Goal-Setting

Management by Objectives (MBO) is a system, which was firstly described by the American Peter Drucker, in his book The Practice of Management. Since then, MBO has attracted enormous interest from the business world, and its principles have been applied in many of the world’s largest companies.

In his book, Peter Drucker emphasised that an organisation and its staff must have clear goals. Each individual must understand the goals of the enterprise he/she works for, and must make contribution to them. He/She must know what sort of results he/she is expected to achieve.

If an organization uses the MBO approach, it must pay careful attention to planning, because each individual has clearly defined objectives. A special feature of MBO is that the subordinate participates with his/her manager in developing objectives. After these have been worked out, his/her performance, in relation to the goals, can be assessed. MBO, therefore, focuses on results. The subordinate’s performance is judged in terms of how worse or badly he/she has achieved his/her goals.

Various kinds of MBO systems are used in organisations. Here is an example of how a programme might work in a company. The programme consists of several stages. First, the subordinate and his/her manager define the job separately. They also rank the tasks in order of importance. Both parties then meet and discuss the statements they have made in writing. It is quite possible that they will not agree about certain aspects of the job. They discuss their differences of opinion. In the end, they both have a clearer idea of what the job involves. Next, his/her current performance is evaluated. They try to decide how well or badly it is being performed. Again, they do this evaluation separately. They meet and discuss their assessments. All being well, the manager will have the chance to praise the subordinate for some of his/her work. Then the subordinate and his/her manager try to develop goals, which are challenging but realistic. The manager may set performance standards, which can be measured or quantified. The objectives probably spell out results that must be achieved. There will be dates by which the subordinate must achieve his/her goals. Finally, the subordinate sets about (начинать) achieving the goals. From time to time, the subordinate and the manager meet to discuss progress. It is vital that the manager receives feedback from the subordinate on performance and achievements.

MBO is a good technique for assessing an individual’s performance. He/She is judged on results, rather then on the personal feelings or prejudices of the manager. An MBO programme should lead to better coordination and communication within an enterprise. The subordinate must liaise (лиэйз-поддерж.связь) closely with his/her manager. The manager acts as teacher and guide. The individual is encouraged to identify with the goals of the organisation. Most important of all, MBO makes the individual think of results, of the contribution he/she is making – or should make – to the enterprise. The main limitations of the system are that it is time-consuming and may create a lot of paperwork. In practice, MBO programmes are often not fully supported by managements, because managers are not always skilled at interviewing and giving guidance.