The main stages of MBO are as follows:
(1) Setting Objectives:
First of all, the mission and the purpose of an institution must be defined which are essentially long-term in nature and their scope extends to the whole institution. These objectives are derived from the external environment. This is followed by specific, short-term, functional objectives for each department/section/ class. For example, by the year 2002, the institution must have at least three students in the merit list.
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This is followed by identifying key result areas and responsibility for results is fixed with specific individuals. This will help an institution to focus its scarce resources on the most significant activities.
Some of the key result areas could include innovation, prestige of the institution, results, work performance, physical and financial resources, managerial performance and development, staff development, systems implementation and so on.
In MBO, goal-setting is a participatory activity which ensures realistic goals.
(2) Action Planning:
Having determined the objectives, plans are formulated to achieve them, spelling out the activities to be performed within a specified time period. These action plans are laid down for individuals as well as teams. Every action plan should incorporate the strategies to be used, the assignment of responsibilities to specific persons, allocation of resources, sequential arrangement of activities and the time-frame for completing each activity.
(3) Performance Review:
There should be formative assessment of progress towards the achievement of objectives to be done periodically. These reviews are aimed at future corrective actions and improvements supported by suggestions and guidance from the superior for enhancing capabilities and facilitating performance. Performance review is basically self-appraisal designed to facilitate career planning, education/training and development.
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In conclusion it may be asserted that theories about management make the world clearer, provide a sense of order, and illuminate the non-obvious. They help administrators understand ‘what is’, ‘why’, ‘how’, ‘when’ and ‘what should be’.