Understanding Management by Objective (MBO)

What is the primary focus of goal setting in Management by Objective (MBO)?

• To establish a rigid set of rules

• To align individual goals with organisational objectives

• To create competition among employees

• To reduce the workload of managers

Answer explanation

The primary focus of Management by Objective (MBO) is to align individual goals with organisational objectives, ensuring that employees' efforts contribute directly to the overall success of the organization.

Which of the following is a key step in the performance evaluation process in MBO?

• Random selection of employees for evaluation

• Setting goals without employee input

• Regular review of progress towards goals

• Ignoring past performance

Answer explanation

Regular review of progress towards goals is essential in MBO as it ensures that employees stay aligned with their objectives and can make necessary adjustments, fostering accountability and performance improvement.

How does feedback and communication function in MBO?

• Feedback is given only at the end of the year

• Communication is one-way from manager to employee

• Continuous feedback and open communication are encouraged

• Feedback is optional and not necessary

Answer explanation

In MBO, continuous feedback and open communication are essential for aligning goals and improving performance, making it crucial for both managers and employees to engage regularly rather than just at year-end.

Which of the following is a benefit of implementing MBO?

• Increased ambiguity in job roles

• Enhanced employee motivation and engagement

• Decreased accountability

• Reduced need for management

Answer explanation

Implementing MBO (Management by Objectives) enhances employee motivation and engagement by aligning individual goals with organizational objectives, fostering a sense of ownership and accountability.

What is a common challenge faced during MBO implementation?

• Lack of clear objectives

• Overemphasis on qualitative goals

• Excessive focus on short-term results

• Too much flexibility in goal setting

Answer explanation

A common challenge during MBO implementation is the excessive focus on short-term results, which can lead to neglecting long-term goals and overall organizational growth.

In MBO, who is primarily responsible for setting goals?

• Only the top management

• Only the employees

• Both managers and employees collaboratively

• External consultants

Answer explanation

In MBO (Management by Objectives), goal setting is a collaborative process involving both managers and employees. This ensures alignment and commitment to the objectives, making 'Both managers and employees collaboratively' the correct choice.

What role does communication play in the MBO process?

• It is used to enforce rules

• It is a tool for negotiation

• It facilitates understanding and alignment of goals

• It is primarily for conflict resolution

Answer explanation

Communication in the MBO process is crucial as it facilitates understanding and alignment of goals among team members, ensuring everyone is on the same page and working towards common objectives.

Which of the following is NOT a benefit of MBO?

• Improved organisational performance

• Increased employee stress

• Better resource allocation

• Enhanced clarity of roles

Answer explanation

Increased employee stress is NOT a benefit of MBO. While MBO aims to improve performance, resource allocation, and clarity of roles, it can inadvertently lead to stress due to pressure to meet specific goals.

What is a potential drawback of MBO related to goal setting?

• Goals are too flexible

• Goals may become outdated quickly

• Goals are always too easy to achieve

• Goals are irrelevant to the organisation

Answer explanation

A potential drawback of MBO is that goals may become outdated quickly due to changing circumstances or priorities, making them less relevant and effective for guiding performance.

How often should performance evaluations occur in an effective MBO system?

• Once a year

• Every five years

• Regularly, with periodic reviews

• Only when issues arise

Answer explanation

In an effective MBO system, performance evaluations should occur regularly, with periodic reviews to ensure goals are being met and to make necessary adjustments. This approach fosters continuous improvement and accountability.