Steps in MBO Process
1 Diagnosis: The first steps concerns the preliminary activities directed towards an understanding of the important employee needs, jobs, technology and external influences. Management commitment to the MBO process is obtained. Training and development in learning how to use the techniques are provided. Every employee is required to describe his or her particular job, its contents, duties, requirements and responsibilities.
2 Goal setting: Under MBO, goal setting is a multistage process. First of all the overall goals of the organistion are laid down in all the key-result areas. These organistional goals are laid down keeping in view the internal and external environment of the organization. These objectives are preliminary and tentative in nature.
3 Action Planning: Goals reflect the ends of managerial performance. Action plans provide the means for their attainment. Action planning involves determining what, who, when, where, and how much is needed to achieve a given objective. There are six steps in action planning: (a) specify the major tasks and activities required to attain objectives; (b) construct a schedule for performing the activities in the proper sequence; (c) clarify roles and relationship by delegating appropriate authority for each activity; (d) estimate time requirements for each major activity, (e) determine the resources required for each activity; and (f) clarify deadlines and modify the action plan.
4 Interim Reviews: After regular time interval (e.g. three months) the subordinate and superior get together to review the progress towards the attainment of goals. The focus of these meeting is not only to see what progress has been made, but to adjust the targets in case environmental changes require. Problems or obstacles and their causes are identified.
5 Final Review: At the end of the goals setting period, superior and subordinates formally meet to review the results. Emphasis is placed on analysis, discussion and feedback to the next MBO cycle. At the end of this step the cycle is repeated for the next period. Rewards are decided on the basis of final appraisal. The focus is on improving performance and on development of individuals rather than penalizing them.
Also Read: Concept of MBO
Steps in MBO Process Steps in MBO Process Steps in MBO Process