Management by Objective program refers to a multi-dimensional model used in administering policies that facilitate linking of objectives, proposals, goals and other performance assessments to the major business outlooks. It is sometimes referred to as “Balance Scorecard”. The major advantage attributed to this program is that it raises the involvement in which employees set their own objectives thus directly increasing motivation needed for attaining the objectives; it is also work-centered. A major weakness that comes out of this program is the fact that it only functions as an organizational philosophy that operates at all organizational levels and therefore lacks the ability to specify the exact level at which the performance should be conducted (Snell, 1992).
Hewlett Packard has successfully implemented a payment structure that solely relies on employee individual’s performance (Peters & Waterman, 2002). The company learned that for it to implement the plan effectively, it had to formulate an organizational tradition that puts emphasis on setting objectives, rating the performance of the job done and the arrangement for an efficient mode of communication between the manager or supervisor and the employee for the purpose of reviewing the performance. Speaking of this company, the program has been effectively used to measure contributions made by each employee and thus decide which employee should be promoted and which should be rewarded. The rewards permitted to the best employees include promotions, salary increments and consistent bonuses. Employees that failed to attain their respective goals are given a warning or in some cases are terminated so as to cut the cost of paying for ineffective services. The company has also involved itself in training its managers or supervisors in ways that facilitate improvement at work levels. Training is held after an extensive research is conducted into the performance recorded (Rudman, 2003).
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