Question

Explain in detail how the performance appraisal method Management By Objectives (MBO) impacts 3 stakeholders. 1. Employees 2. Customers 3. Investors

Answer 1

Management by objective is a process of defining specific objectives in an organization. It is a comprehensive managerial system which is a hub of many key managerial activities. It shows that how the specific objectives can be achieved in sequence. It is an performance management approach in which a balance Is sought between the objective of an organization and the objective of the employees.

Impact on employees-It involves employees in the process of goal setting , this works as a motivation for the employees and also increases employee empowerment. This clarifies the job relationships between the superior, subordinates and peers. Employees have a clear understanding of their roles which make all the employees clear understanding of how their activities are related to the achievement of organizational goals.

Impact on customers- when the objectives of an organization are well organized and clear, then the achievement of those objective become easy. One of the main objective of any organization is to satisfy customers. For the achievement of this objective, an organization has to work in a complete effective and efficient manner. This will provide the better results and services to customers.

Impact on Investors- When investors see that organization is well managed and management is working in an efficient manner, then they are willing to invest in that organization. There is a high degree participation of concerned people in setting and performance appraisal, this attracts more and more investors to fund the organization.