How does management by objectives work and how does it benefit employee, boss, customers?

Question

How does management by objectives work and how does it benefit employee, boss, customers?

Answer 1

In a large corporation every manager is given a set of objectives for the coming year by his/her supervisor.  The objectives relate to both performance and finances.  (For a small business you could assign objectives to each and every employee.)  The manager then either agrees and signs off on the objectives or negotiates for a more reasonable (attainable?) set of objectives.

At the end of the year each person who has been assigned objectives is evaluated by their manager and "graded" based on how successful they were in meeting their objectives.

If benefits the employees by giving them specific goals to meet and a means of determining how well they are doing their jobs.  It benefits the boss for the same reason, i.e. it provides a way of quantifying the performance of each employee and can be used to determine compensatioh and promotions in a fair and unbiased way.  

As far as customers are concerned it will benefit them only if the objectives include items relating to customer satisfaction such as reducing the number of complaints meeting specific standards for courtesy, attitude and so on.   The trick here lies in verifying that these objectives are being met.  To do so in a retail store, for example, you might hire a "mystery shopper" to come in periodically and observe the performance of your employees.  If your business entails having service personnel work at customer premises you could use telephone surveys and/or have your personnel hand the customers questionaires and self addressed stamped envelopes at the time the service is performed.

Hope this helps

Jerry-thebookkeeper