The impact of management by objectives on the Performance of employees in an organization. Case study; energy co. Limited Enugu

Description

CHAPTER ONE

INTRODUCTION

1.0 BACKGROUND OF THE STUDY

This research is on the impact of management by objectives on the Performance of employees in an organization. Case study; energy co. Limited Enugu. 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 managerial action. Management by objectives can be described as a managerial method where by the superior and the subordinate managers in an organization identify 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 objective 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 given impetus to its development as a system. Management by objectives refers to a structured management technique of setting goals for any organizational unit.

George S. Odiorne (1981:1) in his book management by objectives defined this concept 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. Besides, Odiorne points out that management by objectives is a “system of management” an overall frame work used to guide the organizational unit and outline its direction. He went further to point out that “the superior and subordinate jointly identify objectives”. In other words, it is a participative management procedure that requires commitment and co-operation. The definition deals with identifying the “results” that are expected. Thus management by objectives concentrates on the output of the organisation evaluating people by assessing their contribution to this output.

Management by objectives is a strategy where in the management sets specific goals for the employees to accomplish within a fixed time period. Management by objective is a dynamic system which seeks to integrate the company a need to clarify and achieve its profit and growth goals with the managers need to contribute and develop himself. It is a demanding and rewarding style of managing a business.

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

Management by objective was defined by Koontz and O’Donnell (1968:485) as a technique or system or method of management where by the superior and subordinate managers of an organization agreed on its broad goals, translate these goals 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 employee has been properly selected and trained, and is informed that the employee will be responsible for achieving the desired results in the organization.

Organizations are ubiquitous. According to Mullins (2005:256), organizations are designed by people to overcome individual limitations and achieve individually. Hence, organization become 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 organization goals.

It is appropriate to note that management of companies in Nigeria lack 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 a well co-ordinated managerial goal, but it is also a popular management technique that cut across or pervade all human activities namely business areas, educational, government, health care and non profit organisation.

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 technique and unwillingness of top management to utilize the right tool to solve the management problems.

It is on these trends that the researcher intends to find out the prospect and problems of effective utilization of management by objectives by companies in Nigeria. In order to investigate some of the above problems, one of the leading financial institutions in the country, Energy Co. of Nigeria Plc Okpara Avenue Enugu has been chosen.

1.1    STATEMENT OF THE PROBLEM

It is pertinent to note that management of companies in Nigeria. Lack sufficient technique to make them manage well. Some of these tools are not used and when used they are not properly utilized. Management by objective if not only a managerial strategy to achieve a well coordinated managerial goals, but it is also a popular management technique that cut across or pervade all human activities namely; business areas, educational, government, health care and non-profit organization.

Most of these objectives are hardly understood resulting in losses, breakage’s and on so. The worse are business in the medium range where most Co.s fall. Most companies hand down objectives to subordinates without adequate explanation, hence failure of management by objectives in such cases. Management by objectives will remove all of these problems mentioned above and subordinates will now formulate objectives, set targets according to their strength and weaknesses, no stoppages, no delays, no losses to the companies. This will help subordinates to formulate realizable goals.

1.2 OBJECTIVE OF THE STUDY

The broad objective of the study is to find out the impact  of utilization of management by objectives on employees in an organizations in Nigeria.

The specific objective of the study includes: –

• To determine problems affecting the effective utilization of management by objectives in an organisation.
• To determine the level of managers commitment to achieving organizational objectives.
• To find out the level of participation of both managers and employees in the setting of goals to be achieved in the organization.
• To determine whether employees are given appropriate authority and responsibility for achieving the set objective.
• To recommend strategies for effective utilization of management by objectives.

1.3 RESEARCH QUESTION

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

• What are the problems militating against effective utilization of management by objective in an organisation.
• To what extent do both managers and employees participate in the setting of goals to be achieved in the organization?
• To what extent are employees given appropriate authority and responsibilities for effective management by objective?
• To what extent do motivation determines employee’s performance towards achieving the objectives of the organization.

1.4 SIGNIFICANCE OF THE STUDY

Practicing management by objective will make the management of Energy Co. Limited Enugu to be more assertive in their decision making. It will assist the subordinate in Energy Co. Enugu to be able to identify themselves with the objectives of the company and the role they will play.

It will assist subordinates to be able to formulate their individual or group objectives, which are reliable. This will result in total commitment to objective and efficiency and effectiveness will result.

1.5 SCOPE AND LIMITATION OF THE STUDY

This research work is limited to Energy Co. of Nigeria Plc Enugu and how different organisation can be managed better by the managers setting the goals and all the company members working towards achieving the goals.

There are many factors that act as constraint to the effort of the researcher in the course of writing this project. Most prominent of the factors are:

1. TIME: The research work is a big task and as such requires time and energy, which was not on the researcher’s side.
2. FINANCE: This is another limiting factor. Due to limited financial resources available, the researcher cannot procure all the needed material is for this project. For instance, to get books from the library the researcher has to pay library, which the researcher does not have all the time.
3. COST: The cost of transportation to and from Energy Co. is very high for the researcher.
4. SECRECY: Nigerians dislike activities that tend to probe them. They tend to avoid researcher because they feel their activities that are not meant for public consumption would be exposed through research work.

 1.6 DEFINITION OF TERMS

1. a) MBO: Management by objectives.
2. c) Co: Company
3. d) OND: Ordinary National Diploma
4. e) Sc: Bachelor of Science.