OBJECTIVE SETTING

“EFFECT OF MBO ON EMPLOYEE

PERFORMANCE”
Name Registration
#
Muzamil Arshad 14062

Organization : Corporate Sector -

Engro
CONTENT
01 INTRODUCTION

02 WHAT IS MBO
05 METHODOLOGY IN ENGRO

03 CONCEPTUAL FRAMEWORK
06 ANALYSIS AND RESULTS
EVALUTION

04 PROS AND CONS

07 CONCLUSION

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TOPIC INTRODUCTION
PURPOSE METHODOLOY
● Questionnaire Survey
Effect of Management by Objectives on
● Respondent‘s demographic profile
● Performance appraisal
● Descriptive analysis
● Employee satisfaction
● Pearson correlation analysis
● Employee Effectiveness
● Regression analysis Appraisal
● Employee productivity
● Result Evaluation and Conclusion

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WHAT IS MBO ?
MBO STEPS IN MBO
● Jointly goal setting by Superior & Subordinate ● Setting of organizational purpose and objectives
managers
● Key result area
● Define major responsibilities
● Setting subordinates objectives
● Well define expectation
● Matching resources with objectives

MAIN COCEPT and FEATURE ● Appraisal

● Joint goal setting ● Recycling

● Clear understanding of Objectives

● Roles and Responsibility of Each individual

● Makes way to attain maximum result

● Periodic review of performance

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CONCEPTUAL FRAMEWORK

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MBO Pro & Cons
Bright Side Limitation
● Easy to implement and measure ● Possibility of missing integrity, quality
● communication between managers and subordinates
● Time consuming, complicated, lengthy and
regarding goals, action plans
expensive
● Job satisfaction is increased
● Failure to teach MBO philosophy
● employees are more self-directed
● Reward-punishment approach
● Outcome oriented

● Goals alignment with organization ● Problem of co-ordination

● Raises employee morale ● Pressure oriented

● Facilitates personal leadership

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 OBJECTIVE METHODOLGY AND PROCESS IN ENGRO
“MANAGEMENT BY OBJECTIVE”

Team gathering
and Objective Action Item Final Appraisal
Setting developed and Employee
discussion Evaluation

Increment and
Baseline and Mid Year Review Bonus reward
Stretch Target in System based on
Define performance
Variable of Employee Satisfaction
Organizational Personal
● Organization Development ● Personality
● Policies of Compensation and Benefit: ● Expectation
● Promotion and Career Development
● Age
● Job Satisfaction
● Education
● Job Security
● Gender difference
● Culture
● Relationship with Supervisor

● Participation in Decision

● Modern office equipment

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Survey Hypotheses
H1 : Management by Objectives are applicable
H2 : Management by Objectives have a positive effect on Performance appraisal
H3 : Management by Objectives have a positive effect on Employee satisfaction.
H4 : Management by Objectives have a positive impact on Consequences of Employee
satisfaction.
H5 : Performance Appraisal have a positive effect on Employee satisfaction.
H6 : Employee Satisfaction increase effectiveness of the employees.
H7 : Employee Satisfaction have a positive effect on employee‘s productivity
H8 : Rewarding system based on results has positive relationship with employee‘s satisfaction

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 Data Collection & Method:
To measure the mean scores
and their variability Correlations among the variables
Standard
Daviation
Mean Pearson
Calculation Corelation
Sample Size: 60
03 Test the hypotheses
02 04
Employee Sampling Regression
& Analysis
Question surey 01 STRENGTH 05

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 Descriptive Analysis
• Five-point scale is used to collect data and mean value of variables ranges 1 to 5
• A mean value below 2.5 is below average
• 2.5 to 2.9 above average
• 3 to 3.9 is moderate average Research In Engro
• 4 to 5 is high
Article Data

Most of the respondents think that Management by objectives (MBO) is applicable in their organization. Therefore,
the hypothesis H1 is highly accepted for the high average mean value
 RESULT BASED ON ANALYSIS
Hypothesis Technique Results Conclusion

H2: Management by Objectives have a positive effect on Regression P Value < Rejected
Performance appraisal 0.05
H3: Management by Objectives have a positive effect on Regression P value > Accepted
Employee satisfaction 0.5
H4: Management by Objectives have a positive impact on Regression P Value < Rejected
Consequences of Employee satisfaction 0.05
H5: : Performance Appraisal have a positive effect on Correlation R = 0.715 Accepted
Employee satisfaction
H6: : Employee Satisfaction increase effectiveness of the Correlation R = 0.472 Rejected
employees
H7: Employee Satisfaction have a positive effect on Correlation R= 0.419 Rejected
employee‘s productivity
H8: Rewarding system based on results has positive Correlation R= 0.62 Accepted
relationship with employee‘s satisfaction

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 CONCLUSION
Modern tools for Employee performance • Employee satisfactions with employee
evaluation productivity and effectiveness have
weak correlation
Applicable to most of corporate organization in • Employees are normally satisfied with
Pakistan and all over the world their job even though their satisfaction
level is low and so this satisfaction may
not be increased employee‘s
Most of Employees are satisfied with MBO productivity and effectiveness

• Employ Reward system increase the

Performance appraisal has a highly positive effect
Employees satisfaction
on employee satisfaction

MBO has a positive relation with performance

appraisal and consequences of employee
satisfaction
Reference
● Md. Asfaqur, Hasibul, Rakibul & Nayan Kumar.(2020). The Effect of Management by Objectives on
Performance Appraisal and Employee Satisfaction in Commercial Banks. Department of Business
Administration
● Robert Rodgers, John E Hunter. (1991). Impact of management by objectives on organizational
productivity .Journal of Applied Psychology 76 (2), 322

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