Mbo

Introduction

For this assignment I have chosen to expand on the topic of managing performance, namely, management by objectives.

After further study of performance management systems, I felt a keen interest and familiarity with the idea of this results method of review. My intention is not to compare methods (results, trait, and behavior) and say one way is better than another. My first impression though, is that a results method does have the interests of the organization in mind over the others. But again, I am not making an argument for either method. Particularly, what I do like about management by objectives is that it aligns the role, duties, and tasks of an employee to the objectives of the organization; using goals as the catalyst to meet those objectives. Goal setting is something I have believed in for some time, personally and professionally. Within this assignment I plan to delve deeper into management by objectives, state my personal thoughts on the subject, weigh its pros and cons, and build on my personal and business foundation.

First let us define management by objectives (MBO); Gary Dessler and Fredrick A. Starke in their book Management, Principles and Practices for Tomorrow’s Leaders, (Second Canadian Edition) define MBO as: A technique in which the supervisor and subordinate jointly set goals for the latter and periodically assess progress toward those goals. Wikipedia.org similarly defines MBO as: a process of agreeing upon objectives within an organization so that management and employees agree to the objectives and understand what they are. To me, both definitions sound like a fun and proactive method that can become empowering to an employee. Anyone who has set a goal, big or small, and achieved it feels a sense of empowerment. This could be as big as planning to run a marathon in the coming year, or just setting a goal to lose a few pounds after the holidays. Assuming an employee does not have any behavior issues, wants to work for their company, and has the skills to do the tasks; MBO becomes quite powerful as a strategic planning method as well as a performance enhancer. MBO can add a sense of direction and worth to an employee. But is MBO a magic pill to cure performance issues?

The fact that MBO was first popularized in 1954 (by Peter Drucker in his 1954 book “The Practice of Management”) and be it that it’s now 2008 and we are still marred by a plethora of management issues hints at the limitations of MBO.

One limitation of MBO is that it could implicitly or even explicitly force an employee to engage in unethical behavior to achieve objectives. Circumstances where this becomes an issue usually arise when a manager sets unrealistic objectives for employees. Pressure to meet tough objectives becomes a heavy burden on any worker; the sales industry comes to mind. Personally, I don’t see this as a limitation of MBO, but a problem of ethics that are either a characteristic of the organization, supervisor, or even the employee. If this were the case of a MBO system failure, it would not matter, as the unethical behavior would eventually manifest in other systems (if they were used). Genuine support by top-management (a core management technique) should not be lost due to the implementation of MBO. Though goal setting techniques (S.M.A.R.T.) are out of scope for this assignment; what is relevant is that goals should trickle down from the executive to each subordinate level. Having achievable objectives will limit the possibility of employees being disillusioned by the prospect of an assignment or task.

Another limitation of MBO is lack of engagement. This would be a tremendous detrement to MBO, since this would undermine the employee. A supervisor who does not engage someone in their goals often takes away the sense of ownership the employee should feel towards their objectives being set. Proactive can quickly turn to sloth when one feels no attachment to their goals. Communication and an open atmosphere are key for MBO to succeed. Poor communication being a common theme in many of today’s workplaces, a MBO system faces some tough challenges. This is also why many experts believe the problems with MBO stem from the users, not from the system.

Being a limited assignment, I plan to only touch on some of the limitations of MBO. Like any tool used by people (and personalities), there will be flaws; by admitting this, we can manage its risks and improve the system.

Drucker emphasizes thinking of MBO as a philosophy, not as a rigid sequence of steps. This idea of MBO appeals to me since you are practicing a technique that should feel more like “common sense” than a managerial process. We all have examples