MANAGEMENT CONCEPTS &

ORGANISATIONAL BEHAVIOUR

UNIT-1

Dr. Nivedita Singh

Department of Management Studies
 What is management ?
 The process of using various resources (inputs) to produce some results

(outputs) is known as management, and the degree of success varies

according to the efficiency with which the resources are managed.

 Management is a Set of activities

planning and decision making, organizing, leading and controlling
directed at an organizational resources- human, financial, physical and
information
with the aim of achieving organizational goal in an efficient
and effective manner.
Management Definition by H. Koontz- “Management is an art of
getting things done through and with the people in formally
organized group”

According to F.W. Taylor, “Management is an art of knowing

what to do when to do and see that it is done in the best and
cheapest way.

According to Harold Koontz and Heinz Weihrich “Management

is the process of designing and maintaining an environment in which
individuals, working together in groups, efficiently accomplish selected
aims”.
 Theo Heimann discussed that management has three different
meanings:

Management as a ⚫ Management is an individual or a group of

Noun : refers to a Group individuals that accept responsibilities to run an
of Managers. organisation. They Plan, Organise, Direct and
Control all the essential activities of the
organisation. Management does not do the work
Management as a themselves. They motivate others to do the
Process : refers to the work and co-ordinate (i.e. bring together) all
Functions of Management the work for achieving the objectives of the
i.e. Planning, Organising, organisation.
Directing, Controlling, ⚫ Management brings together all Six Ms i.e. Men
etc. and Women, Money, Machines, Materials,
Methods and Markets. They use these resources
Management as a for achieving the objectives of the organisation
Discipline : refers to the such as high sales, maximum profits, business
Subject of Management. expansion, etc.
 Basic purpose of management

EFFICIENTLY
Using resources wisely and in cost effective way

EFFECTIVELY
Making the right decision and successfully
implementing them
 Efficiency:
operating in a
manner where
resources are not
wasted

Successful
management

Effectiveness:
doing the right
thing in a right way
at a right time
 Characteristics of management
⚫ Multi-dimensional - Most management oversees and supervises a
company or organisation's service or production cycle. Managers work
closely with and provide guidance to the members of their team. A manager
considers a staff member both as an individual with diverse needs and as a
component of the larger group. To be effective, managers influence their
team members to apply their unique strengths toward achieving the
organisation's goals.

⚫ Dynamic - Management is a dynamic function and evolves and adapts to

changes in its environment, whether they are economic, socio-political or
technological. For instance, a paper company could see a decline in sales
because of the rapid adoption of screens and digital devices. Whether the
company can still survive depends on how effectively its management can
adapt to new market requirements.
Cont..
⚫ Intangible - Management is not a tangible product, but its presence can
change the way an organisation functions. Management consists of
ideologies, policies and human interaction. Good management helps
improve a company's target achievement ratios, employee gratification
levels and overall ease in the company's operation.
⚫ Goal Oriented: Management is a purposeful activity. It coordinates the
efforts of workers to achieve the goals of the organization. The success of
management is measured by the extent to which the organizational goals are
achieved. It is imperative that the organizational goals must be well-defined
and properly understood by the management at various levels.
⚫ Distinct Process: Management is a distinct process consisting of such
functions as planning, organizing, staffing, directing and controlling. These
functions are so interwoven that it is not possible to lay down exactly the
sequence of various functions or their relative significance.
⚫ Universal Application: Management is universal in character. The
principles and techniques of management are equally applicable in the fields
of business, education, military, government and hospital. Henri Fayol
suggested that principles of management would apply more or less in every
situation. The principles are working guidelines which are flexible and
capable of adaptation to every organization where the efforts of human
beings are to be coordinated.
Nature of Management
• as a process
• as a discipline
• as a group of individuals
• as a profession,
• as a science as well as an art.
a) Management as a Process:
Management consists of a series of inter-related activities of planning,
organizing and controlling. All activities are undertaken in a proper
sequence with a systematic approach so as to ensure that all actions are
directed towards achievement of common goals. Thus, it is regarded as
a process of organizing and employing resources to accomplish the
predetermined objectives
b) Management as a Discipline:
Management is a systematized body of knowledge that has developed,
grown and evolved over the years through practice and research. The
knowledge so cumulated is disseminated to successive generations of
managers and used by them in performing their jobs. Thus, it has
become a separate field of study with its own principles and practices
and thus, evolved as an independent discipline with its own techniques
and approaches.
c) Management as a Group:
Management normally refers to a group of managers working in an
organization. It includes the top executive as well as the first line supervisors.
These managers perform their functions jointly as a group. The success of
business does not depend on the efficiency of one, but of all manages taken
together. Managers work as a team so that objectives of the business are fully
achieved. However, in every organization there are certain levels of
management with varying degree of the nature of authority and responsibilities.
You will learn about these later in this lesson.
d) Management as Profession: To be precise, any occupation that satisfies the
following requirements is called a profession. (i) It must be an organized and
systematized body of knowledge. Take for example professions like engineering
or chartered accountancy. These require a specialized knowledge. (ii) There is
always a formal method of acquisition of such knowledge. In other words,
individuals, to pursue a specific profession, must acquire the specialized
knowledge through some formal institutions. (iii) There exists an association to
devise certain code of conduct for the professionals. This code of conduct lays
down norms to be observed by the professionals while doing their job. (iv) A
profession is no doubt an occupation to earn one’s livelihood but the financial
reward is not the main measure of their success.
 Though management may not meet all the requirements of a
profession in strict sense of the term, but it meets most of the
above requirements and is, now a days, regarded a full-fledged
profession
 Management as Art or Science
Management as Science
1.Universal Acceptance - Scientific principles are universally
accepted principles and can be applied across all situations, locations,
and times. For example, Newton’s law of motion applies to every
object in motion irrespective of their location and state. Similarly,
management as well comprises specific fundamental principles that are
accepted worldwide. For instance, the principle of unity of command
applies to all organisations, large and small.

