MANAGEMENT BY OBJECTIVES


Management by Objectives is a structured technique used in planning and controlling in which
subordinates develop their objectives jointly with their superiors and it requires that information be
provided about results achieved versus the original objectives. The manager must formulate very specific
and measurable objectives that he wants to achieve. In 1954, Peter Drucker was the first to publicize the
MBO approach in his book Practice of Management.1 He described MBO as a program to motivate
employees to become personally interested in their work. Drucker pointed out the advantages of managing
by "objectives" rather than managing by "drives". By managing by objectives, each manager from the
highest level to the lowest level should have clear objectives that reflect and support the objectives of
higher level management. There are two types of objectives, they are performance objectives and personal
objectives.2 Performance objectives refer to those goals and activities that !
relate to the individual's position. Personal development goals have to do with increasing the individual's
skills, jog knowledge and potential. MBO programs have the potential to produce major improvements in
individual performances in organizations. Implementation strategies for a MBO program are both important
and difficult. In order for the MBO process to be successful it has to be part of the companies culture.
Every manager should help establish higher level objectives as well as developing his own objectives. This
enables the individual manager to know and understand the goals of his organization as well as his
superior's expectations regarding his performance.
The MBO process involves the employee to participate in establishing goals set by top
management. By having employees participating with management in establishing these goals this helps to
motivate employees to work together in order to meet their objectives. In order to meet their objectives the
goals must be realistic, relevant to the company's goals and they must relate to the individual employee.
Realistic goals should be achievable but with effort in reaching them. Relevant to the company's goals
should be achieved to complement the company as a whole and not as an ego goal for the individual. A
good manager would get to know his employees as well as he could and be able to relate to them and be
able to reward them based on their own individual needs and accomplishments. This is sometimes a hard
process because all individuals are not alike, and a supervisor needs to know how to motivate each person.
He needs to know what that persons individual goals and wants are and !
then he can help him achieve them. Only a good supervisor can do this because it involves additional time
on his part to accomplish this task and also be able to attend to the day to day operations of the department
as a whole.


The four steps involved in establishing a MBO process are:
Specify the objectives to be obtained.
The manager and the employee should draw up a list of objectives that each one feels is important to them
Then the two individuals should review these items and discuss them and formulate a combined action plan
that they both agree to. This process is time consuming because it involves each person to evaluate
themselves as well as trying to establish achievable goals that will relate to the overall goals of the
company. This involves the manager to meet individually with their employees and inform them of
managements plans and to help develop their own objectives. By establishing these objectives with the
employees it increases their job satisfactions and clarifies what is expected of them. It also provides a
measurable objective that the employee is to achieve. This process also helps to make an employee feel that
he is part of the team, and by trying to develop his skills will only benefit him regarding promotions and
advancement within hid job skills.

Establish an action plan that each manager will detail in writing regarding what course of action was
agreed upon and how the objectives will be achieved.
When establishing an action plan the supervisor would sit down privately with his employee and openly
and freely discuss his performance. The supervisor should make the employee feel relaxed and be able to
express himself openly. The supervisor should spend as much time that he feels necessary in