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HUMAN RESOURCE MANAGEMENT

IMPACT OF MANAGEMENT BY OBJECTIVE ON ORGANIZATIONAL PERFORMANCE

IMPACT OF MANAGEMENT BY OBJECTIVE ON ORGANIZATIONAL PERFORMANCE

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IMPACT OF MANAGEMENT BY OBJECTIVE ON ORGANIZATIONAL PERFORMANCE

ABSTRACT

The research progresses with a detailed examination of the notion of management by objective and depicts its effects on organisational performance. It explains the structure of management by aim using a methodical and organised strategy that enables management to focus on attainable goals and achieve the best possible results from available resources.

It gives a detailed study of organisational performance measurements as the overarching focal focus of management by goal. A case study is undertaken using the United Bank for Africa Plc in order to analyse a practical perspective.

CHAPITRE ONE

INTRODUCTION

The need of achieving organisational performance objectives is a basic feature in modern organisational management. As a result, strategic measures are regularly developed and implemented at the bottom line in order to accomplish crucial goals. Management by objective is a management philosophy that is used to ensure that organisational programme objectives or results are met.

Management by objective was characterised by Peter Drucker (19454) as a dynamic method that aims to reconcile the company’s desire to clarify and realise its profit and growth goals with the managers’ need to contribute and develop him. Drucker initially publicised these principles in management practise in 1954.

MBO has since been discussed by numerous writers, most notably McGregor and Humble. McGreor endorsed MBO on the Human side of enterprise since it allowed subordinates the opportunity to participate in good setting and performance appraisal and was based on a theory Y philosophy.

Humble advises that MBO focus on critical outcomes areas where enhanced performance is expected to have a dramatic influence on organisational performance in Improving Management Performance.

However, all authors are careful to emphasise two points: first, that MBO is a philosophy that, if accepted, necessitates a shift in managerial attitudes and perspectives; and second,

that MBO must be integrated with other organisational procedures, particularly the budgeting process, performance appraisal, management development, and management reward.

Management by objectives (MBO), also known as management by results (MBR), is the process of creating objectives within an organisation so that management and employees agree on the objectives and understand what needs to be done in the organisation to attain them. Peter Drucker popularised the term “management by objective” in his 1954 book, The Practise of Management.

The essence of MBO is participatory goal formulation, action planning, and decision making. The measuring and comparison of employee actual performance with the standards specified is an important aspect of MBO.

Employees are more likely to fulfil their tasks when they have been involved in goal formulation and selecting the course of action to be followed.

The system of management by objectives, as defined by George S. Odiorne, is a process in which the superior and subordinate jointly identify its common goals, define each individual’s major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members.

Objectives can be set in any activity domain (manufacturing, marketing, services, sales, human resources, finance, information system, and so on).

Some targets are collected for a full department in the whole organisation, other can be individualized.

Managers must identify the enterprise’s mission and strategy goals.

Top-level managers set goals based on an examination of what the organisation can and should accomplish in a given time frame.

These managers’ tasks can be centralised by appointing a project manager to monitor and control the activity of the various departments. If this is not possible or desirable, each manager’s contributions to the organisational aim should be clearly stated.

Objective quantification and monitoring are required. Reliable management information systems are required to create relevant targets and objectively assess their reach ratio. Pay incentives (bonuses) are frequently tied to achievement of goals.

The case study investigation will seek to ascertain the influence of MBO on UBA Plc’s organisational performance.

1.2 BACKGROUND OF THE STUDY

Historically, management has focused on achieving organisational performance goals such as profit, growth, and market value. Despite advancements in various sectors of the economy such as technological advancement, the industrial revolution,

advancements in production and commercial activities, and the complex nature of Trade Union and industrial relations, the fact remains that organisations are constantly seeking new ways and ideologies to ensure that resources are maximised and set goals and objectives are met.

MBO was initially introduced in management practise by Peter Drucker in 1954. One of the major concepts of MBO was the allocation of managers’ time and energy. Effective MBO managers, according to Drucker, focus on the outcome rather than the effort. They assign work by establishing a contract of objectives with their subordinates rather than dictating a comprehensive implementation road map.

