Performance Appraisal of Akij Group of Industry:

When we want to know about the mathod of Performance Appraisal

AkijGroup follows they inform us that they follows MBO mathod. We al know
that Management by objectives (MBO) is a strategic management model that
aims to improve the performance of an organization by clearly defining
objectives that are agreed to by both management and employees. According
to the theory, having a say in goal setting and action plans encourages
participation and commitment among employees, as well as aligning
objectives across the organization.

Management by objectives (also known as management by planning) is the

establishment of a management information system (MIS)  to compare actual
performance and achievements with the defined objectives. Akij Groupclaims
that the major benefits of MBO are that it improves employee motivation,
commitment and allows for better communication between management and
employees.

However, we ask them about any drawback of this mathod, they told us a
weakness of MBO is that it unduly emphasizes the setting of goals to attain
objectives, rather than working on a systematic plan to do so. Setting
particular goals like production targets leads workers and employees to meet
those targets by any means necessary, including shortcuts that result in poor
quality.

Akij Group’s HR department included, objectives are laid out with the help of
employees and are meant to be challenging but achievable. Employees
receive daily feedback, and the focus is on rewards rather than punishment.
Personal growth and development are emphasized, rather than negativity for
failing to reach objectives. So it has more positive impact than negative.
MBO Process of Akij Group:

MBO process consists of three phases of management: planning, monitoring, and evaluation.
MBO process starts with the project planning that we want to achieve in this phase project mirror
is made with the purpose that each and every one should know what is going to be reached with
their work. This plan will serve as guide for their later work. As their expectations are clearly
defined from their project starts the second phase applying this plan, its implementation. And
employees’ results can be evaluated only after project's implementation.

These factors finding will serve as guide for other processes of performance appraisal.
MBO planning

MBO planning technique starts by defining the problem and setting goal. An analysis of the state
is made where the organization is now and where it wants to be after this technique application.
The general setting purpose is made that where they want to go and what they want to measure,
in order for all later activities to be guided toward general purpose of organization. The survey
aim is to measure the influence of MBO technique as a method of employees’ performance
evaluation in raising their effectiveness in work.

Setting objectives- after defining the problem and setting goals in the process of planning MBO
method objectives of work should be formulated. In this phase the Akij’s project manager gives
specific instruction to the dependent, sets quality standards and time of realizing these objectives
that serve as standards for evaluating and for a continues comparison for the results that were
agreed. It works out well-communicated hierarchy of objectives and participative determined,
people-motivated, and SMART objectives. The system's objectives are clear, compatible,
attainable and acceptable.

Communicating objectives- After objectives are being set, the managers and employees should
implement a clear and précised agreement for objectives and goals that need to be fulfilled.
Although goals and plans may be initiated at high levels in the organization, they must also be
communicated to others in the organization.

Defining results- MBO starts with the selection of an appropriate person to fulfill a certain job.
Then, the manager and selected person make plans and agree for the time required and the
objectives that must be fulfilled for the next period. In this step, discussion, taking and giving
data are required in between the manager and dependent.

Setting controlling points – Setting controlling points is important because a manager must tell
precisely the employee of how the work is going to be evaluated and to describe different
controlling points that are going to be managed by the manager in order to be assured if the
works are finished with time and inside the predetermined budget. In this phase, will be set the
measure, calculations and standards in a way that the employee must know clearly that the
success can be measured and determined. 

Commitment of employees in setting objectives- MBO requires participation, discussion, and

general analysis, in order to reach a complete agreement in between manager and employees to
separate the role and responsibilities for the job that is going to be fulfilled. If the employees are
included and discuss the job and objectivities with the manager, then more the employee will be
the employee to finish the job.

Monitoring of MBO

Akij group of Industry monitor their entire MBO by three steps. Those are,

Implementing the plan – In the moment when the duty is given to employee and starts work,
manager begins to evaluate and compare the results which they have agreed on. The
implementation stage focuses on how the strategy is achieved. For MBO implementing for
performance appraisal, there are some guides created from Levitz as cited by Kutllovci
(2004) according to his instruction for implementing MBO program are: Management and
employees should be committed and supporting MBO program; Each and every one involved in
the process, must develop a good understanding of the aims and objectives of program;
management and others personnel must meet in order to develop the common aims; the aims of
department should be developed that should be in accordance with the organizations’ aims;
Describing of work should be written in a certain form, by declaring measurement of satisfying
performance; rapport official-supervisor should be reviewed in every meeting; objectives should
be evaluated and set for each individual. They should be clear and measurable. The agreement
for objectives should be reached; supervisor must be trained for these methods: evaluation,
development and observing performance; development of background session must be based in
individual needs; employees must see MBO-program interrelated with rewarding program;
observing system must be interrelated with other function of management.

Freedom and independence of employees – are considered as two motivating forces in the
world of work. Employees need to be evaluated as individuals, to be responsible for realizing
important duties, and measured from their manager precisely in their individual performance.
Furthermore, they want freedom to complete their work according to their method and time that
they set. In the moment that employee is given the freedom to act more they will feel responsible
to realize that work, and will be committed to finish the work inside the standards set: time and
budget planned. Freedom and independence makes the employees to be more motivated, creative
and to raise self evaluation.

The freedom, independence and discretion allowed to employees in scheduling their work and
determining the procedures for carrying it out. It provides a sense of ownership and control over
work outcomes.

Continuous communication with employees- firstly, in planning phase the manager and
employee agree about how work is going and information exchanges. So based on this plan
managers and employees communicate with each other, excluding the cases when the employee
has unpredictable obstacles for realizing predetermined objective, and it needs to be consulted
with his employers. In this case, again the two sides together reach agreement for overtaking
created situations, and if necessary they make changes about the created situation from beginning
plan.

Evaluating MBO

Evaluation means finding something that belongs to the impact that it has on one situation,
individual or organization. In this phase we evaluate the influence of Akij’s MBO technique on
employees’ effectiveness.

Productivity- is raised through using MBO method. Because the employees get full freedom of
work and continues feedback. Research indicates that this is the most popular of scheme types,
89% of Akij’s employees response better performance against objectives or goals.  
 Goals must be clearly defined. Participation in goal setting is important as a means of getting
agreement to the setting of demanding goals. Feedback is vital in maintaining motivation,
particularly towards the achievement of even higher goals.

Satisfaction- The MBO method is in itself a method of motivating employees by managerial

practices that are perceived positively. Management by objectives improves employees’
motivation to work and to achieve organizational goals. Whereas,  job satisfaction as ‘a
pleasurable or positive emotional state resulting from the appraisal of one's job and job
experiences’. If the employee realize bonus like raising the incomes or personal satisfaction they
will be more motivated for work and will improve their individual performance as the results of
these firms which have the employees clever and motivated for work, the performance will be
better.