Management by Objectives - Wikipedia, The Free Encyclopedia
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Management by objectives From Wikipedia, the free encyclopedia Management by objectives (MBO), also known as managemen t by results(MBR), is a process ofdefining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization in order to achieve them. The te rm "management by objectives" was first popularized by Peter Drucker in his 1954 book The Practice of Management. [1] The essence of MBO is partic ipative goal setting, choosing course of actions and decision making. An important part of the MBO is the mea surement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfill their responsibilitie s. According to George S. Odiorne, the system of management by objectives can be described as a process whereby the superior and subordinate jointly identify its common goals, define e ach individual's major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of i ts members. [2] Contents 1 Five steps of MBO process 2 Features and advantages 3 Domains and levels 4 Practice 5 Limitations 6 Arguments against 7 See also 8 References Five steps of MBO process The MBO process consists of five steps: Review organizational objectives: The manager gains a clear understanding of organizational's overall objectives. 1. Set worker objectives: The manager and worker meet to agree on worker objectives to be reache d by the end of normal operating period. 2. Monitor progress: At periodic intervals during the normal operating period, the ma nager and workercheck to see if the objectives are being reached. 3. Evaluating performance: At the end of normal operating period, the worker's performance is judged by the extent to which the worker reached the objective. 4. Give reward: Rewards given to the worker are based on the extent to which the objectives were reached. 5. Management by objectives - Wikipedia, the f ree encyclopedia http://en.wikipedia.or g/wiki/Management by objectives 1 of 4 1/23/2015 10:30 AM
