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14-12 Human Relations [CH 14

Table 14.2 What Contributes to High Morale?
Relative Manager Employee
Importance Rankings Rankings

Most Good wages Full appreciation for
important Job security work done
Promotion and growth Feeling "in" on things
with company Sympathetic understanding
of personal problems

Less Good working conditions Job security
Important Interesting work Good wages
Management loyalty to Interesting work
workers

Least Tactful disciplining Promotion and growth
important Full appreciation for with company
work done Management loyalty to
Sympathetic understanding workers
of personal problems Good working conditions
Feeling "in" on things Tactful disciplining

Source: Adapted from Paul Hersey and Kenneth H. Blanchard, Management of Organizational Behavior
(Englewood Cliffs, NJ.: Prentice-Hall, 1977), p. 47.

the individual employee and his manager. It should also enable the worker to relate his
performance to overall organizational goals. Finally, it should serve as a basis for
decisions about salary increases and promotions.
MBO is not limited to any single level in the organization. Ideally, it begins with

the president, who should set some personal job objectives in consultation with the
board of directors. The process then proceeds throughout the organization, extending
to every employee.
MBO fails when the employee does not see where growth and improvement can

occur.

Overcoming Potential Problems with MBO
MBO programs have merit if used with judgment and a great deal of planning. The
success MBOs is greatly affected by the degree to which top management support and
are involved in its implementation. Additionally, management must make a conscious

effort to avoid overburdening the MBO system with too much paperwork and
recordkeeping.
Another potential problem with an MBO program is the difficulty some managers
have in communicating with and listening to individual employees when formulating
short-term performance goals. When such goals are assigned rather than agreed to by
both parties, the result is typically resentment and lack of commitment on the part of
the employee. If an objective is to increase productivity (output) 15% and the
employee states that the machinery is operating at full capacity or breakdowns occur
too often due to parts being worn out, an increase in output will not occur unless new
technology (machinery) is installed. If machinery replacement has not been budgeted
increased efficiency has not been budgeted (planned) either.
Because changes may have to be made in such areas as the degree of
communication between managers and subordinates, MBO will succeed only where
both managers and subordinates feel comfortable with it and are willing to equally
participate. Management must also recognize that in many organizations, workers'
goals are constantly changing. In such situations, it is much more difficult to measure
results accurately.

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