1. Management by objective
MBO

2. Goal-Setting Theory
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Many believe that everyone already
sets goals
But this is not true
When groups do set goals, output
invariably increases over groups that do
not set goals.

3. Goal setting and incentives
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Incentives improve performance – but
Only if they cause individuals to set and
commit to attaining specific goals

4. Why does goal setting effect
performance?
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Goals focus activity
Goals regulate expenditure of effort
Difficult goals lead to more persistent
effort than do easy goals
These 3 are critical to the MBO process

5. What is MBO?
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We set goals and then performance is
judged based on how well we
accomplish these goals.
Intellectually – this seems like the way
to go – and has for years
But?

6. The goals must be:
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Mutually agreeable to employee and
supervisor
Demanding (stretching) but achievable
Within the control of the employee
Reviewed periodically for modifications
based on events

7. The goals must also be:
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Clearly defined
Simple to understand
Written

8. Problems with MBO programs

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Employees get systematically more
credit or blame than deserved
Bias still exist in rating.

9. The end

10. The end