employee objectives:

• Once the employees are briefed about the general objectives, plan, and the strategies to follow, the managers can start working with their subordinates on establishing their personal objectives.

• This will be a one-on-one discussion where the subordinates will let the managers know about their targets and which goals they can accomplish within a specific time and with what resources.

• They can then share some tentative thoughts about which goals the organization or department can find feasible.

3. Continuous monitoring performance and progress:

• Though the management by objectives approach is necessary for increasing the effectiveness of managers, it is equally essential for monitoring the performance and progress of each employee in the organization.

4. Performance evaluation:

• Within the MBO framework, the performance review is achieved by the participation of the managers concerned.

5. Providing feedback:

• In the management by objectives approach, the most essential step is the continuous feedback on the results and objectives, as it enables the employees to track and make corrections to their actions.

• The ongoing feedback is complemented by frequent formal evaluation meetings in which superiors and subordinates may discuss progress towards objectives, leading to more feedback.

6. Performance appraisal:

• Performance reviews are a routine review of the success of employees within MBO organizations.