MBO entails defining roles and breaking them down into more specific objectives or key results. MBO entails (1) determining company – mid goals derived from corporate strategy, (2) determining team and department level goals, (3)

collaboratively setting individual – level goals that are aligned with corporate strategy, (4) developing an action plan, and (5) reviewing performance and revising goals on a regular basis. R. G. Greenwood (1981), Management by Objectives, pp. 225-230.

The wider premise underlying MBO is to ensure that everyone in the organisation understands the organization’s purpose as well as their individual roles and responsibilities in accomplishing objectives that will help to achieve those goals. The entire MBO system seeks to get managers and employees to act to implement and achieve those plans, which naturally achieves the organization’s goal.

In light of MBO’s result-oriented character as a management philosophy. It motivates the researcher to undertake a similar study using UBA as a case study to investigate the influence of management by objective on organisational performance.

1.3 STATEMENT OF THE PROBLEM

Because of mobility, many organisations are finding it increasingly difficult to meet corporate objectives and maximise the use of their people resources. Many businesses have prioritised central management while ignoring and failing to integrate lower-level staff with corporate strategies and objectives. The end result has been a lack of understanding, interpretation, and implementation of such strategies, resulting in poor organisational performance.

As a result, the research is confronted with the difficulty of assessing the impact of management by objective (MBO) in organisational performance using UBA Plc as a case study.

1.4RESEARCH QUESTIONS

Among the research questions are:

1. What is the nature of management by goal in UBA and what is the nature of MBO?

2. What is organisational performance and what is organisational performance at UBA Plc?

3. What is the influence of management by objectives on organisational performance in UBA Plc, and what is the impact of MBO on organisational performance?

1.5 OBJECTIVES OF THE STUDY

The study’s aims are as follows:

1. to give a thorough examination of the concept of management by objectives and organisational performance

2. To establish the structure and method of management based on objectives.

3. Identifying the type of organisational performance measurement

4. To assess the influence of MBO on organisational performance.

5. To ascertain the nature of MBO in UBA Plc.

6. To establish organisational performance criteria in UBA Plc.

7. To assess the impact of MBO on organisational performance at UBA Plc.

1.6 SIGNIFICANCE OF THE STUDY

The following are some of the study’s implications:

1. To demonstrate the significance of employee involvement in the planning process and goal setting in the organisation.

2. TO create a study framework upon which managers might build upon to obtain optimal staff performance in achieving objectives.

3. To provide a detailed analysis of the notion of MBO as it may be implemented in situations involving poor employee performance in organisations.

4. To serve as a source of information for administration, consultants, and Human Resources personnel.

1.7 HYPOTHESIS STATEMENT

1. Ho UBA Plc has no organisational performance standard.

H1 UBA Plc has an organisational performance standard.

2. Ho (MBO) Management by objectives is not given substantial attention in UBA Plc.

H1 (MBO) Management by objectives receives a lot of attention at UBA Plc.

3. Ho Management by Objective has no substantial impact on organisational performance at UBA Plc.

H1 Management by objective has a substantial impact on UBA Plc’s organisational success.

1.8 SCOPE OF THE STUDY

The study delves into the notion of MBO, its procedure, and its significance. It also goes into greater detail on the nature of organisational performance in order to determine the impact of MBO on organisational performance using UBA Plc as a case study.

1.9 DEFINITION OF TERMS

1. Management by objective (MBO) is a method of creating objectives inside an organisation so that management and employees agree on the objectives and understand what they need to accomplish in the organisation to attain them. Pg. 1 of Peter Ducker’s The Practise of Management (1954).

2. Organisational performance is defined as the actual output or results of an organisation as compared against its anticipated output (or goals and objectives). Organisational success, according to Richard et al. (2009), comprises three distinct areas of business outcomes: (a) financial performance (b) product market performance (c) shareholder return.

CHAPITRE TWO

REVIEW OF RELATED WORKS

INTRODUCTION 2.0

This chapter provides an overview of many studies undertaken by notable researchers, as well as definitions of terms related to the impact of management by objectives on employee performance.

The chapter also provides a summary of the problem’s history and current status, as well as a quick assessment of prior studies into closely comparable situations.

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