Momentum

Management by Objectives Software www.getmomentum.com

An Introduction

Management by Objectives

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Management by Objectives Software www.getmomentum.com

What it is!
Management by objectives (MBO) is a process of dening objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization in order to achieve them.

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Why it works!
With an MBO system, you see the job in terms of what its end result should be. Activities are never the primary element, but rather an intermediate step in getting the desired result.

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Management by Objectives Software www.getmomentum.com

Prof. Peter Drucker

Peter Drucker originated the concept of management by objectives in the 1950s. He wrote about this method in his 1954 book, The Practice of Management.

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Why it fails!
Factors such as unrealistic expectations regarding results, lack of commitment by top management, and an inability or unwillingness by management to allocate rewards based on goal accomplishment.

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Practical Advice

While managing by objectives is not a foolproof management strategy, there are ways to make the process of setting your MBO objectives a little smoother. The S.M.A.R.T is one way to help break down the characteristics of an eective set of objectives

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S for Specic
In any level of an organization, goals should be specic. This means that each objective should include its desire result. For example, a poorly stated goal would be improve employee performance, the objective should be improve employee performance by tracking with monthly rewards system.

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M for Measurable
Objectives in a successful MBO environment must be measurable. There must be a way to look back on the progress of objective and have it be very clear whether it was met or not.

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A for Achievable
While it may seem like a no-brainer, objectives must be achievable. For example, an objective that aims for 100 percent customer satisfaction is not achievable, as it is not realistic.

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R for Realistic
Realistic objectives are ones that plan for factors that cannot be controlled; that give room for imperfection. Realistic goals are those that can be accomplished with only the tools at the immediate disposal of the employee.

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T for Time-based
It must have a specic ending point. Using the example from above, improve employee performance, changes to improve employee performance by tracking with monthly rewards system within the next 6 months.

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Conclusion
MBO has come a long way: from a performance appraisal device, to a tool for integrating individual and company objectives, and nally to a long-term planning mechanism.

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Management by Objectives Software www.getmomentum.com

More Information
If you plan to implement management by objectives in your organization our software application called Momentum will simplify this process. More information can be found at www.getmomentum.com.