Tuesday, 29 May 2012

Management By Objectives


Setting Goals

Long‑range business goals will be the cornerstone of your company's MBO program. To achieve these goals, you must have a method to communicate them to your managers and employees. One way is to bring managers and employees into the process by asking them to help formulate the company's short‑ and long‑range goals. If they have a role in establishing the goals, they will be more committed to achieving them.

All goals should relate to and support the long‑range objectives for the company. In this way, you can ensure that the goals of all levels of management are consistent. If goals are incompatible, you may find that employees feel like the middle manager of a research and development company who exclaimed in a seminar, How can I set my goals when I don't know where top management wants to go?

Types of Goals

What areas of your managers' work are suitable for goal setting? Ask managers to identify the most important aspects of their work. In each area, they should set both short‑ and long‑term goals. Carefully developed goals, if attained, should give the manager better control of the job. Each manager should define one or two goals in each of the following categories: 

  • Regular work goals.
  • Problem‑solving goals.
  • Innovative goals.
  • Development goals.
By asking your managers to set at least one goal in each of these four areas, you may open their eyes to new possibilities they had not seen before. The goal‑setting process can be a very useful educational step.

Regular Work Goals

These include the major part of the manager's responsibilities. For example, the head of production should focus on the quantity, quality and efficiency of production and the head of marketing should concentrate on developing and conducting the market research and sales programs. In defining their regular work goals, employees should include ways of 
  • Operating more efficiently.
  • Improving the quality of the product or service. 
  • Expanding the total amount produced or marketed.

Problem‑Solving Goals

These provide managers an opportunity to define their major problems and to set a goal to solve each one. There is no danger of ever running out of problems; new problems or new versions of old problems are always present.

Innovative Goals

Because of the push for new products and new methods in today's marketplace, innovation now gets much attention in seminars and publications for top managers. Managers and workers should seek new and better production methods, explore better ways to serve customers and propose new products for the company. Managers will need to use innovative approaches to make the company competitive in a fast‑changing national and international economic environment.

Development Goals

In setting development goals, you and your managers recognize the importance of acquiring new skills. Managers should plan for the continued growth of each employee, both in technical areas and in work relations with fellow employees.

Devising a Work Plan

You and your managers should use a miniature work plan to develop goals that are complete and useful (see Exhibit 1). In developing the plan, the following five areas should be addressed:
  • Goal
    •  Be specific and concise.
  • Measurement 
    • What benchmarks will you use to measure whether you have achieved your goals? These usually can be expressed in quantitative terms.
  • Major problems anticipated.
    • Work steps -- List three or four of the most essential steps. Give completion dates for each.
  • Supervisor's goals 
    • Employees should identify which of their manager's goals relate to their own goals.

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