Subordinate Objective

Date: 2015-10-07; view: 441.

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Sales representative Increase sales of video-recorders in the

area by 5 %, by 1 June.

Obtain five new accounts by 1 January.

Send sales reports in on time._______________

Chief Accountant Reduce bad debts from 8 % to 4 % of

sales turnover by 1 January.

Introduce new computer system in

Accounts Department by 1 January.__________

Marketing Manager Complete test marketing of PX hi-fi

units by 1 January.

Increase market share of home

computers by 3 % by 1 January.

Production Manager Meet 90 % of all delivery dates.

Reduce cost of bought-in materials

by 5 %.

Reduce the number of units rejected

by quality control.

Increase number of quality control

circles meeting each month.

All goals to be achieved by 1 January.

Personnel manager Complete training program for

shop-floor workers by 1 January.

Present bonus scheme for Board

approval by 1 June.

Make suggestions for improved

selection procedures by 1 June.

The subordinate and the manager discuss the objectives and make plans for achieving them. The manager may have to help in some way, perhaps by providing more training for the subordinate or buying more modern machines.

Finally, the subordinate starts 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.

There are many benefits of Management by Objectives. The system helps the subordinate to see clearly his role in the organization and the tasks he must carry out. He has a say in how his job is performed, and what his goals should be. As a result he feels more responsible and motivated and is therefore likely to be more committed to the objectives of the organization.

MBO is a good technique for assessing an individual's performance. He is judged on results, rather than on the personal feelings or prejudices of the manager. An MBO program should lead to better coordination and communications within an enterprise. The subordinate must liaise closely with his manager. The manager acts as teacher and guide. The individual is encouraged to identify with the goals of the organization. Most important of all, MBO makes the individual think of results, of the contribution he 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 programs are not fully supported by managements. This could be because managers are not always skilled at interviewing and giving guidance.

A few years ago, it was discovered that 70 % of the 500 biggest companies in the USA were using MBO. However, a later survey showed that only 15 % of the programs were considered successful. In spite of this finding, there is little doubt that MBO has helped to increase the efficiency of both subordinates and their managers.