2. Cause and Effect Relationship - In science, every cause results in

an effect. This phenomenon is known as causality. To put simply, every
event occurs due to reason. For instance every action has
consequences, like if employees aren’t treated well, then the
productivity will degrade. Conversely, an organisation can attain
increased productivity if the workers are given a bonus and satisfactory
remuneration.
3. Experimentation and Observation - Science is all about facts
and logic and deduces results through experimentation and
observation. The principles of management have been formed
along the same lines. For instance, equal work opportunities and
fair remuneration for the work are known to improve one’s
productivity at work. This idea was derived through scientific
observation.

4. Test of Validity and Predictability - Every scientific principle

and law is tested for validity and can be verified at any given point
in time, and it shall provide similar result each time. Likewise, one
can test the principles of management and expect the same results
every time. Consider two companies A and B. Let’s say, company A
has one boss who administers that company’s operations, whereas,
company B has two bosses and they both try to manage the
organisation as per their judgement. An experiment will show that
company A performs better with one superior to direct all.
 Management as Art

1. Skilful application - Art is personalised, and the style of every artist is different.
Each artist has a different perspective, style, and a different approach to a job.
Likewise, one can successfully manage their organisation only with their individual
skills. Here, one’s approach to the tasks at hand will be different from another, and
hence management can be considered an art.
2. Creativity - Every artist is creative, and similarly, managers need to show creativity
and innovation in the decisions they make for their business to stand out and gain a
competitive edge. Hence, creativity and innovation in management help managers take
unique yet effective decisions.
3. Practical & Theoretical Knowledge - Art supports and believes the importance
of theoretical knowledge and hence most of the art classes, whether it is music,
painting, or dance also carry theoretical papers for students to study. And evidently,
the practical knowledge forms the basis of art. In management, the significance of
theoretical and practical knowledge is not new. With a theoretical understanding of
management principles and their subsequent practice, managers can perform better in
managing their organisational goals.
4. Practise - An artist becomes seasoned with years of practice and
dedication towards their work. Management as art speaks the same
terms. Managers have to go through this trial and error method
before they can become seasoned managers who can make
appropriate decisions.
5. Target-oriented - An artist never works on their piece of art
without any goals in mind; goals make them more focused and act
accordingly for its fulfilment. The same holds for management. A
manager must set objectives and work towards achieving it to
become proficient in their endeavour.
 Importance of Management

