Management By Objective

1. Seminar
on
management by objective
PRESENTED BY :
Ms. Jyotashri S. Atre
M.sc final year

2. INTRODUCTION
Management by objective (MBO) is a strategic
management model that aims to improve the performance of an
organization by clearly defined objectives that are agreed to by
both management and employees. According to the theory ,
having a say in goal setting and action plan encourages
participation and commitment among employees, as well as
aligning objectives across the organization.

3. DEFINITION :
Management By Objectives (MBO) can
be defined as a process whereby the employees and the
superiors come together to identify common goals, the
employees set their goals to be achieved, the standards
to be taken as the criteria for measurement of their
performance and contribution and deciding the course of
action to be followed.

4. Cont...
Management by Objectives (MBO) is a
process of agreeing upon objectives within an
organization so that management and employees
agree to the objectives and understand what they are
in the organization.
The term "management by objectives"
was first popularized by Peter Drucker in his 1954
book 'The Practice of Management'

5. MAIN CONCEPT
The principle behind Management by
Objectives (MBO) is to make sure that everybody
within the organization has a clear understanding of
the aims, or objectives, of that organization, as well
as awareness of their own roles and responsibilities
in achieving those aims.
The complete MBO system is to get
managers and empowered employees acting to
implement and achieve their plans, which
automatically achieve those of the organization.

6. OBJECTIVE
1. To Measure and judge
performance.
2. To relate individual
performance to organizational
goals

7. 3. To clarify both the job to be
done and the expectations of
accomplishment
4.To foster the increasing
competence & growth of the
subordinates

8. 5. To enhance communication
between superior &
subordinates
6. To serve as a basis for
judgment about salary &
Promotion

9. 7. To stimulate the subordinate‘s
motivation.
8. To serve as a device for
organizational control &
Integration

10. MBO STRATEGY
• All individuals within an organization are assigned a
special set of objectives that they try to reach during a
normal operating period.
• Performance reviews are conducted periodically to
determine how close individuals are to attaining their
objectives.
• Rewards are given to individuals on the basis of how
close they come to reaching their goals.

11. PRINCIPLES
Setting
Goals
Together
Periodically
Evaluation
Support
from
Superior

12. The Smart Method Clarity of goals – With MBO,
came the concept of SMART goals i.e. goals that are:

13. PROCESS OF MBO :
Central Goal
Setting
Individual
Goal Setting
Progress
Monitor
Performance
Appraisal
Achievers
Reward
Providing
feedback.

14. 1. Central Goal Setting :-
Goal are critical issue to organizational
effectiveness , and they serve a number of purposes.
Organization also have a several kind of goals, all of which
must be appropriately managed. The goals set by the
superior are primarily , based on an analysis and judgement
as to what can and what should be accomplished by the
organization within a certain period.

15. 2. Individual Goal Setting :-
First consider what you want to achieve ; set SMART
( specific, measurable , attainable , relevant and time bound.)
goal that motivates you and write them down to make them
feel tangible , then plan the steps you must take to realize your
goal and cross off each one as you work through them.

16. 3. Progress Monitor :-
MBO process is not only essential for
making line mangers in business organizations more
effective but also equally important for monitoring
the performance and progress of employee.

17. 4. Performance Appraisal :-
Performance appraisal are a
regular review of employee performance within
organizations , it is done at the last stage of MBO
process.

18. 5. Achievers Reward :-
Provide the reward for the better
performance to improve the performance to achieve the goal
and objectives of organization.

19. 6.Providing feedback :-
MBO program are continuous
feedback on performance and goals that allow individual
feedback on performance and goal that allow individual to
monitor and correct their own action. This continuous feedback
is supplemented by periodic formal appraisal meeting in which
superior and subordinate can review progress toward goals ,
which lead to further feedback.

20. ADVANTAGES OF MBO
• Formulation of dearer goals
• Develops result-oriented philosophy
• Facilitates objective appraisal
•Raises employee morale

21. •Facilitates effective planning.
•Acts as motivational force.
•Facilitates effective control
•Basis for organizational change
•Facilitates personal leadership.

22. LIMITATIONS
•Time-consuming
•Failure to teach MBO philosophy
•Reward-punishment approach
•Increases paper-work
•Creates organizational problems
•Develops conflicting objectives
•Problem of co-ordination
•Lacks durability Problems related to goal
setting.
•Trained managers are not available
•Pressure oriented
•Lack of appreciation
•Inflexibility

23. HOW TO MAKE MBO EFFECTIVE?
 Support from all.
 Acceptance of MBO programme by managers
 Training of managers
 Purpose
 Organizational commitment
 Allocation of adequate time and resources
 Provision of uninterrupted information feedback
 Politics
 participation

24. IMPLICATIONS IN NURSING
 It measures and judge performance
 It correlates individual performance to organizational goals.
 It clarifies the job responsibility expected from the staff
 It fosters the increasing competence and growth of the
subordinates
 It provides a data base for estimating the salary and promotion
 It stimulate subordinate’s motivation
 It help in organizational work control and integrating the
activities.

26. CONCLUSION
MBO is used for different purposes. Some organizations use
MBO to clarify the employee’s job , others use it to motivate
employees while still other organizations apply MBO as a performance
control mechanism to check performance. In this way MBO process is
directly related to all the major functions of management. Thus, MBO
is a result-oriented and rational philosophy. It permits management by
results in place of management by crisis. Many organizations both in
the private sector and the public sector have benefited a lot through the
application of MBO

27. SUMMARY:
Today we have discus about the definition
of MBO ,the main concept of MBO, the objectives of
MBO , the strategy of MBI , the principle of MBO ,
the process of MBO , the advantages of MBO , the
limitation of MBO , how to make MBO effective .