Management by objective

MBO
By srinjay bajpayee
 Goal-Setting Theory
 Many believe that everyone already sets
goals
 But this is not true
 When groups do set goals, output
invariably increases over groups that do
not set goals.
 Goal setting and incentives
 Incentives improve performance – but
 Only if they cause individuals to set and
commit to attaining specific goals
 Why does goal setting effect
performance?
 Goals focus activity
 Goals regulate expenditure of effort
 Difficult goals lead to more persistent
effort than do easy goals
 These 3 are critical to the MBO process
 What is MBO?
 We set goals and then performance is
judged based on how well we
accomplish these goals.
 Intellectually – this seems like the way
to go – and has for years
 But?
 The goals must be:
 Mutually agreeable to employee and
supervisor
 Demanding (stretching) but achievable
 Within the control of the employee
 Reviewed periodically for modifications
based on events
 The goals must also be:
 Clearly defined
 Simple to understand
 Written
Problems with MBO programs
 Employees get systematically more
credit or blame than deserved
 Bias still exist in rating.