Roopali Deshmukh understood the specific objectives of her job and how these objectives and how these objectives fit in with the overall objectives set by the board of directors. Subsequently, she implemented the MBO process as a measure to improve the productivity of her sales team. Effective planning and consistent monitoring on her part as well as the team resulted in the successful implementation of the process. The phases of the MBO process which led to the successful accomplishment of the goals, are hereby discussed: The top management instructed the targets, which set the overall organizational goals and communicated them to the people down the hierarchy. As the marketing manager of the company, having daunting targets to achieve, Roopali initiated the MBO program, inviting participation from her sales team to increase organizational performance by aligning goals and subordinate objectives throughout the organization.
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The management did not interfere much with the means of achieving the objectives & gave adequate autonomy to its employees in the lower hierarchy to implement progress & achieve their plans. She examined the current state of affairs, the levels of efficiency of her team, identifying the opportunities and threats that might have a subsequent impact, thus identifying the key result areas to be attained. She motivated the team to decide on their individual roles and responsibilities to achieve the same, and thus the company’s targets. The objectives for each member of the team were mutually set & agreed upon, in context with the company targets decided by management.
The next phase involved setting specific time frames with respect to achieving the set objectives, post which plans were laid down on the consistently monitoring the performance over the set goals/objectives. Deshmukh effectively and consistently monitored the individual performance of each of her team member in line with the pre-determined plans, while providing positive feedbacks to the team members for their contributions to the company targets. Such a regular monitoring and periodic review helped not only provide feedback, which is essential for completion of work in time, but also motivated the team and eachof the member accountable for his/her objectives.
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It was ensured on consistent basis, that if there were any deviations from the pre-determined plans/objectives decided by the team, corrective actions were taken to fix them and overcome the deficiencies. The long term organisational targets as laid down by the top managementwere accomplished subsequently by the team as a consequence of the MBO program, which basically being a form of participative management additionally helps and encourages the employees as it gave them a sense of belongingness in the company, for the management recognizes their effort and participation in the accomplishment of the organisational goals.
Management by Objectives (MBO), a term popularized by the famous management guru and author, Peter Drucker in his book “Practices of Management” (Drucker, 1954) is a democratic and participative style of management, in the sense that it “requires the managers/employees to set specific objectives to be achieved in the future and encourages them to continually ask what more can be done, is offered as a partial answer to this question of organizational vitality and creativity” (Thomson, n.d.). In simple terms, MBO is a process or system designed for supervisory managers in which a manager and his or her subordinate come together and jointly set specific objectives to be accomplished within a set time frame and for which the subordinate is then held directly responsible (Thomson, n.d.). MBO involves setting up short-term goals for employees in line with the long-term objectives of the organization. MBO is thus an effective tool for planning, control and development in the organisation.
The MBO Process
The essential steps or elements in the process of management by objectives are hereby discussed: Management
The first phase in the MBO process involves “reviewing” the targets/goals laid down by the top management, which are then passed down from one subordinate level to another. The MBO approach injects an element of dialogue into the process of passing plans and objectives from one organizational level to another. The MBO program is initiated by the top management, which sets the overall organizational goals and communicated them to the people down the hierarchy. Setting Employee / Subordinate Objectives
The subordinates then collectively develop a group of specific goals, measures of achievement, and time frames in which the subordinate commits himself or herself to the accomplishment of those goals. The subordinate is then held responsible for the accomplishment of the goals (Jossey-Bass/Pleiffer, 1998). Develop plan of action
After fixing the objective, the subordinate and superior make an action plan, which will be used by the subordinates to achieve the objective. It requires assignment of specific responsibilities to different departments, division, and individuals. It also requires allocation of necessary resources needed to perform the assigned responsibilities. It also involves setting specific time frames to achieve the set objectives without delays (Daffodil University, 2009). Periodic Review and Monitoring the progress
The subordinates/ team members then evaluate/measure their own performances in line with the predetermined targets/ objectives, so as to fix the deviations and take corrective actions for the same. Performance Appraisal
The last step in the process involves performance appraisal of the subordinates/employees evaluated based on the objectives/targets. The employees are rewarded and provided feedback based on their performance, which helps motivate them as the management recognizes their effort and appraises them foe their participation and involvement.
Advantages of the Management by Objectives Process:
Develops result-oriented philosophy: MBO is a result-oriented philosophy. Managers develop specific individual and group goals, develop appropriate action plans, properly allocate resources and establish control standards. It provides opportunities and motivation to staff to develop and make positive contribution in achieving the goals of an Organisation (Marketing World, 2012). Better communication and Coordination: Recurrent reviews and communications between managers and subordinates helps to maintain congruous relations within the enterprise and also solve many problems faced during the period. Motivation: Involving employees in the whole process of goal setting and increasing employee empowerment increase employee job satisfaction and commitment.
This subsequently helps in increasing the employee morale, which has a significant impact on the organisation’ functioning. Effective control: Performance evaluation and monitoring is an integral element of the process of MBO, which is significant for achieving the organisational objectives. Actual performance can be measured against the standards laid down for measurement of performance and deviations are corrected in time. A clear set of verifiable goals provides an outstanding guarantee for exercising better and effective control in the hierarchy (Marketing World, 2012). Expedites personal leadership: MBO enables individual manager to cultivate personal leadership and skills significant for efficient management of activities of a business unit.See More on Management