B.S Ist semester

1. 01/22/16 LAU - HRI / The Second HR Workshop1
THE NATURE & PURPOSE OFTHE NATURE & PURPOSE OF
MBOMBO
• MBO is concerned with goal setting and planning
for individual managers and their units.
• The essence of MBO is a process of joint goal
setting between a supervisor and a subordinate.
• Managers work with their subordinates to
establish performance goals that are consistent
with higher organizational objectives.
• MBO helps clarify the hierarchy of objectives as a
series of well-defined means-ends chains.

2. 01/22/16 LAU - HRI / The Second HR Workshop2
THE NATURE & PURPOSE OFTHE NATURE & PURPOSE OF
MBOMBO
• MBO is concerned with goal setting and planning
for individual managers and their units.
• The essence of MBO is a process of joint goal
setting between a supervisor and a subordinate.
• Managers work with their subordinates to
establish performance goals that are consistent
with higher organizational objectives.
• MBO helps clarify the hierarchy of objectives as a
series of well-defined means-ends chains.

3. 01/22/16 LAU - HRI / The Second HR Workshop3
Model of the MBO Process
Step 1: Setting Goals Step 2: Developing Action Plans
Step 3:
Reviewing Progress
Corporate Strategic Goals
Departmental goals
Individual goals
Step 4: Appraising Overall
Performance
Appraisal Of Overall Performance
Corrective Action
Review Progress
Action Plans

4. 01/22/16 LAU - HRI / The Second HR Workshop4
THE PROCESS OF MBO
S ta r tin g th e
M B O
P r o g r a m
E s ta b lis h m e n t o f
O r g a n iz a tio n a l
G o a ls a n d
P la n s
C o lla b o r a tiv e
G o a l S e ttin g
a n d P la n n in g
R e s o u r c e s
C o u n s e lin g a n d
C o a c h in g
V e r if ia b le
G o a ls a n d
C le a r P la n s
M e e tin g
C o m m u n ic tin g
O r g a n iz a tio n a l G o a ls
a n d P la n s
P e r io d i c
R e v ie w
E v a lu a t io n

5. 01/22/16 LAU - HRI / The Second HR Workshop5
THE MBO PROCESS
• If MBO is to be successful, it must start at the top
of the organization top managers must
communicate why they have adopted MBO, what
they think it will do, and that they are committed
to it.
• Employees must be educated about what MBO is
and what their role in it will be.
• Managers must implement MBO in a way that is
consistent with overall organizational goals.

6. 01/22/16 LAU - HRI / The Second HR Workshop6
THE MBO PROCESS
• Collaborative goal setting and planning are the
essence of MBO. This involves several steps:
Managers tell their subordinates what organizational
and unit goals and plans top management has
established.
Managers meet with their subordinates on a one-to-one
basis to arrive at a set of goals for each subordinate that
both develop and to which both are committed.
Goals are refined to be as verifiable as possible and
achievable within a specified period of time.

7. 01/22/16 LAU - HRI / The Second HR Workshop7
THE MBO PROCESS
Goals must be written and very clearly stated.
Plans developed to achieve the goals must directly
relate to each goal managers must play the role of
counselors in the goal-setting and planning meeting.
The meeting should specify the resources that he
subordinate will need to implement his/her plans and
work effectively toward goal attainment.

8. 01/22/16 LAU - HRI / The Second HR Workshop8
THE MBO PROCESS
• Conducting periodic reviews as subordinates are
working toward their goals is advisable.
• At the end of the period, the manager meets with
each subordinate to review the degree of goal
attainment. The reasons for both success and
failure are explored. The employee is rewarded on
the basis of goal attainment.

9. 01/22/16 LAU - HRI / The Second HR Workshop9
THE EFFECTIVENESS OF
MBO - STRENGTHS
• Organizations create a powerful motivational
system for their employees by adopting MBO.
• Through the process of discussion and
collaboration, communication is greatly enhanced.
• With MBO performance appraisal may be done
more objectively.
• MBO focuses attention on appropriate goals and
plans.

10. 01/22/16 LAU - HRI / The Second HR Workshop10
THE EFFECTIVENESS OF
MBO - STRENGTHS
• MBO helps identify superior managerial talent for
future promotion.
• MBO provides a systematic management
philosophy that can have a + effect on the overall
organization.
• MBO facilitates control through the periodic
development and subsequent evaluation of
individual goals and plans.

11. 01/22/16 LAU - HRI / The Second HR Workshop11
THE EFFECTIVENESS OF
MBO - WEAKNESSES
• The major reason for MBO failure is lack of top
management support after deciding using it, its
implementation is delegated to lower management
goals and plans cascading throughout the
organization may not be those of top management.
• Some firms may overemphasize quantitative
goals and burden their systems with too much
paper work and record keeping.

12. 01/22/16 LAU - HRI / The Second HR Workshop12
THE EFFECTIVENESS OF
MBO - WEAKNESSES
• Some managers will not or cannot sit down and
work out goals with their subordinates they
“assign” or “suggest” goals and plans to their
people resentment and lack of commitment to
the MBO program.
• MBO well articulated objectives clarity of
purpose, but also a certain rigidity organization
must be flexible to survive more fluid and
yielding objectives loss of clarity.

13. 01/22/16 LAU - HRI / The Second HR Workshop13
MBO Benefits and Problems
Benefits of MBO Problems with MBO
1. Manager and employee efforts
are focused on activities that will
lead to goal attainment.
2. Performance can be improved at
all company levels.
3. Employees are motivated
4. Departmental and individual
goals are aligned with company
goals.
1. Constant change prevents MBO from
taking hold.
2. An environment of poor employer-
employee relations reduces MBO
effectiveness.
3. Strategic goals may be displaced by
operational goals.
4. Mechanistic organizations and values
that discourage participation can
harm the MBO process.
5. Too much paperwork saps MBO
energy.