1.It helps in Achieving Group Goals - It arranges the factors of production,

assembles and organizes the resources, integrates the resources in effective manner
to achieve goals. It directs group efforts towards achievement of pre-determined
goals. By defining objective of organization clearly there would be no wastage of
time, money and effort. Management converts disorganized resources of men,
machines, money etc. into useful enterprise. These resources are coordinated,
directed and controlled in such a manner that enterprise work towards attainment of
goals.
2. Optimum Utilization of Resources - Management utilizes all the physical &
human resources productively. This leads to efficacy in management. Management
provides maximum utilization of scarce resources by selecting its best possible
alternate use in industry from out of various uses. It makes use of experts,
professional and these services leads to use of their skills, knowledge, and proper
utilization and avoids wastage. If employees and machines are producing its
maximum there is no under employment of any resources.
3. Reduces Costs - It gets maximum results through minimum input by
proper planning and by using minimum input & getting maximum output.
Management uses physical, human and financial resources in such a manner
which results in best combination. This helps in cost reduction.
4. Establishes Sound Organization - No overlapping of efforts (smooth
and coordinated functions). To establish sound organizational structure is one
of the objective of management which is in tune with objective of
organization and for fulfilment of this, it establishes effective authority &
responsibility relationship i.e. who is accountable to whom, who can give
instructions to whom, who are superiors & who are subordinates.
Management fills up various positions with right persons, having right skills,
training and qualification. All jobs should be cleared to everyone.
5. Establishes Equilibrium - It enables the organization to survive in
changing environment. It keeps in touch with the changing environment.
With the change is external environment, the initial co-ordination of
organization must be changed. So it adapts organization to changing demand
of market / changing needs of societies. It is responsible for growth and
survival of organization.
6. Essentials for Prosperity of Society - Efficient management leads to
better economical production which helps in turn to increase the welfare of
people. Good management makes a difficult task easier by avoiding wastage
of scarce resource. It improves standard of living. It increases the profit
which is beneficial to business and society will get maximum output at
minimum cost by creating employment opportunities which generate
income in hands. Organization comes with new products and researches
beneficial for society.
The main functions of top management are as follows:

1. Determining the objectives of the enterprise as a whole.

2. Setting up an organisational framework.
3. Framing policies and making plans to achieve the objectives laid.
4. Work as a link between internal organisational environment and external
environment by representing organisation.
5. Assembling the resources of men, machine, material & money.
6. Providing overall leadership to organisation.
7. Exercising effective overall control.
The important functions of Middle management are as follows:

1. Interpreting the policies framed by top management.

2. Selecting suitable operative and supervisory personnel.
3. Assigning duties and responsibilities for timely execution of the plans.
4. Motivating personnel to achieve higher productivity.
5. Preparing the organisational set up in their respective departments.
6. Compiling and issuing instructions to the supervisors under their
control.
7. Coordinating with other departments so as to ensure a smooth
running of the entire organisation.
8. Reporting & feedback to top management.
9. Collecting information & reports on performance.
10. Making recommendations to top management for the better
implementation of plans & policies.
The various functions of lower management are as follows:

1. To issue orders & instructions to the workers and supervise & control
their functioning.
2. To plan the activities of his section, classifying and assigning jobs to the
workers.
3. To direct and guide the workers about work procedures.
4. To provide on the job training.
5. To solve the problem of the subordinates.
6. To communicate the problems upward in the hierarchy which cannot be
solved at this level.
7. To maintain discipline among the subordinates and develop in them the
right approach for work.
8. To build up a high group morale among the subordinates.
9. To maintain good human relations.
10. To act as a liaison officer between the middle management and rank
and file employees.
 What is a Manager?

 A manager is an expert in his or her field and is a support

system for employees. Managers work within a business and
work together as a team to achieve company goals.
 According to Ricky W. Griffin: A manager is someone whose
primary responsibility is to carry out the management
process within an organization. ... The basic activities that
comprise the management process are planning and decision,
organizing, leading, and controlling.
 Skills of a Manager

 Technical Skill.
 Conceptual Skill.
 Interpersonal and Communication Skills.
 Decision-Making Skill.
 Diagnostic and Analytical Skills.
Technical skills

 Technical skill is knowledge of and proficiency in activities

involving methods, processes, and procedures.
 Thus it involves working with tools and specific techniques.
Technical skill is the ability to use the specialized knowledge,
procedures, and techniques of a field of activities.
 Accountants, engineers, surgeons all have their technical skills
necessary for their respective professions. Most managers,
especially at the lower and middle levels, need technical skills for
effective task performance.
 For example, mechanics work with tools, and their supervisors
should have the ability to teach them how to use these tools.
Conceptual Skill
 Conceptual skill is the ability to see the “big picture,” to recognize
significant elements in a situation and to understand the relationships
among the elements.
 Conceptual skill is the ability to coordinate and integrates all of an
organization’s interests and activities.
 It requires having the ability to visualize the enterprise as a whole, to
envision all the functions involved in a given situation or circumstance,
to understand how its parts depend on one another and anticipate how
a change in any of its parts will affect the whole.
 A manager’s ability to think in the abstract and to view the
organization holistically is important.
 Suggesting a new product line for a company, introducing computer
technology to the organization’s operations, or entering the
international market; for deciding this magnitude, a manager requires
conceptual skill is his personality.
Interpersonal and Communication Skills

