Benefits: One major benefit of the MBO process is its ability to focus management and employee attention on specific activities that directly influence performance and goal attainment. Also, MBO ties the goals of each manager to the goals of managers on levels above and below, acting as a coordinating system and facilitating teamwork throughout the organization. Thanks to these links and to the periodic reviews, managers communicate more clearly and more frequently about goals, plans, and results. Further, the MBO process fosters participation, which can encourage stronger commitment and motivation. MBO also encourages managers to exercise self-control in implementing their action plans, which can help develop personal and professional skills. Finally, MBO provides an unbiased and systematic way to measure the contribution of managers and employees.
Limitations: Although the MBO process offers many benefits, it also has a number of limitations. Without consistent involvement and commitment from top management, an MBO program can prove ineffective. Another limitation is the difficulty of setting specific MBO goals for particular jobs and areas of performance. Also, an MBO program may overemphasize short-term goals and performance, postponing or ignoring activities needed to maintain long-term organizational health. Moreover, individuals may emphasize their own MBO goals to the detriment of the goals of other individuals and groups. The efficiency of the process (and employee motivation) can also be limited by the mandate to complete forms about goal setting, performance standards, and reviews. Finally, if the MBO process is administered too rigidly, managers may lose the flexibility to effectively respond to environmental changes.
Limitations: Although the MBO process offers many benefits, it also has a number of limitations. Without consistent involvement and commitment from top management, an MBO program can prove ineffective. Another limitation is the difficulty of setting specific MBO goals for particular jobs and areas of performance. Also, an MBO program may overemphasize short-term goals and performance, postponing or ignoring activities needed to maintain long-term organizational health. Moreover, individuals may emphasize their own MBO goals to the detriment of the goals of other individuals and groups. The efficiency of the process (and employee motivation) can also be limited by the mandate to complete forms about goal setting, performance standards, and reviews. Finally, if the MBO process is administered too rigidly, managers may lose the flexibility to effectively respond to environmental changes.