Abstract

Management by objectives (MBO) and management by results (MBR) represent the major approaches used by managers to align system objectives with employees' goals and behaviors. The practice continues despite warnings from quality experts that MBO often leads to internal competition, selfishness, and a lack of cooperation. According to W. Edwards Deming, MBO/MBR focuses on outcomes that are typically expressed as an arbitrary numerical goal or target. The way to improve results is to focus on the system that causes and that a goal beyond the capability of a system will lead to frustration, discouragement, and loss of pride as employees were held accountable for things beyond their control. Some managers advocate the use of accounting targets, but the use of numerical goals and targets erodes the ability or organizations to meet the expectations of customers. Supporters of quality management must view organizations as systems of interdependent processes that must work together to meet the overall goal. Clearly defined goals, employees' understanding of their jobs in relation to such goals, and cooperation among interdependent departments are necessary. While organizations recognize the importance of employee empowerment in reaching their goals, few realize that empowerment cannot occur when organizations cling to MBO/MBR management practices and rankings. Managers must realize that their real role is to improve the system rather than lead the organization, use control charts to interpret processes, alter their view of the purpose of measurement, and remember that management information systems may provide noise that, in some cases, is used by management as signals. Managers can avoid errors caused by confusing noise with signals by studying their systems with appropriate measurements.