Advantages of Management by Objectives are many, primarily aligns the company goals and objectives with the employees. Here are some others:
Management by Objectives develops a result-oriented philosophy: The Management by Objectives (MBO) process is all about the delivery of results (outcome) as opposed to management by crisis (MBC)). While managers are expected to develop goals and objectives; action plans and provide their people with the resources they need, employees are expected to do their part by making positive contributions towards the organizational goals.
Formulation of clearer goals: In many organizations, goals are only set once a year. The goals that are set in the MBO process are done in a way that makes them measurable and verifiable, whilst making sure that each and every one can be attained. The idea is that problem areas are highlighted, with goals put in place to iron out those issues, thus making everyone more effective in the job that they do. This process encourages the active participation of every employee, with the end result being that the organizational goals are met within the agreed timeframe.
Management by Objectives Facilitates objective appraisal: The evaluation process is designed to be fair from the start, with all of the goals are put together in by the entire team. Giving individuals the freedom to exercise their own creativity makes for a happier set of employees, all of whom become fully committed to reaching the organizational goals.
Raises employee morale: Too many employees feel as though they are left out of the decision process, but this is not the case with Management by Objectives. Since they play a part in setting goals, the bigger picture becomes far clearer to everyone. This in turn leads to a companywide boost in morale.
Management by Objectives Facilitates effective planning: The Management by Objectives program makes organizational planning much more effective. Everyone is forced to look at results as opposed to winging it when crises arise. When effective planning is put in place, fewer of those problems tend to arise, allowing mangers to focus on what is important.
Acts as motivational force: Since everyone is on the same page when it comes to reaching the goals of the organization, there is a higher level of imagination and creativity that comes with that. With everyone working together for a common goal, there is a much higher level of motivation to reach them.
Management by Objectives facilitates effective control: One of the main features of MBO is the continual monitoring of progress. This allows everyone to measure their performance against the standards that have been put in place. It is those clear standards that allow everyone to work towards a very identifiable set of goals, all allowing for better control.
Management by Objectives facilitates personal leadership: MBO helps everyone within the organization, but it gives mangers in particular the opportunity to display their leadership skills. Keeping the entire group focused will paint a manager in a very positive light and make them more likely to advance within the company.
Advantages of Management of Objectives far outweigh the limitations.