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FREE online courses on Performance and Potential Appraisal - Suggestions for improving the effectiveness of MBO

 

One of the major reasons for the failure of MBO in many organizations is that those in charge fail to recognize the potential character of the implement process. The fault is not in the system but in its use. As with any technique, there is a right and a wrong way to implement MBO programmes. The following suggestions would help in making use of MBO programmes properly.

 

Organizational commitment

 

The most effective way to implement MBO is to allow the top-level managers to explain, coordinate and guide the programme. Without top management support and commitment, MBO cannot be implemented properly. MBO presents a challenging task to managers. They must feel that the programme is important and will bring in results. The shift from planning for work to planing for accomplishment of specific goals is not easy. As rightly pointed out by Hampton, “More often than not, probably, MBO is tried and sooner or later allowed to slip into disuse. Initial enthusiasm and good faith wane as difficulties develop”. Joint goal-setting, participation in planning and decision-making processes, objective performance appraisal sessions pose several problems to managers who are wedded to old ways of thinking and action. These problems should not be allowed to kill MBO without ever being openly confronted. Managers must believe that MBO would work and must accept it as a way of thinking. As Knootz pointed out, it is essential that “an effective programme of managing by objective must be woven into an entire pattern and style of managing. It cannot work as a separate technique standing alone”. MBO should not be used as a decorative piece. If it does not have the active support, involvement and commitment of top managers, it should not be installed at all.

 

Training

 

MBO is not a superfluous ritual which can be finished off as quickly as possible. It calls for precise, concrete thinking. Managers should be given adequate training in MBO philosophy and procedures before the system is installed. They must be in a position to integrate the technique with the basic company philosophy. Under an authoritarian, threatening, mistrustful climate, MBO proves to be a fruitless exercise. “A plant must have the right soil and climate if it is to thrive”. Similarly MBO demands a healthy atmosphere where its philosophy is understood and the techniques are properly applied. Drawing the curtain between fuzzy wishes and specific objectives, arranging practice sessions where performance objectives are evaluated, measuring performance and checking deviations – all these activities do not come by easily. The subordinates as well as the superiors must be taught how to set realistic goals and familiarized with the results for which they are to be held responsible.

 

Adequate time and resources

 

A well-conceived MBO programme cannot be installed overnight. It may take three to five years of operation before the MBO programme is yielding fruitful results. Implementing an MBO programme is quite often time consuming and managers must have the necessary time and resources to utilise it. They must allocate adequate time and resources to educate each person in the organization in the nature and philosophy of the system. It is no use looking to MBO for instant solutions.

 

Take care of the necessary mechanics

 

One reason why MBO programmes fail is that they are not integrated or institutionalized into the real planning and control activities. Setting goals is only part of the story, goals must be supported by control activities also. It is important to assign authority and responsibility for initiating and overseeing the MBO programme. The persons who administer the programme must be endowed with sufficient power not only to punish but also reward people promptly.

 

It is always better to clarify responsibility and authority relationships so that everyone in the organization understands what is expected in the MBO system. A guideline manual of procedures may be adopted so as to ensure clarity and facilitate the goal-setting and performance appraisal activities.

 

Timely feedback

 

Monitor MBO as it is put to use. This process reveals opportunities for feedback, counselling and encouragement to subordinates at other than regular performance appraisal sessions. In many cases, as Koontz pointed out, the superior simply sits back and forgets that periodic review, counsel and control are mandatory to the programme's success. The subordinate, lacking in such direction, often, turns in a mediocre performance. Congratulations and encouragement from superiors who back up their words with pay raises and promotions would motivate subordinates to peak performance. Again, while comparing the actual progress of MBO with the planned progress, the manager should avoid the tendency to be overly critical with those subordinates who are lower in ability, lack confidence or are less motivated.

 

Politics

 

Be sensitive to the politics of implementing MBO, MBO redistributes power and not all managers welcome this. If MBO is seen as a significant change, it will generate hostile reaction in the form of jokes, infighting and overt conflict. MBO can also alter the status of an organization, can influence decisions, can affect budgets and can promote creation of coalitions to fight with it. MBO, as Odiorne pointed out, has failed in many organizations because managers quite often ignored these political considerations in the process of implementation.

 

 

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