 Communication skill for a manager is a must. The manager must

be able to convey ideas and information to others and receive
information and ideas from others effectively.
 A manager’s job is to control the subordinates and gives high-
level managers or administrators information about what’s going
on.
 Communication skill enables a manager to perform them
properly. Most of his time, a manager’s job is to interact with
people inside and outside of the organization.
 Manager’s ability to communication with individuals and groups,
controlling and motivation they are what Interpersonal and
Communication skill are.
Decision-Making Skill
 Decision making skill is the skill that makes a manager able to
recognize opportunities and threat and then select an appropriate
course of action to tackle them efficiently so that the
organization can benefit them.
 Managers are not always going to make the best decision.
 But a good manager most often makes a good decision and learns
from the bad ones. Decision making is a skill that improves as
managers gain more experience.
 Training or educating is also a good method to develop the
Decision making the skill of a manager.
Diagnostic and Analytical Skills

 A good manager has Diagnostic and Analytical skills in his bags.

Diagnostic skill refers to the ability to visualize the best response
to a situation.
 Analytical skill means, the ability to identify the key variables in a
situation. Manager diagnostic skill and Analytical skill helps him
to identify possible approaches to a situation.
 After that is also helps a manager to visualize the result or
outcomes of these approaches. This skill sounds similar to the
decision making skill, but it is the skill required to make the
decision.
 Planning
KOONTZ - “Planning is  Planning is determination of courses of action to
deciding in advance - achieve desired goals. Thus, planning is a systematic
what to do, when to do & thinking about ways & means for accomplishment of
how to do. It bridges the
pre-determined goals.
gap from where we are &
where we want to be”. A  Planning is necessary to ensure proper utilization of
plan is a future course of human & non-human resources. It is all pervasive, it is
actions. It is an exercise in
an intellectual activity and it also helps in avoiding
confusion, uncertainties, risks, wastages etc.
problem solving &
decision making.
 Planning increases efficiency, reduces business related
risks, provides directions, encourages creativity and
innovation, helps in motivation. Planning also
smoothens decision making , helps to achieve
objectives and basis of control.
 STEPS IN PLANNING

Findin Evaluat Measur

Establis
Establis Decidi g ing and ing and
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verifia Planni tive ng a lling
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Premis Plan
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action action mme
Types of planning
 Types of Plans
 Objectives - Objectives may be defined as the goals which an
organization tries to achieve. Objectives are the ends towards which the
activities of the enterprise are aimed. Objectives provide direction to
various activities and serve as benchmark of measuring the efficiency
and effectiveness of the organization.
 Strategies - A strategy is a special kind of plan formulated to meet the
challenge of the policies of the competitors. Strategy can be shaped by
the general forces operating in an industry and the economy. The
strategy must be consistent with external environment
 Policies - Policies may be described as plans which are meant to serve
as broad guidelines to decision making in a firm. Policies exist at various
levels of the enterprise. A policy should be definite, positive and clear. A
policy is a standing plan which assist decision making and should be
referred as a general statement of the established rule. For example –A
firm has a policy of promotion from within the organization. If a
vacancy arises; the first preference is given to existing employees.
 Procedure – Procedure lays down the manner or method by which
work is to be performed in a standard and uniform way. Procedure is a
standing plan acting as a means of implementing a policy. For Example –
Sales department lays down a policy to execute all orders within 48
hours. So a procedure has to be followed in a chronological and
systematic order to fulfill the orders.
 Programs – Programs are precise plans which need to be made to
discharge a non –repetitive task. The essential ingredient of every
program are time phasing and budgeting. Specific dates should be laid
down for the completion of each successive stage of a program. For
Example –An enterprise has a program of opening 5 branches in
different parts of a country so they have to allocate funds and time
period for - a) Securing the necessary accommodation b) Recruiting
personnel to manage business c) Arrange the supply of goods that are to
be sold through the branches Often a single step in a program is set up as
a project.
 Rules – Rules are an explicit statement that tells the members of
the organization what they can or cannot do. Rules do not allow
any room for interpretation because it clearly specifies the action
needed to be done in a particular situation. Rules enforce
discipline. For e.g. - Use of Mobile Phone at workplace during
office hours is restricted.
 Budgets: Budgets are plans for future period of time containing
statements of expected results in numerical terms. Budgets are
very useful for an enterprise. Being expressed in numerical terms,
they facilitate comparison of actual results with planned ones and
serve as a control devise. The important budgets are sales budget,
production budget, cash budget, Revenue –Expense Budget.
 Organizing
 According to Chester Barnard, “Organizing is a function by which
the concern is able to define the role positions, the jobs related and
the co-ordination between authority and responsibility”. Hence, a
manager always has to organize in order to get results.

