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MBO: Setting Goals in Key Result Areas

Management by Objectives (MBO) is an approach where managers set goals for employees that are specific to their roles and aligned with organizational objectives. This helps employees understand expectations and feel accountable. MBO can improve teamwork but risks ignoring workplace context and overemphasizing goals at the expense of employee development. Key considerations include ensuring goals are appropriately set and controlled to prevent misinterpretation.

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Samyuktha Rao
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11 views2 pages

MBO: Setting Goals in Key Result Areas

Management by Objectives (MBO) is an approach where managers set goals for employees that are specific to their roles and aligned with organizational objectives. This helps employees understand expectations and feel accountable. MBO can improve teamwork but risks ignoring workplace context and overemphasizing goals at the expense of employee development. Key considerations include ensuring goals are appropriately set and controlled to prevent misinterpretation.

Uploaded by

Samyuktha Rao
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Benefits of Management by Objectives

 Management by objectives helps employees appreciate their on-the-job roles and


responsibilities.

 The Key Result Areas (KRAs) planned are specific to each employee, depending on their
interest, educational qualification, and specialization.

 The MBO approach usually results in better teamwork and communication.

 It provides the employees with a clear understanding of what is expected of them. The
supervisors set goals for every member of the team, and every employee is provided with a
list of unique tasks.

 Every employee is assigned unique goals. Hence, each employee feels indispensable to the
organization and eventually develops a sense of loyalty to the organization.

 Managers help ensure that subordinates’ goals are related to the objectives of the
organization.

Limitations of Management by Objectives

 Management by objectives often ignores the organization’s existing ethos and working
conditions.

 More emphasis is given on goals and targets. The managers put constant pressure on the
employees to accomplish their goals and forget about the use of MBO for involvement,
willingness to contribute, and growth of management.

 The managers sometimes over-emphasize the target setting, as compared to operational


issues, as a generator of success.

 The MBO approach does not emphasize the significance of the context wherein the goals are
set. The context encompasses everything from resource availability and efficiency to relative
buy-in from the leadership and stakeholders.

 Finally, there is a tendency for many managers to see management by objectives as a total
system that can handle all management issues once installed. The overdependence may
impose problems on the MBO system that it is not prepared to tackle, and that frustrates
any potentially positive effects on the issues it is supposed to deal with.

Key Takeaways

 Management by Objectives (MBO) is an approach adopted by managers to control their


employees by implementing a series of concrete goals that both the employee and the
organization aim to accomplish in the immediate future and work accordingly to achieve.
 The MBO approach is implemented to ensure that the employees get a clear understanding
of their roles and responsibilities, along with expectations, so that they can understand the
relation of their activities to the overall success of the organization.

 If the management by objectives strategy is not adequately set, decided upon, and
controlled by organizations, self-centered workers can be likely to misinterpret results,
wrongly portraying the achievement of short-term, narrow-minded goals.

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