2.
Explanation
Management by Objectives (MBO) is a management process that aims to improve organizational performance by defining specific objectives that are agreed upon by both management and employees. Here’s the process of Management by Objectives:
1. Goal Setting: The process begins with top-level management defining the organization’s overall goals and objectives. These should be specific, measurable, achievable, relevant, and time bound (SMART).
2. Department and Individual Objectives: These high-level goals are then broken down into departmental or functional objectives. Each department or team sets its own objectives in alignment with the organizational goals. Similarly, individual employees define their own objectives that contribute to the departmental objectives.
3. Participation and Communication: It’s essential to involve employees in this process. Managers and employees collaborate to set objectives. Clear communication is crucial to ensure everyone understands their roles in achieving the objectives.
4. Monitoring and Measurement: Regularly track progress towards achieving the defined objectives. Key performance indicators (KPIs) and metrics are used to measure success. If necessary, adjustments can be made to stay on track.
5. Performance Appraisal and Feedback: Periodic performance reviews are conducted to assess employees’ progress and performance against their objectives. Feedback is provided to help employees improve and make any necessary adjustments.
6. Rewards and Recognition: Employees who meet or exceed their objectives are often rewarded or recognized for their achievements. This can be in the form of bonuses, promotions, or other incentives.
7. Continuous Improvement: The MBO process is ongoing. After the objectives are met or revised, the cycle starts again. Lessons learned from previous cycles are used to improve goal-setting and performance.
8. Review and Evaluation: At the end of a defined period (often annually), there is a formal evaluation of the entire MBO process to assess its effectiveness and make any necessary adjustments for the next cycle.
Conclusion: MBO is a structured approach to management that focuses on setting clear objectives and aligning individual and team efforts with organizational goals. It helps improve communication, motivation, and accountability within an organization.