Management by Objectives as a Motivational,Appraisal and Effective Management Tool

This article shares the experience of Kasturba Hospital, Manipal, a tertiary care teaching hospital, in implementing management by objectives (MBO) as a motivational, appraisal and effective management tool. Keeping up its position as one of the finest medical college teaching hospitals, the management had initiated the MBO concept in October 2003. The policy of the hospital was evolved through a brainstorming session with employees and with the help of extensive feedback from the prime customers, that is, patients and medical students. Extensive awareness programmes were held to drive down the policy to each and every employee. Top-level objectives were fixed to measure the achievement of the policy. The respective departments in consultation with the top management defined individual departmental objectives. Review of the levels of achievement and newer actions to achieve these objectives were done in various meetings held from time to time. Findings after nine months showed that there was a substantial improvement in the overall performance. This shows that performance is better when people had specific objectives than when they are simply asked to do their best. The degree of accomplishment of the objective is also used as an appraisal tool and it is linked to the incentives. Problems faced in the implementation of this policy are also discussed.