Management by Objectives: Highlights

Management by goals can be called a philosophy. With the help of this tool it is possible to successfully implement strategic plans by focusing the staff on achieving concrete and measurable results. Management by objectives allows to develop the ability of the company to predetermine its future, and not to take action, depending on what is happening at the current time. It complements the traditional planning system with individual responsibility and material incentives. This philosophy combines several management functions into a complex. Among them: planning, evaluation and motivation of employees, control.

Management by objectives implies a link between the achievement of the result in the area of responsibility and the amount of compensation. This approach allows the company's employees to realize what the company needs to achieve, which means that it allows them to perform their tasks more efficiently. Management by objectives provides more reliable feedback in the management system of the organization, creates an objective basis for monitoring and material incentives for its participants. With this tool, you can more accurately plan the requirements for human resources. The method of managing by goals helps to improve mutual understanding between management and subordinates. Second, in addition, it gives an opportunity to get more powers, more often to show initiative.

This tool allows you to achieve goals in a comprehensive manner and solve the tasks of personnel management in the organization. Its essence is to develop and implement a system that pervades all levels of the company. Elements of it are the goals and objectives (both the whole organization as a whole and its individual employees). For this, the principles of decomposition and cascading are applied. Goals are first determined at the highest level, then they are divided and descended in the form of specific instructions below (units and specific employees). At the same time, every employee in the process of dialogue must understand what the organization needs to achieve (and what is its task). Goals are developed on the basis of the well-known principle of SMART.

The key elements of such a system are key performance indicators. Their purpose is to measure the effectiveness (effectiveness) of employees, functions or processes according to selected criteria. The optimal number of KPIs for an employee is 3-7 indicators. Priority determines their weight. They are visualized in the form of a SMART card. Its other name is the KPI map.

The result required from the activity of an employee is most often established at three levels (target, bottom and top). On this depends the specific amount of the employee's remuneration. The card or part of its indicators is developed by the manager for his subordinates (direct and functional). Personnel management services provide administration of this process, the result of which is the bonus for achieving good KPI indicators. Cards are developed in two copies (one is issued to the employee, the second is kept by the manager until the summing up). It should be noted that such a system allows you to efficiently fulfill those goals and objectives of personnel management, which are the most significant.