Page 68 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Unit 6: Methods of Performance Appraisal

6.3 Results-oriented Appraisal Notes

The results-oriented appraisals are based on the concrete performance targets which are usually
established by superior and subordinates jointly. This procedure has been known as Management
by Objectives (MBO).
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Did u know? What is MBO?
The definition of MBO, as expressed by its foremost proponent, Dr. George S. Odiorne,

is: “Management by objectives is a process whereby the superior and subordinate managers of an

organization jointly identify its common goals, define each individual’s major areas of responsibility
in terms of the results expected of him, and use these measures as guides for operating the unit and
assessing the contribution of each of its members.”
MBO is, thus, a method of mutual goal-setting, measuring progress towards the goals, taking
action to assure goal attainment, feedback, and participation. It is a result-oriented philosophy,
enabling an employee to measure progress toward a goal which the employee often has helped
to set In the goals-setting phase of MBO, a superior and subordinate discuss job performance
problems and a goal is agreed upon. Along with mutual goal-setting, a major component of
MBO is the performance review session between the superior and subordinate, which takes place
regularly to evaluate progress towards specifi ed goals.
The key features of management by objectives are as under:
1. Superior and subordinate get together and jointly agree the list the principal duties and
areas of responsibility of the individual’s job.

2. The subordinate sets his own short-term performance goals or targets in cooperate with his
superior.
3. They agree upon criteria for measuring and evaluating performance.
4. From time to time, as decided upon, the superior and subordinate get together to evaluate
progress towards the agreed-upon goals. At those meetings, new or modified goals are set

for the ensuing period.
5. The superior plays a supportive role. He tries, on a day-to-day basis, to help the subordinate
achieve the agreed upon goals, he counsels and coaches.
6. In the appraisal process, the superior plays less of the role of a judge and more of the role
of one who helps the subordinate attain the organization goals or targets.
7. The process focuses upon results accomplished and not upon personal traits.

Note Steps in MBO
There are four main steps in MBO:
1. Define the job: Review, with the subordinates, his or her key responsibilities and

duties.

2. Define expected results (set objectives): Here specify in measurable terms what the
person is expected to achieve.
3. Measure the results: compare actual goals achieved with expected results.
4. Provide feedback, appraise: Hold periodic performance review meetings with
subordinates to discuss and evaluate the latter’s progress in achieving expected
results.

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