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MBO – Are Frontline Workforce Team Objectives Met?

One of the earliest and most famous performance management models has been the Management by Objectives (MBO).


It is based on a theory of management developed by Peter F. Drucker in his book Practice of Management (1954). Essentially, in summary, MBO is a performance management system in which the manager and employees develop areas of responsibility for the team. 


Clearly, the objective is to improve the performance of the organization by clearly defining the objectives that are mutually agreed upon by both the employee and the organization (manager). 


MBO is aimed to achieve this through these 5 steps:

  1. Establish the organization’s objectives from their targets, mission, vision, etc.
  2. Translate the organization’s objectives into targets/goals for the employees. SMART goals strategy suggested by George T. Doran
  3. Encourage employees to set their own objectives drawing from the above two points. As they are fully involved, employees are expected to be motivated.
  4. Measure and monitor the employees against the employees.
  5. Evaluate and reward the employees against the set objectives based on honest feedback from to and from the employee.




Advantages & Shortcomings of MBO:

  • As everyone is focused on goals & targets due to clarity at the start. 
  • Management can create goals that lead to the success of the organization.
  • Everyone is aligned with the organization’s objectives and communication is good between employees and managers.
  • Edwards Deming pointed out that excessive emphasis on goals & targets in MBO might push the employee to achieve them at any cost, including the sacrifice of quality.
  • MBO ignores external and internal environments and triggers such as culture, market conditions, etc.
  • MBO will fit only some sections of the organization but will be less impactful when applied to dynamic sections like sales, operations, etc which respond to external stimuli and are less internally focused.


MBO for Frontline Workforce:

  • Frontline Workforce forms 60-70% of the organization’s employees who cannot be covered with MBO due to its inherent structure.
  • MBO is focused on goals & targets pushing the frontline workforce to achieve them at any cost hurting the individual and the organization in the long run.
  • Employees need to be in the system for a longer time to understand, learn and implement MBO in their work. The residency of the frontline workforce is low thus defeating the fundamental premise of MBO.


The need is to build a performance management system that focuses on the frontline workforce and their managers who form a large core of many FMCG, FMCD, and BFSI sectors. 


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