MBO

MBO means management by objective Introduced by peter drucker in 1996 mbo is primarily a corporate performance system Click to edit Masterindividual efforts and link upto subtitle style This method is useful for mostly middle and senior management levels

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DEFNITION
A system wherein the superior and the subordinate managers of an organisation jointly define their common goals , define each individuals major areas of responsibility in terms of result expected of him and use these measures are guides for operating the units and assessing the contribution of each of its members -George Odiorne

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MBO PROCESS
Establishing clearly and precisely defined statements Developing an action plan to meet objectives Implementation of plan Measurement of objectives Taking corrective action when it require Establishing new objectives for future
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MERITS
Establishes link between organisational and

individual performance
Easy to implement and measure Measures performance and not personality of

employees
Employee motivated as as he is aware of

expected roles and accountability

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Demerits
Emphasis job completion rather than the

quality of a job
Difficult to have employee agree on goals Misses intangible like honesty, integrity,

quality etc.
Interpretation of goals may vary from manager

to manager, and employee to employee

Time consuming, complicated, lengthy and
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expensive

Critical Incident Method

These critical incidents are used as criteria for evaluatingemployees performance Under this method ,an appraiser keeps a diary to record critical incidents involving effective and ineffective job behaviours.Appraisers pay attention to exceptional behaviours in some performance areas at different times.
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MERITS
More objective basis on evaluating

performance
Easy to give feedback on merits Observe job specific behaviours Opportunity for employees to develop

themselves

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Demerits
Time consuming and cumbersome for

appraisers
Lacks employees involvement in setting

performance stendards
No empirical evidence of its reliability and

validity, as manager sets the standard

Interpretation about the criticality of an

incident may vary from manager to manager

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