LIMITATIONS OF MBO

MBO requires issuance of proper , exhaustive guidelines to goal setters The following are difficulties in goals setting:

1. Positive and active participation from subordinates is not easily forth forthcoming.
2. Truly verifiable goals are bot easy to formalise
3. Emphasis is put in short-range goals, whereas long-range goals are avoided, tough long-range goals are vital for growth and development of the organization
4. Goals remain inflexible and rigid. For example, changes desirable in annual budgets are not easily accepted in the middle of the year.
5. Over-use of quantitative goals jeopardizes the qualitative aspect which may more important than quantification in some cases.
6. Goals tend to take orecedebce or priority over the people who use them. Any action is acceptable of it series in the attainment of Gilas, without caring for its impact on people. Thus, all these difficulties come in the way of making management by objectivesoperational in an organisation. Further, managing involves more than goal setting.
7. Time-consuming nature of management by objectives. Management by objectivessystem is time-consuming especially in the early phases of its introduction when employees are unfamiliar with its process.

ADVANTAGES OF MBO

The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. 

Some of the important features and advantages of MBO are:

Clarity of goals – With MBO, came the concept of SMART goals i.e. goals that are:
Specific
Measurable
Achievable
Realistic, and
Time bound.
The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees.
The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback.

Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment.

Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.

MBO PROCESS

The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. 

The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities. 

How Does Goal Setting Motivate?

According to Locke, goal setting motivates in four ways 

• Goals direct attention. Goals indicate where individuals should direct their efforts when they are choosing among things to do. For instance, recognizing that an important assignment is due in a few days, goal setting may encourage you to say no when friends invite you to a movie this evening.

• Goals regulate effort. Goals suggest how much effort an individual should put into a given task. For instance, if earning a high mark in accounting is more important to you than earning a high mark in organizational behaviour (OB), you will likely put more effort into studying accounting.

Goals increase persistence. Persistence represents the effort spent on a task over time. When people keep goals in mind, they will work hard on them, even in the face of obstacles.

• Goals encourage the development of strategies and action plans. Once goals are set, individuals can develop plans for achieving those goals. For instance, a goal to become fit may include plans to join a gym, workout with friends, and change eating habits.

GOAL SETTING THEORY (LOCKE)

You have heard the phrase a number of times: “Just do your best. That’s all anyone can ask.” But what does “do your best” mean? Do we ever know if we have achieved that vague goal? Might you have done better in your high school English class if your parents had said, “You should strive for 75 percent or higher on all your work in English” instead of “do your best”?

The research on goal setting by Edwin Locke and his colleague Professor Gary Latham at the University of Toronto shows that intentions to work toward a goal are a major source of work motivation. A goal is “what an individual is trying to accomplish; it is the object or aim of an action.”31 Goals tell an employee what needs to be done and how much effort will need to be expended.