Anna Marie M.

Revisado BA 104 Fri, November 10, 2017

Management by Objective (MBO)

Management by objective is a management style that transforms the overall organizational

goals into clear-cut list of tasks designed to help reach the goal, taking it one step at a time. Its six

steps (which goes into a cycle) are: (1) Defining organizational goals. This requires input from the

top management about what they think could be achieved within a certain period. (2) Defining

employees objectives. This requires input from the employees about what they think they could

achieve within that certain period. (3) Continuous monitoring of performance and progress. Once

the objectives have been established, it is not only implemented but also monitored from time to

time whether it is following the right path, whether it be increase in sales, etc. (4) Performance

evaluation. At the end of the timeframe set, concerned managers shall assess the difference

between expectations and reality. (5) Providing feedback. Once the difference has been identified,

feedback could now be formulated in order to suggest improvement in the next cycle, whether it

be for the objective-setting or the implementation itself.

(6) Performance appraisal. This occurs last in every MBO cycle, and pertains to the

evaluation of the performance of employees. This is relevant because evaluation of the overall

performance of the organization is not enough; it must also extend to the employee level so that

they would really feel that they are part of the picture and that their contribution is important.

Performance appraisal usually incorporates the leadership and incentive system in carrying

itself out. What results from the performance appraisal could mean promotion or additional

economic benefits for the employee. Not only is this a good motivation for the employee to help

the organization reach its goals but it is also essential for the employees own self-esteem matters.