Benefits of Mbo

1860 Words8 Pages

Benefits of Management by Objectives (MBO)

Nicole I. Claro

Grantham University

In this research paper, I will explain Management by Objectives (MBO) as it has been developed and adapted throughout the years, but based on the works and theories of Peter Drucker, the inventor of MBO. I will also discuss in some depth, 5 benefits that come from implementing MBO within an organization. The MBO process has 4 major activities that must occur in order to be successfully achieved within an organization. These activities are to 1st set goals, 2nd develop an action plan, 3rd review progress and 4th appraise overall performance. The paper will explain why
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Once organizational goals are in place it is up to management to make sure each employee has set their own personal goals and this is where S.M.A.R.T comes into play. S.M.A.R.T is a method used to help individuals know how to set their own objectives.
S.M.A.R.T stands for: specific, measurable, achievable, realistic, and time based. The following is a breakdown of S.M.A.R.T provided in by Bogue (2005). The S is for Specific: In order for the objectives to be effective, they should be specific and should describe the result that is desired. As an example an employee wants to decrease the length of time spent on the telephone for customer sales, because time equals money in most situations, a decreased call time per call would allow for more customers to be served. The goal should specify reduce call time by “X” number of minutes, maintaining quality and satisfaction of the customer call. The M is for Measurable: The goals have to be measurable; this means through the process of the review step, the manager has to be able tell whether or not the objective was met. The A is for Achievable: When setting objectives, managers have to make sure that the employees are setting achievable goals. Using the example above of reducing call time; let us say that the employee specified that they wanted to reduce the call time to one minute; realistically it is not an achievable
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