ABSTRACT

This research paper was carried out with the main objective to examine the “The impact of management by objectives on employee’s performance”. The main tool for collecting data in this study was the questionnaire and percentages were used to analyze information gotten from the various indicators. This research work was limited to the Cameroon Development Corporation in Bota Limbe. Information gotten from our finding make that the corporation practice management by objective which enables them to achieve their objective’s efficiently and effectively. From the conclusion arrived we recommend that the management by objectives should be used more often in order to improve employee’s performance and productivity.

 

CHAPTER ONE

INTRODUCTION

1.1 Background to the study 

Management needs a lot of tools to be able to administer effectively in the day to day running of the business. Management by objectives is one of such tools. It is a way of getting improved results in a managerial method whereby the superior and the subordinate managers in an organisation identifies major areas of responsibility, in which they will work. Set some standards for good or bad performance and the measurement of results against those standards (Derek

2005: 156). Management by objectives is also called managing by objectives.

However, there have been certain individuals who have long placed emphasis on management by objectives and by so doing have management by objectives refers to a structured management technique of setting goals, for any organizational unit. Odiorne (1981:1) defines MBO as a system of management whereby the superior and subordinate jointly identify objectives, define individual major areas of responsibility in terms of results expected, and use these objectives and expected results as guides for operating the unit and assessing the contribution of each of its member.

Management by objectives can work in any size of an organisation if the procedures are understood and managers are patient in letting the system set in first. Management by objective is an effective planning, control and development system. Management by objectives was defined by

Koontz and O’Donnell (1968: 485) as a technique of system or method of management whereby the superior and subordinate managers of an organization agreed on its broad goal, translate these goal into a chain of specific short term goals, defined each individuals major areas of responsibility in terms of result expected continually reviewed the accomplishment as the sole basis of assessing and rewarding them. Management by objectives gives the employee the opportunity to participate in decision making, the limits within these limits. It assumes that the employees have been properly selected and trained, and is informed that the employee will be responsible for achieving the desired results in the organisation.

Organisations are ubiquitous. According to Mullins (2005: 256), organizations are designed by people to overcome individual limitations and achieve individually. Hence, the organization becomes a means of survival for the people and exerts an important daily influence on the life of the people and the way they live. The major decider for the survival of any organization is the presence of capable men and women with the right technique to combine the organization resources (Man, Machine, materials and Money) to achieve organizational goals. It is appropriate to note that the management of companies in Cameroon lacks sufficient techniques to make them manage effectively. Some of these tools are not used and when used, they are not properly utilized. Management by objective is not only a managerial strategy to achieve well-coordinated managerial goals, but it is also a popular management technique that cut across all human activities namely business areas, educational, government, health care and non-profit organization.

Most of the techniques, system, tools of management are hardly understood resulting in losses and damages to the organisation. Besides, it is the wrong use of techniques and unwillingness of top management to utilise the right tool to solve the management problems. It is due to these that the researcher intends to find out the prospect and problems of management by objective as an instrument for improving employee performance in Cameroon Development Corporation (CDC Limbe.

At its most basic level, MBO sits on top of a long history and extensive research on the value of goals in shaping human behaviour and increasing performance. Humans seem to need goals to achieve extraordinary outcomes. The connection between goals and elevated performance has been in the literature as long as writing has been a part of civilization. In the last 50 years, there have been more than 300 studies completed demonstrating repeated findings, or “basic truths” if you will, about humans and goals. Truths incorporated in repeated findings that:

1. People accomplish beyond their historical norm when they use goals.
2. People respond positively to stretch goals that they judge to be reasonable or attainable.
3. People stay attached to goals when leaders support a goal process by both modelling the goal-related behaviour and providing feedback relative to goal progress.

 

In the ’60s, ’70s and 80’s it seemed like a good thing to manage work efforts by goals or objectives, hence the term “management by objectives.” The idea was to improve management and work productivity in general by being more defined about the intended outcomes. MBO principals contained many precursors to the basic building blocks used by current project management tenants. See if you can recognize them as I review some of what the basic MBO principles included:

1. Establish a set of top-level strategic goals.
2. Create a cascade of organizational goals that are supported by lower-level definitive objectives and action plans.
3. Develop an organizational role and mission statement, as well as specific objectives and action plans for each member, often in a manner that involved participative decision making.
4. Establish key results and/or performance standards for each objective.
5. Periodically measurement/assessment of the status or outcome of the goals.

The assumptive strength behind the MBO model, as commonly practised, is the notion that if the desired outcome is defined as a goal and progress is measured towards reaching that goal, then the chances of reaching that outcome are enhanced. From a simplistic view, if you start out with a goal in mind, you are more likely to reach it or conversely, “If you don’t know where you are going, you’ll probably get there.”

But MBO theory didn’t survive as a leading management process in the work arena. Why?

One weakness was it’s the assumption that setting and tracking goals, often broadly or vaguely stated, or disconnected from day-to-day operations, would lead to performance improvement.

Goals were accurately noted to regularly get stated and stored in a bound annual volume somewhere and only occasionally used as a measurement or reference device

 

1.2 Statement of the problem

It is pertinent to note that management of companies in Cameroon lacks sufficient technique to effectively manage their corporations especially CDC which is a very large parastatal corporation. Some of these tools are not used and when used they have not properly utilised e.g. management by objectives. Management by objective if not only a managerial strategy that CDC Limbe needs to achieve a well co-ordinate management performance, but it is also a popular management technique that most modern corporations use now to fully realize their goals.

Unfortunately, many of this corporation is yet to fully adopt this technique in enlisting commitment and support of their staff.  They do not often include staff in standard/goal setting that involves them thus inhibiting control and rendering achievement of most goals futile.

 

1.3 Objectives of the study 

The broad objective of the study is to find out the prospects and problems of management by objectives as an instrument for improving employee performance in CDC Palm oil Plantation.

The specific objectives of the study include: 

1. To determine problems affecting management by objective as an instrument for improving employee performance.
2. To find out if both managers and employees participate in the setting of goals to be achieved in the organisation.
3. To determine whether management by objective leads to improved employee performance.

 

1.4 Research question 

In pursuit of the research objective of the study, the following research questions have been formulated.

1. What are the problems obstructing the use of management by objectives as an instrument for upgrading employee performance?
2. To what extent do both managers and employees participate in the setting of goals to be achieved in the organisation?
3. How does management by objective lead to improved employee performance?

 

1.5 Hypotheses  

The following hypothesis will guide the study:

Ho. Management by objective does not have an impact on employee performance.

H1. Management by objective have an impact on employee performance

 

1.6 Significance of the study 

Through this study, the corporation will see the need to involve subordinates in setting objectives as it will elicit higher productivity, profitability growth, and sustainability of the organization.

With higher quality goods and products through the use of MBO, the products will be valued better in the World Market, thereby increasing the Gross Domestic Product (GDP) of the country.

The study will be useful to those who will carry out studies in related areas in future. It will serve as reference material to them. Even, the findings can provide the bases for further studies.

To the researcher, it will add knowledge to her managerial skills and enable her to fulfill partial obligations in research to acquire a bachelor degree.