MBO means
Management By Objective - is a comprehensive device for effective planning, directing, controlling and performance appraisal, all in one.
The MBO Process - There are seven steps using to explain about MBO
Step 1- Setting an organization's common goals and measures of performance
- Identifies areas of its business where success is vital.
- Sees where it is in these Key result areas
- Decides how to measure performance in these Key Result areas
Step 2- The organizational structure is reviewed incorporating any revisions that might be necessary to accomplish the improvement in these KRA's
Step 3- Superior Set goals and Subordinate proposes goals in KRAs along with the performance.
Step 4- Joint agreement on subordinates goals and measures and milestones is reached.
- Alignment between subordinate,s and superior's objectives
- The joint plan of action of what needs to be done, by whom and by when
Step 5- Feedback of interim results is provided and compared with the milestones
Step 6- Cumulative period review of subordinate's performance vs targets. This is a forward-looking exercise.
Step 7- Review of organizational performance:
- In this review, the goals and measures of performance are revised, if necessary and the annual cycle of the MBO process start again.