Organizing is important becoz:

 It facilitates efficient management
 It facilitates coordination and communication
 It facilitates growth and diversification-
 It ensures optimum use of resources
 It provides for optimum use of technological innovations
 It facilitates specialization
 Steps in organizing:

1.Determination of objectives - The purpose of the organization must be identified.

Objectives determine resources and various activities which should be done to achieve
the organizational goals.

2. Identification and grouping of activities- If group members are to pool their

efforts successfully, there must be proper division of the major activities. Each job should
be accurately classified and grouped.This will avoid duplication of work.

3. Assignment of duties- After grouping the activities into various jobs, as per the nature
of work, Similar activities should be placed under one department . Each individual
should be given a particular task according to his ability and skills.

4. Establishing relationship among individuals and group- The activities which

are performed by person holding different positions must be related. Every person in the
organization should know about his responsibility, authority and accountability so that
there is coordination, among individuals and departments.

The organizing process results in organization structure with precisely defined authority and
responsibilities.
Staffing
 According to Kootz & O’Donell, “Managerial function of staffing
involves managing the organization structure through proper and
effective selection, appraisal & development of personnel to fill
the roles designed un the structure”.

Importance of Staffing
 Helps in finding efficient worker
 Helps in increased Productivity
 Maintains Harmony
 Helps in morale boosting
 Helps in Optimum utilization of human resources
Staffing involves:
 Manpower Planning (estimating man power in terms of
searching, choose the person and giving the right place).
 Recruitment, Selection & Placement.
 Induction and orientation
 Training & Development.
 Remuneration or compensation.
 Performance Appraisal.
 Promotions & Transfer
 Directing
 According to Koontz and O'Donnell “Direction is the
interpersonal aspect of managing by which subordinates are led
to understand and contribute effectively and efficiently to the
attainment of enterprise objectives.”
 The manager must stimulate action by giving direction to his
subordinates through orders and also supervise their work to
ensure that the plans and policies achieve the desired actions and
results
Importance of Directing
 Initiates action
 Creates a Sound work environment
 Develops managers
 Behavioral satisfaction
 Increase in productivity
 Achieves coordination
 Facilitates control
 Facilitates change
 Facilitates growth
Elements of directing
Directing deals with inter-personal relations. It is the doing or
implementing phase of management. Hence it is also called
management-in-action.

a) Supervision – It implies overseeing the work of subordinates in

order to guide and regulate their efforts. Supervision is very
important at the operating level of management. The Supervision is
in direct contact with the workers and acts as the link between
workers and management. The purpose of supervision is to ensure
that subordinates perform their tasks according to prescribed
procedures and as efficiently as possible.
b) Communication- It is the process of passing information view
point, facts, ideas , opinion and understanding from one person to
another. It is a two way process and is complete when there is some
response from the receiver of information. Communication may
take several forms like order, instructions, report, suggestion etc.
 Leadership- Leadership may be defined as the process by which a
manager guides and influences the work of his subordinates. The
success of every enterprise is dependent upon the quality of its
leadership. For example Reliance would not have attained their
present success but for the able leadership of Dhiru Bhai Ambani. A
leader exercises his influence over the followers through the use of
informal authority or power.

 Motivation- Motivation means inspiring the subordinates with a

zeal to do work for accomplishment of organizational objectives. A
manager should make appropriate use of motivational tools to actuate
the subordinates to work harmoniously towards achievement of
organizational goals. Different people are motivated by different type
of rewards, which can be financial incentives or non-financial
incentives.
 Controlling
 It implies measurement of accomplishment against the standards
and correction of deviation if any to ensure achievement of
organizational goals.
 According to Theo Haimann "Controlling is the process of
checking whether or not proper progress is being made towards
the objectives and goals and acting if necessary, to correct any
deviation.” Controlling ensures that there is effective and efficient
utilization of organizational resources so as to achieve the
organizational goals. Controlling has two basic purposes a) If
facilitates coordination b) It helps in planning
 Significance of good control system are as follows

