Managing by Objectives (MBO) and Government Agencies: A Critical Review

Abstract

The objective of this study is to examine the impact of Management by Objectives (MBO) on employee’s performance, encouragement and motivation, self-confidence and contentment in public sector organizations, when they introduced MBO approach within an organization. We achieved our objective after review numerous and extensive literature and found that MBO improved the performance, efficiency, effectiveness and employees’ confidence in the public sector organizations. The employees who participate in management by objectives program (MBO) know what exactly management is expecting from them. They better know about the organizational goals, their morale, performance, and job satisfaction are high. They are also more confident than those employees who don’t participate in MBO program. Management by Objectives was recommended as a method to enhance administration efficiency for over sixty- years. Drucker (1954) was first introduced this term to setting organizational objective with the systematic way that would support to boost the organization satisfaction and employee’s performance within the organization. The quantitative study is not possible because of limited time. A large number of private sector organizations have already introduced MBO to improve the management and employee’s performance. This study gives support to introduce MBO in the public sector agencies. In summary, the impact of MBO system depends strongly on the design and implementation of its features. If it based on the standard, good practice and principle, then MBO can increase the performance effectively and efficiently in public sector firms.

Keywords: Public sector agencies, Management by Objectives (MOB), Management by Results (MBR), employee’s effectiveness and efficiency, organizational objectives, employee morale and confidence, and management.