GOAL SETTING FOR EFFECTIVE ORGANIZATIONS

• GOAL SETTING• OD programs rely heavily on goal setting

because goals give a direction and purpose.• OD programs are undertaken to bring about a

planned change.• In any OD program a series of steps are

planned that will move the organization in the direction of achievement of goals.

Goal Setting Theory

• Goal : A goal is what an individual or a group is trying to accomplish. It is the object or aim of an individual’s actions.

• Goal Setting : is the process intended to increase efficiency and effectiveness by specifying the desired outcomes towards which individuals, teams and organizations should work.

• The goal setting theory as propounded by Edwin Locke and Gary Latham is based on the premise that the actions of individuals are regulated by their conscious intentions and values.

• The major findings of goal setting theory are :• - More difficult goals produce better

performance.

• - Specific Hard goals are better than “ do your best “ goals.

• - People may abandon goals if they are too hard.• -Participation in goal setting increases

commitment and attainment of goals.• -Feedback and goals improve performance.• -Individual difference tend not to affect goal

setting

• - Goal setting in teams deserves special consideration.

• - Managerial support is critical.

Model for Goal Setting

• Goal setting will be successful only if the goals are properly developed and the individuals are committed.

• The goal setting process involves the following factors:-• 1. Establishing the goals: goals can be established in a

number of ways. For standardized and repetitive functions, it can be done through time and motion studies .

• It can also be based on past performance.• Goals can also be established jointly by the employee

and the supervisor.

• 2. Getting Goal commitment: this is very important if the goal achievement is to be successful.

• It can be achieved in a variety of ways like trust in the top management, support by management, effective reward and incentive system.

• Past successes in goal achievement also helps in getting commitment.

• 3. Overcoming resistance: can be achieved most effectively by involving the employees in the goal establishment.

• Providing special training and having an effective reward and incentive system are other ways of overcoming resistance.

• Certain attributes of goals that work best are :• - Difficult and challenging but not impossible

to achieve.• - Clear and easily understood by the

employees.• - Specific, measurable and compatible with

the overall objectives of the organization.

• 4. Period of Performance: This follows the establishment of goals.

• During this period special training may be required to be given to the employees.

• Management support in terms of resources and information is also important during this phase of goal setting.

• Managers should provide timely and objective feedback when goal is completed.

• 5. Results: The result of employees’ performance may be beneficial or negative.

• Benefits may incur to the organization or the individual .• Individual success increase the confidence and

competence of the employees resulting in better performance.

• Non achievement of goals lead to negative consequences like demoralization.

• This very often happens when goals are not specific and measurable.

MANAGEMENT BY OBJECTIVES

• Is a technique used by management to integrate individual goals with that of the organization.

• It is a system of management which helps in planning, organizing, problem solving and motivating .

• George Odiorne defines MBO as a process in which the managers and subordinates jointly identify the common organizational goals, define each individual’s major areas of responsibility in terms of expected results and use these measures as guides for operating the unit and assessing the contribution of each member.

• Basic Assumptions of MBO: are• - People have higher level needs for

competence and achievement and want to satisfy these in their work.

• - People will work harder and perform better if they are involved in setting the goals they are to achieve.

• PURPOSE OF MBO:• There are two underlying purposes of MBO:-• 1. to clarify the organizational goals and plans

at each level• 2. to gain better motivation and participation

from the members.

• THE MBO PROCESS• The top management team studies the operating

system of the organization.• Based on this study, the team sets up standards of

organizational performance.• Goal setting sessions are then held at various

levels , one at a time, moving from top to bottom.• Within divisions, at each level, the goals are more

specifically defined.

• STEPS IN THE MBO PROCESS• 1. The subordinate proposes to the manager a set of goals for

the upcoming period.• 2. The manager and the subordinate jointly develop specific

goals and targets.• 3. There is a period of performance in which the individual

attempts to achieve the individual goals.• 4. The manager gives feedback to the subordinate and also

gives appropriate reward and incentive.• 5. Based on the performance review in step 4, new goals are

set.