1) Basis of future action- Control provides the basis for future actions. It
will reduce the chances of mistakes being repeated in future by suggesting
preventive steps.
2) Facilitates decision making- The process of control is complete only
when corrective measures have been taken. This requires taking a right
decision as to what type of follow up action is to be taken.
3) Facilitates discipline and order – The existence of control system has
a positive impact on the behavior of the employees. They are cautious
while performing their duties as they know they are being observed by
their superiors.
4) Facilitates Coordination- Control helps in Coordination of the
activities of various departments of the enterprise. It provides them unity
of direction.
5) Facilitates motivation – A control system is most effective when it
motivates people to high performance. Since most people respond to a
challenge, successfully meeting a tough standard may provide a greater
sense of accomplishment. 6) Effective plan Implementation-
 • Establishment of standard
performance.
• Measurement of actual
performance.
Therefore • Comparison of actual
controlling performance with the
standards and finding out
has following deviation if any.
steps: • Corrective action
 Relation between Planning and Controlling
 Control is always based on Planning- Every manager uses certain
Standards for measuring the performance which are laid down by
planning. So planning is a pre-requisite for controlling
 Planning without Controlling is meaningless and control without
Planning is blind- A good plan will not bring any concrete result if the
management is lacking in controlling Planning identifies the goals and
determines the ways to achieve them whereas control ensures
attainment of goals by evaluating performance and taking corrective
action.
 Planning and controlling are both forward looking and backward looking
-Planning is looking ahead because plans are prepared for future
Controlling is looking forward because it aims to improve future
performance and helps in better planning in future. Planning is looking
backwards because new planning is guided by past experiences.
Controlling is looking backwards as it compare actual performance with
standards fixed in the past
 The management process
Planning and decision
making: setting the
organizational goals &
deciding how best to
achieve them

INPUTS from
Environments GOAL attained
Controlling &
Monitoring and Organizing determining
•Human resource correcting ongoing how best to group
•Financial resources
activities to facilitate goal activities & resources •Effectively
attainment.
•Physical resources •Efficiently
•Information resources

Leading motivating
members to work in best
interest of the organization
MANAGEMENT BY
OBJECTIVE
 Management by objectives
 Management by objectives (MBO) is a strategic management
model that aims to improve organizational performance
by clearly defining objectives that are agreed to by both
management and employees.
 Management by Objectives Principles

 Cascading of organizational vision, goals and

objectives
 Specific objectives for each member
 Participative decision making
 Explicit time period
 Performance evaluation and feedback
 Steps in Management by Objectives Process

1. Define organization goals

Setting objectives is not only critical to the success of any company, but it also
serves a variety of purposes. It needs to include several different types of
managers in setting goals. The objectives set by the supervisors are provisional,
based on an interpretation and evaluation of what the company can and should
achieve within a specified time.

2. Define employee objectives

Once the employees are briefed about the general objectives, plan, and the
strategies to follow, the managers can start working with their subordinates on
establishing their personal objectives. This will be a one-on-one discussion
where the subordinates will let the managers know about their targets and
which goals they can accomplish within a specific time and with what
resources. They can then share some tentative thoughts about which goals the
organization or department can find feasible.
3.Continuous monitoring performance and progress
Though the management by objectives approach is necessary for increasing the
effectiveness of managers, it is equally essential for monitoring the performance
and progress of each employee in the organization.

4. Performance evaluation
Within the MBO framework, the performance review is achieved by the
participation of the managers concerned.

5. Providing feedback
In the management by objectives approach, the most essential step is the
continuous feedback on the results and objectives, as it enables the employees to
track and make corrections to their actions. The ongoing feedback is
complemented by frequent formal evaluation meetings in which superiors and
subordinates may discuss progress towards objectives, leading to more feedback.

6. Performance appraisal
Performance reviews are a routine review of the success of employees within
MBO organizations.
 Benefits of Management by Objectives
 Management by objectives helps employees appreciate their on-the-job
roles and responsibilities.
 The Key Result Areas (KRAs) planned are specific to each employee,
depending on their interest, educational qualification, and
specialization.
 The MBO approach usually results in better teamwork and
communication.
 It provides the employees with a clear understanding of what is
expected of them. The supervisors set goals for every member of the
team, and every employee is provided with a list of unique tasks.
 Every employee is assigned unique goals. Hence, each employee feels
indispensable to the organization and eventually develops a sense of
loyalty to the organization.
 Managers help ensure that subordinates’ goals are related to the
objectives of the organization.
 The SMART Method
 Clarity of goals – With MBO, came the concept of SMART goals i.e. goals
that are: