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Impact of management by objectives on organizational productivity.

by Robert Rodgers, John E. Hunter
Journal of Applied Psychology ()

Abstract

Goal setting, participation in decision making, and objective feedback have each been shown to increase productivity As a combination of these three processes, management by objectives (MBO) also should increase productivity. A meta-analysis of studies supported this prediction: 68 out of 70 studies showed productivity gains, and only 2 studies showed losses. The literature on MBO indi- cates that various problems have been encountered with implementing MBO programs. One factor was predicted to be essential to success: the level of top-management commitment to M BO. Proper implementation starts from the top and requires both support and participation from top manage- ment. Results of the meta-analysis showed that when top-management commitment was high, the average gain in productivity was 56%. When commitment was low, the average gain in productivity was only 6%.

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