Traditional goal setting is an approach to setting goals in which goals are set at the top level of the organization and then broken into subgoals for each level of the organization. Traditional goal setting assumes that top managers know what is best because of their ability to see the “big picture.” Employees are to work to meet the goals for their particular area of responsibility. This traditional approach requires that goals must be made more specific as they flow down to lower levels in the organization. In striving to achieve specificity, however, objectives sometimes lose clarity and unity with goals set at a higher level in the When the hierarchy of organizational goals is clearly defined, it forms an integrated means- end chain —an integrated network of goals in which the accomplishment of goals at one level serves as the means for achieving the goals, or ends, at the next level. Management by objectives (MBO) is a process of setting mutually agreed-upon goals and using those goals to evaluate employee performance. Studies of actual MBO programs
confirm that MBO can increase employee performance and organizational productivity. However, top management commitment and involvement are important contributions to the success of an MBO program. The following steps are involved in a typical MBO program: head2right The organizations overall objectives and strategies are formulated head2right Major objectives are allocated among divisional and departmental units. head2right Unit managers collaboratively set specific objectives for their units with their managers head2right Specific objectives are collaboratively set with all department members head2right Action plans, defining how objectives are to be achieved, are specified and agreed upon by managers and employee head2right The action plans are implemented head2right Progress toward objectives is periodically reviewed, and feedback is provided head2right Successful achievement of objectives is reinforced by performance based rewards Whether an organization uses a more traditional approach to establishing objectives, uses some form of MBO, or has its own approach, managers must define objectives before they can effectively and efficiently complete other planning activities. Characteristics of Well-Designed Goals 1 Written in terms of outcomes 2. Measurable and quantifiable 3. Clear as to a time frame 4. Challenging, but attainable 5. Written down 6. Communicated to all organizational members Five Steps in Goals Setting 1. Review the organization’s mission (the purpose of the organization). 2. Evaluate available resources. 3. Determine the goals individually or with input from others 4. Write down the goals and communicate them to all who need to know.