Benefits of MBO

There are several barriers to efficient planning. The main ones include a reluctance of establishing goals and also the resistance of change. However, MBO or management by objectives may assist in overcoming these barriers and provide better planning. The notion behind MBO is that the main organization al objects form a fundamental and important part of management such that managers should base their management approach solely on them.

1. Better planning
MBO fundamentally involves a participative process of decision making that makes plans and objectives much more realistic. It places the emphasis on attaining goals in the main result areas. As such, MBO forces the managers to reason with regards to results instead of activities. People are encouraged to set clear goals rather than depending on guesswork or hunches. An integrated objectives hierarchy is then created across the organization. This means there will be better planning as accurate performance objectives will be laid down.

2. Boosts motivation
The participation of employees in performance reviews and goal setting tends to enhance their commitment. The corporate objectives and goals are thus converted to personal goals, which integrate the employee with the company. Timely performance feedback offers a sense of accomplishment, achievement and job enrichment. This boosts moral and the enhanced communication and involvement offers psychological satisfaction, stimulating employers to work harder.

3. Improves coordination
MBO assists in clarifying both the goals and structure of the company. Having a harmony of goals allows employees at all levels of the company to have one direction. All employees know their roles in the company and what they are expected to do. MBO implementation results in better clarification of company structure and roles. It provides an integrated management view and assists interdepartmental co-ordination.

MBO therefore has a great importance with regards to performance appraisal and long term planning as well.

Benefits Of MBO