IN the first operational planning I attended, I got lost in a lot of new terms. A veteran supervisor even chided me by asking if I knew what a KPI or a KRA was. My department manager, gracious as ever, explained to everyone what it was for my benefit, and later on laid out our Key Result Areas and asked each one of us what our department should do for the year which will contribute to attaining the KRAs for the year.
My previous organization did not involve their employees in planning for the year, so I was thrilled to be part of charting where we were headed. Little did I know the whole organization was actually following Management by Objectives (MBO) introduced by Peter Drucker in his 1954 book The Practice of Management.
Management by Objectives is a personnel management technique, as well as a strategic management process where leadership and employees agree on set objectives and goals, assess and monitor progress, and evaluate what could have been done better. This allows people managers to translate organizational goals into challenging but realistic action plans for their teams, and allows employees to evaluate how their unique skills and competencies will contribute to the overall goals. Ideally, this will help employees buy into the goals and objectives of the organization because they understand how they contribute to the bottom line, and since the action plans came from the employees themselves, they would be committed and invested in its success.
The problem with being given target goals without consultation from the managers and employees is that it makes them feel as order-takers rather than being part of the decision-making process. Ideally, when employees are given the opportunity to participate in corporate planning, it helps them become committed to the set goals and more engaged in the attainment of those goals.
The downside of being given handed-down objectives is the tendency of people to look for shortcuts to achieve the goal, which could lead to substandard products and services because the focus is to achieve the goal at all cost. Worse is when managers are forced to achieve goals and objectives they think are not even realistic, which cripples them from taking the time to think of new ways of doing things or improving processes because they are too preoccupied with meeting the target deliverables. Others would take this as a challenge, but when people keep getting pushed, they break.
The first step in MBO is setting goals. The organization’s senior leadership has the overall picture of where they want the organization to go. While the bottom line for most organizations is profit, leadership has to also take into account the overall personal and professional development of its people. This is especially the case when everything is being automated for the sake of efficiency and people are anxious about losing their job to artificial intelligence and robots.
I especially abhor it when an organization calls for an entrepreneurial mindset and malasakit, and in the same breath tell its employees to look for another organization if they cannot cope with change. While employees understand the need for change and being engaged in the fulfillment of the organization’s overall objectives, they should not sacrifice their own personal aspirations and job security. In the end, people will look for an organization that will take care of them even in the midst of change and uncertainty because they will always look for an organization that will not just think about profit but also give its employees the opportunity to progress professionally and personally. If the goals and objectives of the company are aligned to its employees’ aspirations and needs, it will become easier for them to take on the next step.
People managers will then meet with their teams to outline specific objectives and develop action plans to achieve organizational objectives. These should be aligned with the employee’s own expertise and competencies, and should reflect a balance of the organization’s and the employee’s personal objectives. When employees lay down what they can do to the attainment of the organizational goals and objectives, it becomes easier for them to participate and meaningfully contribute their expertise even if it is not in their job descriptions.
Job descriptions can only do so much to outline what an employee is expected to do. It does not allow for flexibility in meeting the ever-increasing demand for employees to do their job as they grow in the company. That line “or any other responsibilities as may be assigned from time to time” is a loose and vague assignment which employees specifically hate because it gives license to the company to assign projects and other tasks which are not actually aligned to the key performance indicator of the employee, or, worse, the employee does not have the skill to actually carry them out.
But when employees draft for themselves what they need to do as it aligns with the organizational own and their own, it becomes easier for the organization to have engaged employees who have committed themselves to mutually acceptable goals.
An important element of management by objectives is the element of reward for achieving intended objectives during the evaluation phase of the process. Employees need to understand what is in it for them for helping in achieving the goals. If organizations call for an entrepreneurial spirit or malasakit, they should also be willing to share the profits to their employees. Rewards can be in the form of recognition, team reward or even performance-related pay. The organization needs to understand which of these will actually motivate their employees—which is easier said than done. But organizations need to do this if they want to retain their employees.
When management is done properly, people clearly understand what is expected of them and how their work contributes to the overall organization goals. It also clears up any confusion on who is expected to do what because it prevents redundant work of different departments. Every employee is enjoined to contribute to the organizational goals and objectives by developing their own strategies and improving processes to achieve the agreed objectives. It also encourages open communication when employees negotiate for realistic goals, at the same time, challenging themselves to develop not just professionally but personally, as well.
2 comments
I like your thoughts on this sir Carlo😁
How to be you? 😋
Good presentation