MANAGEMENT BY OBJECTIVES

CARHLA FUNG

What is MBO?

Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. It aims to increase organizational

Philosophy
People perform better when they know what is expected of them and can relate their personal goals to organizational objectives

Definition of MBO

George Odiorne A process whereby superior and subordinate managers of an Organisation jointly define its common goals, define each individual's major areas of responsibility in terms Of results expected of him and use these measures as guides for operating the unit and assessing the contribution of

MANAGEMENT BY OBJECTIVES

Core Concepts of MBO

Managers should "avoid the activity trap All managers should: participate in the strategic planning process, in order to improve the implementation of the plan, and implement a range of performance systems, designed to help the organization stay on the right track.

According to Peter Drucker...

Managers who continuously focus on the now and the emergency result in being ineffective. The perception is that focusing and putting all energy into a crisis which happens every week or every month is effective behavior, as a ton of actionables and resources are committed to the cause; Unfortunately, everyone starts to lose the main direction of what the organization wants from them. The more crises and fires occur, the more the management team trails off the path that has been set to be successful. Teams begin to get burned out and confused, managers continue to believe that dealing with drives is the right thing to do and executives begin to get frustrated on why their plans are not being executed. A downward spiral for all those involved in any organization.

Managerial Focus

MBO managers focus on the result, not the activity.

Focus on the result, not on the activity

Features of MBO

Supervisor-subordinate participation Joint goal-setting Joint decision on methodology Makes way to attain maximum result Support from superior

Steps in MBO Planning

Define the organizational objectives. To be determined by the top management and usually in consultation with other managers. Once these goals are established, they should be made known to all the members.

GOAL SETTING

Developing Objectives: Specific Measurable Attainable Relevant Time-bound

In addition

Objectives are written down for each level of the organization, and individuals are given specific aims and targets. To ensure that people know what the organization is trying to achieve, what their part of the organization must do to meet those aims, and how, as individuals, they are expected to help. Provide is focus Objectives must be precise and keep

Common errors to avoid when developing objectives

Writing too many outcomes or too complex outcomes Having too high or too low standards Using too long or too short a time period Identifying outcomes that are not measurable, or outcomes for which the cost of measurement is too high

Setting Objectives
GUIDELINES

CHARACTERISTICS

Have a specific time frame Be behaviourally stated Be objectively evaluated Identify positive rather than negative outcomes Maintain and adhere to the organization's standards of practice and/or policies

Sets limits on the time for behavior to change Is a clear and concise form of communication Controls change Can be used by any level of staff Varies from the global to the very specific Documents problems beyond the manager's control Aids in analytic thinking Encourages staff development

Example

By March 30, 2011, the nurse manager will: Set up June-December in-service topics as prioritized by the staff Accomplish all staff performance evaluations by a specified deadline Perform documentation reviews in view of institutional standards Evaluate staffing patterns and rotate

Steps in MBO Planning

Define the organizatio nal objectives. To be determine d by the top managem ent and usually in consultatio n with other managers. Once these goals are After the organizatio nal goals are defined, the subordinat es work with the managers to determine their individual goals. In this way, everyone gets Managem ent must ensure that the subordinat es are provided with necessary tools and materials to achieve these goals. Allocation of resources should After objectives are establishe d and resources are allocated, the subordinat es can implement the plan. If any guidance or clarificatio n is

IMPLEMENTATION OF PLAN

MATCHING GOALS AND RESOURCES

MANAGERSUBORDINATE INVOLVEMENT

REVIEW & PERFORMANCE APPRAISAL

GOAL SETTING

This step involves periodic review of progress between manager and the subordinat es.

The Five-Step MBO Process

MBO Principles

Cascading of organizational goals and objectives Specific objectives for each member Participative decision making Explicit time period Performance evaluation and feedback

MBO Strategy : Three Basic Parts

All individuals within an organization are assigned a special set of objectives that they try to reach during a normal operating period. These objectives are mutually set and agreed upon by individuals and their managers. Performance reviews are conducted periodically to determine how close individuals are to attaining their objectives. Rewards are given to individuals on the basis of how close they come to reaching their goals.

Six MBO Stages

Define corporate objectives at board level Analyze management tasks and devise formal job specifications, which allocate responsibilities and decisions to individual managers Set performance standards Agree and set specific objectives Align individual targets with corporate objectives Establish a management information system to monitor achievements against objectives

Advantages

Continuously emphasize on what should be done in an organization to achieve organizational goals MBO process secures employee commitment to attaining organizational goals Creates a vested interest in the employee to accomplish goals because employees are able to set their own goals Defensive feelings are minimized, and a

Advantages
FOR NURSES

FOR MANAGERS

Standard of evaluation is based on the characteristics of a specific person and job Nurses have input and some control over their future Nurses know the standard by which they will be judged; nurses have knowledge of the managers goals, priorities, and deadlines; Nurses have a greater understanding of where they stand with the manager in relation to relative progress There is a better basis for evaluation than personality traits; MBO emphasizes the future which

Reservoir of personnel data and performance information for updating personnel files An indication of personnel development needs within the agency Basis for promotion and compensation A relationship with the staff that makes the manager a coach rather than a judge Better managerial planning and use of the employee. Directs work activities toward organizational goals, facilitates planning, provides standards for

Limitations

Not easy to implement and requires hard work for

maintenance Process must be taught and reinforced for managers to become and remain proficient in applying the principles of the system MBO assumes that staff members and managers will define suitable standards that will serve the agency; it presumes that managers understand their limitations Some staff nurses may not want to be involved in setting goals; Although managers really set goals; staff nurses may set their goals according to what they know their managers expect