level. Often one goal is required to be completed at one level in order to open the possibilities to the next goal. In essence, the solution of one goal becomes the parameters of the next one. The lower level goals are the defining parameters of the higher level goals, thus making it imperative to go through the entire structure step-by-step. The use of one set of sub-goals as means to achieve the sub-goals at the next level is the essence of this particular style.
Management by Objectives (MBO): in MBO approach, the superior and the subordinate managers jointly identify the common goals and define each department’s major areas of responsibility in achieving the goals. The mutual setting of objectives between each level of management is the essence of this philosophy. The subordinates are given opportunity to set objective for their key areas of responsibility.
Control of people shifts to control over operations in this approach. MBO has the following basic elements:
- Performance feedback: the mutual setting of responsibilities by both supervisor and subordinates makes it possible to use the objectives comparative standards for evaluation the performance of the subordinates.
- Specificity of goals: the employees from all level of the job contribute in coming up with precise goals and mutual setting of objectives and sub-goals as per their respective expertise.
- Mutual decision making between higher and lower levels of management: MBO is result oriented process, which means that the ends completely justify the means, and focus in not laid on the approach taken to solve the problem.
- Pre-defined and non-negotiable time period: since the decisions are taken collectively, the objectives are well known and predefined, with accurate time estimations required to complete the job.
MBO has shown to increase performance and productivity among employees, due to the use of mutually identified goals as a standard for evaluation of performance. The driving factor of MBO is that is assimilates both manager and his employees, thus ensuring a more communicative platform and motivates the employees to provide a better output performance.
The essential steps taken in management by objectives are:
- Clear formulation of overall objectives of the organization.
- Division of resources and workforce and compartmentalizing the goals as per the specific skill set of the concerned department.
- Accurate specifications of each sub-goal due to mutual planning.
- Effective collaboration between all the departments and necessary amendments as per their recommendations.
- Implementation of the decision and periodic review and feedback. Based on the comparative performance analysis, rewards are handed out to the most influential employees, thus effecting overall company performance.
Goal setting steps
A goal has to be good enough to be worth the time and effort spent behind it. So what does a good goal entail? Experts say that a well-written goal can help reduce communicative barriers, and streamline the synchronization of various department working together to reach a common goal. The characteristics of well written goals are:
- They must be outcome oriented instead of actions.
- The goals must provide the manager with a sufficient challenge to make his job interesting, but not so complex that it cannot be feasibly attained within the deadline.
- Proper communication and clarification of goals to all concerned organizational employees is very to maintain efficiency.
- The time duration must be clearly specified to formulate plans accordingly.
Any business decision requires a setting of goals to obtain maximum efficiency while its implementation. Goals remove the ambiguity present in a problem, and provide a clear, concise view to choose the best approach in order to achieve it. So how do managers set goals in big companies? Here are a few pointers:
- Goals should reflect the organization’s mission. A mission provides a guide for what is perceived as important within that organization. Any goals should be formulated while keeping the mission in mind