Archives For Management By Objectives

Too many businesses have built a massive chasm between the top brass in the company and the management and employees that they oversee. When that happens, the company goals can fall through the gaps that have been created, leaving the majority of the organization unclear of the path they are supposed to be following. The companies that do well tend to use goals and objectives management to ensure that everyone in the company is kept in the loop, no matter how small their role within the organization may be.

What goals and objectives really do is change the way in which everyone in the organization thinks about their job. Too many managers focus on putting out small fires that occur every day, as opposed to keeping everyone on the road to the company goals. When you manage in the short term, you lose sight of the end goal. This usually happens because time and resources are shifted to the perceived crisis of the moment, which does nothing but hurt the long term goals. Management by Objectives instill a results-oriented philosophy were everyone knows the part they play in attaining goals and follows the road ahead without any sort of deviation.

In order for Management by Objectives to work, everyone in the organization must work together to put a plan in place where the goals and objectives can be clearly verified and measured. The plan should accommodate any problems that have been common in the past, with resources put in place to clear those hurdles should they arise again moving forward. Goals and objectives management allows every employee to feel as though they are paying a major role in the decisions that affect not only their own job, but the health of the company overall. When people feel as though their roles are important, it tends to lead to a stronger focus on those goals, with the realization that their input is a part of the company’s success.

A happy workforce usually results in positive results, but Management by Objectives doesn’t simply mean letting employees loose with no checking in on their performance. It’s the manager’s role to ensure that every employee has the resources he or she needs to succeed to help the company meet its goals, but they also have to be held accountable for their actions in the workplace. Just a few underperforming employees can steer the company off course unless they are checked by management and given a clear idea of what is expected from them.

The end result of goals and objectives management is more than just the company meeting all of the goals that it sets. It empowers everyone in the organization and makes them want to contribute more to the cause. Morale spikes upwards when that happens, as does the creative output of each and every person involved in the company. Leader can be born and cultivated throughout this process, ensuring the competitiveness of the business as a whole in the years to come.

Management by objectives works if you first think through your objectives. Ninety percent of the time you haven’t.

Peter Drucker

There are some limitations of Management by Objectives, here are some of the pitfalls and issues:

Time-consuming: Management by Objectives is incredibly effective, but it can take up an inordinate amount of time. The process of setting objectives is not something that tends to happen quickly. Regular meetings are required in order to assess just how well the system is working, all of which chew up even more time.

Reward-punishment approach: Management by Objectives can create a situation where a great deal of pressure is put on employees. Since the process means constantly reaching goals, employees that fall behind the timeline are subject to penalty, while those who do well are rewarded. This reward-punishment method can create a high level of stress on certain members of the team.

Increases paper-work: It’s easy for an organization to become weighed down under the avalanche of paperwork that comes with employing the Management by Objectives method. It’s not just the training manuals, newsletter, and instruction booklets that pile on the paper, it’s also the inordinate amount of progress paperwork and reports that employees are expected to submit that adds to the weight.

Creates organizational problems: Too many organizations fall into the trap of believing that Management by Objectives is the cure for all that ails. They fail to see that there are a definite set of problems that can come with it. One of the most common is that employees will try to keep targets as simple as possible, whereas upper management will shoot for the stars. This wide gap in expectations can make it difficult to find a common ground in the middle. The program can also instill fear in employees as it is so closely tied to performance.

Management by Objectives develops conflicting objectives: The goals and objectives of each individual within the organization may not mesh with that of other employees, which is particularly true when there are multiple departments. Each department will have their own ideas of success, which they may feel is different from the rest, all of which creates conflict.

Problem of co-ordination: A number of problems can pop up when it comes time to coordinate the company objectives across multiple departments. Since each department has their own goal ideas, they may set unrealistic goals in order to undermine others.

Management by Objectives lacks durability: When MBO is first introduced, it tends to generate a lot of excitement. That can fizzle out over time as the method starts to become tired. It’s such a simple process, but also one that doesn’t really leave space for new opportunities.

Problems related to goal setting: MBO works best when everyone is on the same page and find the goals set to be mutually agreeable. That can all fall apart when the goals are considered to be too rigid or when they are particularly difficult to set. There can also be major problems if employees start to believe that the goals in place are more important than they are, or of they feel that short-term goals have taken the place of the long-term health of the company.

Lack of appreciation: While the purpose of Management by Objectives is to involve everyone in the goal setting of the organization, it can still fail if the goals are not properly passed down the chain. It may be that executives fail to fill in all the details of the company objectives to management. It can also hit a snag if management do not delegate properly or motivate accordingly.

The advantages of Management by Objectives, far outweigh the limitation of Management by Objectives.