Define
management by objectives (MBO) and list four elements of this type of goal
setting. What are some problems associated with this approach?
Answer
Management
by objectives (MBO) is a management system in which specific performance goals
are jointly determined by employees and their managers, progress toward
accomplishing these goals is periodically reviewed, and rewards are allocated
on the basis of this progress. Rather than using goals only as controls, MBO
uses them to motivate employees as well. Management by objectives consists of
four elements: goal specificity, participative decision making, an explicit
time period, and performance feedback. Its appeal lies in its focus on
employees working to accomplish goals they have had a hand in determining. One
problem is that MBO may not be as effective in times of dynamic environmental
change. Under an MBO program, employees need some stability to work toward
accomplishing the set goals. If new goals must be set every few weeks, there’s
no time for employees to work on accomplishing the goals and measuring that
accomplishment. Another problem of MBO programs is that an overemphasis by an
employee on accomplishing his or her goals without regard to others in the work
unit can be counterproductive. A manager must work closely with all members of
the work unit to assure that employees aren’t working at cross-purposes.
Finally, if MBO is viewed simply as an annual exercise in filling out
paperwork, employees won’t be motivated to accomplish the goals.
Source:
Management, 11e (Robbins/Coulter)
