Management By Objectives
The term “Management by Objectives” was coined first by the management guru Peter Drucker in his book “The practice of Management” in 1954. The goal setting approach is one of the most well established methods to lead employees. Essential for this process are each employee’s individual objectives, which lead to the achievement of the company’s strategic goals.
“No operating policy has contributed more to Hewlett-Packard’s success than the policy of management by objective.” David Packard (cofounder of Hewlett-Packard)
Unlike typical topdown approaches, MbO allows a jointly set agreement of objectives by managers and their employees. They discuss and determine them together. The objectives needs to be realistic and SMART:
● Time oriented
After the jointly scheduled time frame is over, the manager checks and evaluates his employee’s achievement. Through this individual tailoring of the management process, the employees creativity is released and motivation increases. They identify themselves with their work and show higher commitment.
Where is the catch?
Through the individual tailoring of objectives the administration effort increases. Furthermore it becomes complex as the HR department as well as the payroll need to get involved. Due to permanent coordination via phone or email some managers may lose track of the process. Of course employees will be frustrated, when their bonus cannot be paid in time, because it was simply forgotten to deliver a simple piece of information. Even though it is human to forget sometimes. Likewise the HR department is frustrated when they have to run after then goals and achievements of employees.
Can’t it be more simple? Yes, it can!
“The MbO App helped the HR department to avoid sending about 80 emails per quarter, in order to get the goals set, to receive the results at the end of the quarter and to forward the information to the payroll manager.” – Marion Stenzel on AppExchange
By digitalizing the whole process, the complexity and administration effort can be minimized. The Munich based startup CloudWharf worked on such a solution and developed the application “MbO” for the Salesforce AppExchange, implementing Management by Objectives. Both the manager and employee as well as the HR and Payroll have their own tailored view and are able to automatically communicate with simple approval processes. MbO users are guided by simple “actions” that they need to do, which will show up when there is for example a new goal or achievement to be filled in.
They are then lead to a simple form to fill in all information, press “Save & Submit”, therefore finishing their task. Approvals will be set to the involved users, who can accept or decline this.
As the HR department is freed from all the administrative work, they have however still an overview of all objectives. The overview contains all information and offers easy filter functionality.
If you want to know more about the application, you can take a free test drive or watch a demo on the Salesforce AppExchange:
: Peter Drucker, 1954, https://www.goodreads.com/book/show/48018.The_Practice_of_Management
: Wayne State University, 07.12.2015, http://hr.wayne.edu/leads/phase1/smartobjectives.php