A socially conscious MBO system. How best to engage employees in today’s climate!

Early use of MBO focussed on the ‘business’ of the corporation and the role of the employee in its commercial pursuits. Questions such as how can I:

• make the company more productive,

• earn a better return on its investment, or

• improve product/service quality, were paramount.

Clauses in the development of an employee’s MBO emphasised commercial concerns and these were further focussed since there was, in most cases, a single reporting relationship (a boss) and a structure reporting to the manager where a similar focus was expected. The result was, most often, a singular focus on commercial matters from top to bottom. The era of relevance was the 1960s through to early 2000s.

Times have changed. A generation or two later different ideas about the role employees wish to play have changed. Any company contemplating the introduction or the modification to its MBO system needs to engage employees in a discussion of their needs. By so doing, one could anticipate more buy in and loyalty to the corporation and a better working environment.

Applications of the original MBO thinking did not exclude social considerations but the application seldom paid much attention to this seen-to-be rather indirect concern of the employee. Business was business!

John Humble, an old colleague and in his time an international authority on MBO who has since died, defined – “Management by objectives as a dynamic system which integrates the company’s need to achieve its goals for profit and growth with the manager’s need to contribute and develop himself.”

“Management by Objectives (MBO) is a result-centered, non-specialist, operational managerial process for the effective utilization of the material, physical and human resources of the organization by integration of the individual with the organization and the organization with the environment. At its best, management by objectives is a system that integrates the company goals of profit and growth with the managers needs to contribute to the company’s well-being and develop himself.“

Perhaps only now can John’s definition be fully realized.

But today’s employees, partners, or co-workers are demanding more of a voice and have convenient means of getting a message out; Facebook, linked in, Instagram, TikTok etc. It behooves any company to broaden the way in which its employees, including managers and senior executives, can express their broader vision of a company’s destiny and their means of participating.

Such a desire does not make the installation or optimization of a MBO system any easier. It requires more thought and more time but maybe more effective.

What do you think about MBO and its adaptation to current times? Let’s start a discussion!