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Management by objectives

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  1. Introduction
  2. What is Performance Management?
  3. What is MBO?
    1. The process of MBO
  4. Defining organizational goals
  5. Performance evaluation and reviews
  6. Rewards and punishment
  7. Key features of MBO
    1. Limitations
    2. How to implement MBO in an organization
  8. Conclusion
  9. References

Management by Objectives or MBO is a widely embraced management concept that aims at articulating the company's goals into clear and measurable targets and breaking such targets into specific objectives for each individual in the company. Though MBO was initially a tool to facilitate performance appraisals of employees, its scope has now extended much beyond performance appraisals. MBO is now widely used as a tool for strategic planning and exercise managerial control over the work of employees in an enterprise.
What is Performance Management?
Performance appraisal is the systematic, periodic and an impartial rating of an employee's excellence in the matters pertaining to his present job and his potential for a better job.

[...] By continually checking progress along the path of accomplishment at regular intervals, teams and people can easily get back on the right road when they see they have wandered. The monitoring of performance and progress on a continuous basis not only helps in getting things done, but also facilitates frequent reviews and interactions between superiors and subordinates. This helps to maintain harmonious relationships within the enterprise and improves the flow of communications Performance Evaluation and Reviews While monitoring of performance in the MBO system occurs on a real-time and continuous basis, the evaluation and review of performance usually takes place once or twice in a year, or at the end of the time required to fulfill the objectives. [...]

[...] ISBN 0060110953 312/1011/BUSINESS, retrieved A Management by Objectives History and Evolution., retrieved on 2009-04-01 Lawson K. Savery, J. Alan Luks, The relationship between empowerment, job satisfaction and reported stress levels: some Australian evidence. ISSN: 0143-7739,;jsessionid=8544717E 17A310B360272A66B62E7358?contentType=Article&hdAction=lnkhtml&contentId= retrieved on [vii] retrieved on 2009-04-01 [viii] Thomas J. Peters and Robert W. Waterman, Jr. (1982). In Search of Excellence. New York: Harper & Row. p.154. The Goal of Management; from MBO to Deming to Project Management and beyond, retrieved on Cannie, J., (1979). [...]

[...] While this would ensure short-term boost in revenues, and help fulfill the sales targets or objectives for the year, such customers would never deal with the enterprise again.[xii] Even if this is not the case, individuals, focusing on the one-year cycle, may neglect important decisions necessary for the long-term health of the organization.Because of such factors, an analysis of 185 studies for the effects of MBO on employee productivity and/or job satisfaction found MBO to be ineffective.[xiii] The Systems Approach Over the years, many people have proposed many changes to the system of MBO proposed by Peter Drucker. [...]

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