General Question

mattbrowne's avatar

Do you get written objectives from your boss at the beginning of the year and does your salary or bonus depend on this?

Asked by mattbrowne (31719points) April 30th, 2009

From Wikipedia: Management by Objectives (MBO) is a process of agreeing upon objectives within an organization so that management and employees agree to the objectives and understand what they are. MBO is often achieved using set targets. MBO introduced the SMART criteria: Objectives for MBO must be SMART (Specific, Measurable, Achievable, Realistic, and Time-Specific). Many managers have employed this management technique and have applied it to their company.

What is your opinion about this system and its principles?

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12 Answers

cwilbur's avatar

I get written objectives from my boss, although they tend to be more subjective than objective. I’m a software engineer, and it’s impossible to predict what projects I’ll be working on in a year, and so impossible to quantify things. It’s also very difficult to set up quantitative performance metrics for software development that cannot be gamed somehow, and so it’s preferable to set subjective or qualitative goals instead.

The point of any management system is to get the employee’s goals for his time at work to line up with the team’s goals, and to get the team’s goals to line up with the company’s goals. The more transparent this is, the better.

qashqai's avatar

Yes I do get written objectives. Then, every semester we are evaluated on each single cluster.
At the end of the process I get an overall performance indicator. I get a bonus if I mantain or overperform, comparing to the previous evaluation.

e.g. if I got 90% in june, i get a bonus only if I get another 90% or more in january.

Clearly, the bonus is related to your performance, ranging from 0%(underperforming) to 5–10% (mantaining the same grade) 15–20% (overperforming).

My opinion? While I agree with MBO in principle, I think the quality of each MBO system is too much conditioned by HR politics, and that even the most measurable cluster can be relative, depending on your personal point of view.

avalmez's avatar

the problem with it is as @cwilbur points out. in many cases SMART objectives can be defined, but then reality happens and last month’s objectives are out of the window.

mbo was quite the management fashion last decade and i guess still used by some companies, but i would guess it’s most effective for positions that are routine in nature.

for example, for persons working on the line you could establish objectives such as, “produce a minimum of x widgets per some unit with a defective rate of y% over the next quarter”. assuming x and y are reasonable for the position, specific, measurable, achievable, realistic, and time-specific.

obviously, if either the nature of one’s work or deliverables tend to be dynamic, mbo can be quite ineffective, and when forced to be effective, inefficient.

but, that’s mho.

cwilbur's avatar

It’s also important to remember that you get what you reward. If you reward salesbeings for closing deals quickly, you’ll get a lot of deals closed quickly, without regard to the feasibility of the project they’re selling. If you reward programmers for fixing bugs, but not for producing bug-free code in the first place, you’ll get shoddy code with lots of bugs.

avalmez's avatar

yes, as a former developer and development manager, i am familiar with the “hero syndrome”.

avalmez's avatar

and actually, my sample objective may be SMART as stated, but not smart in fact. a more apropriate example would read: “produce a minimum of x widgets per some unit with a defective rate of less than y% over the next quarter”

robmandu's avatar

Yes, I get written objectives.

Yes, theoretically my pay increases are tied to them.

But, realistically my pay increases are at the bottom of a long hill, the top of which is whether the company makes its revenue targets for the year, then if my division does, and then it’s all parceled out for us grunts by mid-level mgmt squabbling and cage matches.

Three to four months after fiscal year end, I finally get my “taste” long after all my official objectives have been forgotten.

But I’m not bitter.

mattbrowne's avatar

I know MBO isn’t perfect. But has someone invented a better system?

wundayatta's avatar

Staying in touch with your employees and having personal knowledge of what they are doing? Knowing if their work is getting done.

cwilbur's avatar

Formal management systems are a way of compensating for bad managers. Good managers can do what @daloon says; bad managers need a system to slot their employees into.

cak's avatar

It was the opposite for us. (I no longer work at this company.) I was expected to write out my objectives, goals and things that I really would like to see happen for the entire department and outline them for the year. Our bonus and salary were determined based on performance and mine was directly impacted on how much I could save during the development stage of a project. Also, the more money I was able to secure from the manufacturer, the better – my bonuses were directly tied to those numbers.

I must say that the person I worked under, had a great way of looking at things. He could set our objectives, but ultimately, we knew more about what was going on, project by project, than he did. (at any given moment) So why should he set the goals? Now, if someone turned in an outline that was so far off base, he would meet with the person and ask questions and ask for a new outline. We had an amazing amount of freedom, working under him.

mattbrowne's avatar

@daloon and @cwilbur – Yes, with good and also honest managers interacting with their direct reports on a daily basis there are alternatives. Let’s leave out the bad managers for now. In my opinion most managers are actually average managers, some a little above others a little below but still okay. At the end of the year it all boils down to fairness when dealing with bonuses. Gut feeling might be better sometimes, but not always. Written smart objectives can help in my experience.

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