STEPS IN MANAGING BY OBJECTIVES

Setting of organizational objectives Formulation of departmental objectives Establishing goals or targets of subordinates Establishing check-points or key result areas Follow up and periodic review of progress Appraisal of performance and counseling

1.

SETTING OF ORGANIZATIONAL OBJECTIVES This is the first step in MBO to establish verifiable objectives for the organization as a whole. To set the objectives a detailed assessment has to be made of the various resources. Proper forecasts should be made to estimate the demand and the business conditions in the country.

2.FORMULATION OF DEPARTMENTAL OBJECTIVES

Top management must determine the objectives of every department. Top management should discuss the objectives with the departmental managers, so that statement of agreed objectives may be evolved.

3. ESTABLISHING GOALS OR TARGETS OF SUBORDINATES Each subordinates sets the goals of his job and discusses the same with the superior. Once the process is complete, there will exist a meeting of minds of each superior and his subordinates as to what is to be accomplished and why is it to be accomplished.

4. ESTABLISHING CHECK-POINTS OR KEY RESULT AREAS MBO calls for periodic meetings between the superiors and the subordinates to review the progress towards the accomplishment of targets of the subordinate. Superiors must establish check points for evaluating the progress of the subordinate.

5. FOLLOW UP AND PERIODIC REVIEW OF PROGRESS The superior must make a periodic review of the progress in achieving the subordinates targets. He should call meetings to identify the problems faced by the subordinates and taking appropriate steps.

6. APPRAISAL OF PERFORMANCE AND COUNSELING It can be of formal or informal appraisal. The performance of every individual is evaluated in terms of the standards or endresults clearly agreed upon by the superior and the subordinate. The superior will discuss with the subordinate the ways to remove deficiencies in performance and advice him as to how to increase the efficiency.

It is difficult to judge the performance of individuals where the objectives cannot be set in quantitative terms.

In MBO goals are set only for a short period of time.

It requires far reaching changes in traditional thinking and practices. Lack of training and knowledge on the part of the supervisors in implementing the programme. Lack of follow-up by the superior at the appropriate time.

Since goals are set after every six months the supervisor may not like to modify them in between because of fear of resistance from the subordinates.

MBO is not appropriate for all levels and for everyone . it is suitable only where both managers and subordinates feel comfortable with it.

It is costly and time consuming.