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MBO: Management by Objectives

Labor Costs are High and Productivity is Questioned

For all businesses, especially during a recession, the value of the people performing the work is always called into question. This isn’t their fault; rather, it is good business to know whether your people are productive and justify their expense.

Using Managements by Objectives, you can quantify what they do, set goals and milestones, and ensure that the company gets the value it needs, while giving the employees specific accountable goals that they know they are being measured against.

Most Businesses Do Not Know the Real Costs

Surprisingly, 88% of companies do not know the value being produced by their workers, nor do they set measurable goals for them to achieve. Goals should not be seen as a burden on the employees – many employees prefer having set goals and objectives, so they know what they are measured against and know what they need to do to keep their job.

Providing that structure is a win-win for the employer and employee.

Failing to Define Objectives Causes Employee Turn Over:

Often employees are released because they aren’t “doing enough” but haven’t been told “how much” to do. Failing to provide measurable objectives also creates stress on management, who needs to assess team members without clear standards. Finally, the failure to define expectations can lead to Labor Law disputes from employees who feel wrongfully terminated.

Provide Objectives and Monitor Accomplishments

By defining specific tasks, goals and objectives for team members, you are giving them fair notice of what is expected. You give them the opportunity to improve, where needed, after objective measurement and scoring. You give management the comfort of having concrete expectations and the reasonable ability to measure performance against those objectives.

Management by Objectives Increases Productivity and Results

By measuring results and adjusting performance, the company can significantly increase its productivity. Areas of weakness are identified, behavior refined and progress is made. Deadlines can be adhered to, and clients will be more satisfied. In the end, MBO pays for itself with increased productivity, reduced turn over (and associated hiring & retraining costs), and increased customer satisfaction.

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