Management by Objectives (MBO) is Considered as the Best Method for Performance Evaluation

Management by objectives (MB) is considered as the best method for performance evaluation. Most of the traditional methods of performance appraisal are subject to the antagonistic judgment of the rates. It was overcome this problem; Peter F. Drucker propounded a new concept, namely, management by objectives (MBO). The concept of MBO described as a

“process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individuals major areas of responsibility in terms of results expected of him and use these measures as guides for operating the unit and assessing the combinations of each of its members. In fact, MBO is not only a method of performance evaluation. It is viewed by the practicing managers and pedagogues as a philosophy of managerial practice because it is a method by which managers and subordinates plan, organize communicate, control and debate.

 

MBO is considered as the best method of performance evaluation because of the following steps.

1. Goal Setting: Goals are set which each individual is to attain. The superior and subordinate jointly establishes these goals. The goals refer to the desired outcome to be achieved by each individual employee.
2. Performance standards: The standards are set for the employees as per the previously arranged time period. When the employees start performing their jobs. They come to known what is to be done, what has done, and what is to be done, what has done, and what remains to be done.
3. Comparisons: In the third step, the actual levels of goal attained are compared with the goals agreed upon. This enables the evaluator to find out the reasons for variation between actual and standard performance. Such as comparison helps devise, training needs for increasing employees performance.
4. Periodic review: Finally, in the periodic review step, corrective measure is initiated when actual performance deviates from the standards established in the first step-goal-setting stage. Consistence with the MBO philosophy, periodic progress reviews are conducted in a constructive rather than punitive manner. The purpose of conducting reviews is not to degrade the performers but to aid in his/her future performance.