Advantages of Assessment Centre

The benefits or merits or advantages of assessment centre:

1. Assessment centre is used for selection, training and
promotion of candidates.
2. The candidate can find out their strengths and weakness.
3. The candidates can improve their performance. They can
increase their strengths and remove their weaknesses.
4. It is more valid because the candidate is evaluated
(judged) by many different experts.

Disadvantages of Assessment Centre

The limitations or demerits or disadvantages of assessment
centre:
1. Assessment centre is very costly.
2. It is very time consuming.
3. Highly experienced managers are required to evaluate the
candidates.
4. The evaluators may be biased.
5. The candidates may not get proper feedback.
Management by Objectives (MBO): Advantages and Limitations
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Management by Objectives (MBO): Advantages and

Limitations!
Advantages of MBO:
The concept of MBO is very important in terms of its managerial
implications. Besides being a philosophy of management, it is a
system which helps in synchronizing the objectives of the
individuals with the objectives of the organization.

When implemented properly, systematically and

consciously, the MBO has the following advantages:
1. Improved Performance:
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MBO is basically a result oriented process. Its main focus is on

setting and controlling goals. Managers are encouraged to do
detailed planning. They concentrate on the important task of
improving performance by reducing the costs and harnessing
the opportunities. Improved planning will lead to improved
productivity arid more profits.
2. Greater Sense of Identification:
The individual members of the organization have a greater
sense of identification with the company goals. With MBO, the
subordinates feel proud of being involved in the organizational
goals. This improves their morale and commitment to the
organizational objectives.

3. Maximum Utilization of Human Resources:

Since the goals are set in consultation with the subordinates,
these are more difficult to achieve and more challenging than if
the superiors had imposed them. In addition, since these goals
are fixed according to the particular abilities of the
subordinates, it obtains maximum contribution from them and
thus it leads to maximum utilization of human resources.

4. No Role Ambiguity:

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There is no role ambiguity or confusion in the organization,

because specific and clear goals are set for the organization, for
the division for the departments and for the individual
members. Both the managers and the subordinates know what
they have to do and what is expected of them.

5. Improved Communication:
In MBO, there is improved communication between the
management and the subordinates. This continuous two way
communication helps in clarifying any ambiguities, refining and
modifying any processes or any aspects of objectives.
6. Improved Organizational Structure:
In MBO, the whole of organizational structure is redesigned
because of the revision of job descriptions of various positions
as a result of resetting of the individual goals. All this helps in
improving the organizational structure as a result of location of
the problem and weak areas of the organization.

7. Device for Organizational Control:

MBO serves as a device for organizational control and
integration. If there are any deviations discovered between the
actual performance and the goals, these can be regularly and
systematically identified, evaluated and corrected.

8. Career Development of the Employees:

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MBO provides a realistic means of analyzing training needs and

opportunities for growth for the employees. The management
takes keen interest in the development of skills and abilities of
subordinates and provides an opportunity for strengthening
those areas which need further refinement, thus, leading to
career development of employees.

9. Result Based Performance Evaluation:

The system of periodic performance evaluation lets the
subordinates know how well they are doing. In MBO, strong
emphasis is put on measurable and quantifiable objectives. As a
result, the appraisal tends to be more objective specific and
equitable. As these appraisal methods are based on result and
not on some intangible characteristics, there are considered to
be superior to the trait evaluation methods of appraisal.

10. Stimulating the Motivation of the Employees:

The system of MBO stimulates the employees motivation. First
of all, they feel motivated because of their participation in goal
setting. They take keen interest in the implementation of the
goals which they themselves have set. Secondly the appraisal
system, being very objective and specific can be highly morale
boosting.

Limitations of MBO:
A system of MBO has certain weaknesses and limitations. Some
of these are inherent in the system while some arise when
introducing and implementing it.

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Some of the problems and limitations associated with

MBO are as explained below:
1. Lack of Support of Top Management:
In traditional organizations, the authority is vested in the top
management and it flow from top to bottom. In MBO,
subordinates are given an equal opportunity of participation,
which is resented by the top management. This system cannot
succeed without the full support of top management.
2. Resentful Attitude of Subordinates:
The subordinates can also be resentful towards the system of
MBO. Sometimes, while setting the goals, they may be under
pressure to get along with the management and the objectives
which are set may be unrealistically high or far too rigid. The
subordinates, generally, feel suspicious of the management and
believe that MBO is another play of the management to make
them work harder and become more dedicated and involved.

3. Difficulties in Quantifying the Goals and Objectives:

The MBO will be successful only if the goals can be set in
quantifiable terms. But if the areas are difficult to quantify and
difficult to evaluate, it will not be possible to judge the
performance of the employees. Moreover MBO does not have
any subjectivity in performance appraisal. It rewards only
productivity without giving any consideration to the creativity of
the employees.

4. Costly and Time Consuming Process:

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MBO is quite costly and a time consuming process. There is a

lot of paper work involved. Moreover, there are a lot of
meetings and too many reports to be prepared, which add to
the responsibilities and burden of the managers. Because of
these reasons managers generally resist the MBO.
5. Emphasis on Short Term Goals:
Under MBO, goals are set only for a short period, say for six
months or one year. This is because of the reason that goals
being quantitative in nature, it is difficult to do long range
planning. Since the performance of the subordinate is to be
reviewed after every six months or one year, they tend to
concentrate on their immediate objectives without caring for
the long range objectives of the enterprise. This emphasis on
short term goals goes against the organizational efficiency and
effectiveness and is not a healthy sign.

6. Lack of Adequate Skills and Training:

Most of managers lack adequate skills, knowledge and training
required in interpersonal interaction which is required in the
MBO. Many managers tend to sit down with the subordinate,
dictate the goals and targets with no input permitted from the
subordinates and then demand that the goals be achieved in a
specified time. Whether the goals are realistic or not does not
enter the picture. In this type of environment, two way
communication is not there and objectives are imposed on the
subordinates. This destroys their morale, initiative and
performance.

7. Poor Integration:
Generally, the integration of the MBO with the other systems
such as forecasting and budgeting is very poor. This lack of
integration makes the overall functioning of the system very
poor.
8. Lack of Follow Up:
Under the system of MBO, the superior must get in touch with
the subordinate at the appropriate time and at that time, the
subordinate will inform the boss exactly what has been
accomplished and how. If the superior delays the meeting, it
will create hurdles in the successful implementation of MBO as
the subordinate will also start taking the programme casually.

9. Difficulty in Achievement of Group Goals:

When goals of one department depend upon the goals of
another department, cohesion is difficult to maintain. In such
cases, the achievement of goals will also become very difficult.

10. Inflexibility:
MBO may make the organization rigid. As the goals are set after
every six months or one year, the manager may not like to
revise the goals in between, even if the need arises, due to fear
of resistance from the subordinates. The managers must learn
to handle this situation, because sometimes revision of short
term goals is necessary for the achievement of long range
objectives.

11. Limited Application:
MBO is useful largely for the managerial and professional
employees. It is not appropriate for all levels and for everyone
because of the heavy demands made by it. It can be made
applicable only when both the subordinates and manages feel
comfortable with it and are willing to participate in it.
12. Long Gestation Period:
It takes a lot of time, sometimes 3-5 years to implement the
MBO programme properly and fully and some research studies
have shown that these programmes can lose their impact and
potency as a motivating force over a long period of time.

An MBO programme or process consists of four common

ingredients. These are: specificity, participative decision
making, an explicit time period, and performance feedback. A
brief description of these follows.

1. Specificity:
The objective in MBO should be clear and precise that can be
measured and evaluated. To state a desire to cut costs, for
example, may not be enough. Instead, to cut costs by 5 per
cent will be more clear, exact and measurable objective.

2. Participative Decisions / Objectives:

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In MBO goals are not imposed on people. The superior and

subordinate jointly set objectives to be attained.

3. Explicit Time:
Each objective is to be completed within a specific time period,
be it three months, six months or a year.

4. Performance Feedbacks:
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The final ingredient in MBO programme is feedback on

performance. It includes continuous and systematic
measurement and review of performance. Based on these
Corrective actions are taken to achieve the planned objectives.

Advantages of MBO:
Following are the advantage of MBO:
1. The need to clarify objectives is stressed and suggestion for
improvement is obtained from all levels of management.

2. All managers have a clear idea of the important areas of

their work and of the standards required.

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3. The performance of staff can be assumed and their needs for

improvement highlighted.

4. Greater participation may improve morale and

communication.

5. It makes individuals more aware of organisational goal.

Disadvantages of MBO:
MBO suffers from the following disadvantages also:
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1. It takes a few years to be effective.

2. Some companies always tend to raise goals. If these are too
high, employees become frustrated.

3. Appraisals are sometimes made on personality traits rather

than on performance.

4. Some employees do not want to be held responsible and

goals forced upon them may lead to ill-feeling.