Incentive management
Introduction
Management by Objectives (APO), also called management by objectives, is a process of defining objectives within an organization by which managers and employees agree with the objectives and understand what they have to do in the organization in order to achieve them. The term "management by objectives" was popularized by Peter Drucker in his 1954 book The Practice of Management.[1].
The essence of APO is participatory goal setting, choosing course of actions and making decisions. An important part of management by objectives is the measurement and comparison of the employee's actual performance with established standards. Ideally, when workers themselves have been involved in setting goals and choosing the course of action to follow, they are more likely to fulfill their responsibilities but it is not because everything happens.
According to George S. Odiorne, the management by objectives system can be described as a process by which the superior and subordinate jointly identify their common objectives, define each individual's main areas of responsibility as to the results expected of him, and use these measures as guides for the operation of the unit and evaluate the contribution of each of its members.[2].
Features and benefits
Some of the important features and benefits of APO are:.
Domains and levels
Objectives can be established in all areas of activities (production, marketing, services, sales, human resources, finances, information systems, etc.).
Some of the objectives are collective, for an entire department or the entire company, others may be individual. Managers must determine the company's mission and strategic objectives. The objectives set by top-level managers are based on an analysis of what can and should be accomplished by the organization within a specific period of time. The functions of these managers can be centralized by appointing a project manager who can supervise and control the activities of the various departments. If this cannot be done or is not desirable, each manager's contributions to the organization's goal should be clearly stated.