Model of the MBO ProcessModel of the MBO ProcessStep 1: Setting GoalsStep 1: Setting Goals Step 2: Developing Action PlansStep 2: Developing Action Plans

Step 3: Step 3: Reviewing ProgressReviewing Progress

Corporate Strategic Goals Corporate Strategic Goals Departmental Departmental Goals Goals Individual GoalsIndividual Goals

Step 4: Appraising Overall Step 4: Appraising Overall PerformancePerformance

Appraisal of Overall PerformanceAppraisal of Overall Performance

Corrective ActionCorrective Action

Review ProgressReview Progress

Action PlansAction Plans

MBO Benefits and ProblemsMBO Benefits and ProblemsBenefits of MBOBenefits of MBO Problems with MBOProblems with MBO

1. Manager and employee efforts 1. Manager and employee efforts are focused on activities that are focused on activities that will lead to goal attainment.will lead to goal attainment.

2. Performance can be improved 2. Performance can be improved at all company levels.at all company levels.

3. Employees are motivated3. Employees are motivated

4. Departmental and individual 4. Departmental and individual goals are aligned with company goals are aligned with company goals. goals.

1. Constant change prevents MBO 1. Constant change prevents MBO from taking hold.from taking hold.

2. An environment of poor employer-2. An environment of poor employer-employee relations reduces MBO employee relations reduces MBO effectiveness.effectiveness.

3. Strategic goals may be displaced by 3. Strategic goals may be displaced by operational goals.operational goals.

4. Mechanistic organizations and 4. Mechanistic organizations and values that discourage values that discourage participation can harm the MBO participation can harm the MBO process.process.

5. Too much paperwork saps MBO 5. Too much paperwork saps MBO energy.energy.

Human RelationsHuman Relations