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Pros and Cons

Of
Management by Objective
Management by objectives is a technique applied primarily to personnel management. In
its essence, it requires deliberate goal formulation for periods (like the next calendar or
business year); goals are recorded and then monitored.

Pros of Management by Objectives:-


1. All the advantages of managements by objectives can be summarized by saying that
is results is greatly improved management. Objectives cannot be established
without planning is the only kind that makes sense. Management by objectives
forces managers to think about planning for results, rather than merely
planning activities or work.
2. Another major benefit of managing by objectives is that is forces managers to clarify
organizational roles and structures. To the extent possible, positions should be
built around the key results expected of the people occupying them.
3. One of the great advantages of management by objectives is that it encourages people
to commit themselves to their goals. No longer are people just doing work,
following instruction, and waiting for guidance and decisions; they are now
individuals with clearly defined purposes. They have had a part in actually
setting their objectives; they have had an opportunity to put their ideas into
planning programs.
4. In they same way that management by objectives sparks more effective planning, it
also aids in developing effectives controls. Control involves measuring results
and taking action to correct deviations from plans in order to ensure that goals
are reached.
5. MBO is often achieved using set targets, Objectives for MBO must be SMART
(Specific, Measurable, Achievable, Relevant, and Time-Specific
6. Objectives need quantifying and monitoring. Reliable management information
systems are needed to establish relevant objectives and monitor their "reach
ratio" in an objective way. Pay incentives (bonuses) are often linked to results
in reaching the objectives
7. The need to clarify objectives is stressed and suggestions for improvement are
obtained from all management levels
8. All managers have a clear idea of the important areas of their work and of the
standards required;
9. The performance of staff can be assumed and their needs for improvement
highlighted;
10. Greater participation may improve morale and communication;
11. Managers have to plan to achieve results, which are a means of achieving growth and
profits
12. It makes individuals more aware of organizational goals.
Cons of Management by Objectives:-
1. It takes a few years to be effective
2. Too much paperwork and difficulty in measuring key operations
3. Achieving objectives may be at the expense of organizational goals, e.g. cost reduction
programs achieved by deferring maintenance. Sacrificing everything to meet goals may
lead to poor managerial judgment
4. Some companies tend always to raise targets’ if these are to high, staff become frustrated.
5. Appraisals are sometimes made on personality traits rather than on performance.
6. Some companies have geared their salary administration to appraisal by results (easy
targets may be set to allow a promotion)
7. It is not easy to set measurable objectives for staff groups who only exist to help the
‘line’ achieve its ends
8. Review and counseling of managers may be ineffective
9. Some employees do not want to be held responsible and goals forced upon them may
lead to ill-feeling
10. Some of those giving appraisals may not be properly trained, may not be motivated to
make the system work and may tend to treat it in a mechanical manner

BOOKS:
I consult the following books:
Principals of Management, Stephen P. Robbins 9th edition
Management, Koontz and weihrich. h
(After reading, I made my self)
Web Base References:
www.wikipedia.com
www.yahooanswers.com