Hunter, J.E.: Impact of management by objectives on organizational productivity. J. Appl. Psychol. 76(2), 322-336

Journal of Applied Psychology (Impact Factor: 4.31). 03/1991; 76(2):322-336. DOI: 10.1037/0021-9010.76.2.322


Goal setting, participation in decision making, and objective feedback have each been shown to increase productivity. As a combination of these 3 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 indicates 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 MBO. Proper implementation starts from the top and requires both support and participation from top management. 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%. (PsycINFO Database Record (c) 2012 APA, all rights reserved)

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    • "The recommendation to continue to employ budgets is in line with the results of a number of other studies (e.g. Frow et al., 2010; Libby and Lindsay, 2010; Marginson and Ogden, 2005; Rodgers and Hunter, 1991; Storey et al., 1997), which identify positive aspects in the budgeting process. In particular, these studies show that budgets offer a source of structure and mitigate ambiguity. "
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    ABSTRACT: Purpose - Traditional budgets are usually tied to a finite time span, e.g. one year, and are heavily criticized both for hampering efficient resource allocation and also for encouraging dysfunctional budget spending behaviours such as wasteful spend-downs at the end of the budget year and inappropriate holding back of funds early on. The purpose of this article is to investigate whether a greater flexibility in the budget time-structure, which allows for shifting budgetary funds beyond the budget year, does in fact mitigate inefficiencies in budget spending. Design/methodology/approach - A research framework is proposed which draws on critical perspectives developed in prior research and an analytical model put forward by Pollack/Zeckhauser that is adopted as the basis for the development of the hypotheses. In an explorative study, data from an empirical questionnaire survey administered to 219 practitioners, mainly managers, from Austria are then used to substantiate the hypotheses. Findings - Finite-period budgets and fully flexible budgets, which allow subordinates both to save unspent funds beyond the budget year and also to borrow funds from future budgets, cause inefficiencies in budget spending. Subordinates who are allowed to spend and save funds at their discretion without being threatened by the loss of funds or imminent debts spend their budgets most efficiently. Originality/value – The present paper contributes to the management accounting literature by investigating a heavily criticized but rather underexplored area of budgeting and by subjecting theoretical propositions from prior research to explorative empirical testing. Enhanced understanding of the temporal effects of the budget cycle structure will help practitioners improve budget spending and should encourage further research.
    No preview · Article · Nov 2015 · Journal of Accounting & Organizational Change
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    • "Goalsetting theory has developed and become more sophisticated over several decades, and the dominant motivational theory (Fried and Slovik, 2004) is both valid and useful (Tubbs, 1986). A large number of studies have confirmed the relationship between goals and improved results, including research focussed on organizations (Baum et al., 2002), organizational units (Rogers and Hunter, 1991), MBO (Thompson et al., 1981), academic achievements and learning (Harackiewicz et al., 2000; Church et al., 1993) and children's goals and their relationship to achievement behavior (Anderman and Midgley, 2001; Covington, 2000). Covington (2000) argues that teachers can use goals and rewards to direct and change students' learning. "
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    ABSTRACT: Abstract Purpose – This paper seeks to explore how principals use their time when the requirement exceeds the activities are desirable. In the scholarly debate it has been pointed out the heads think that too much time is devoted for the financial and administrative issues, or to solve acute problems. This means that there is not enough time to work with educational issues. The purpose of this paper is to clarify how principals use the time they have devoted for the educational area and what activities they prioritize. It will also increase the knowledge of reasons behind their prioritizing and reflect on some of the consequences. Results relate to the question if introduction of performance measures has increased a short-term perspective on student performance or if it works as a suitable tool for the principals to achieve the schools goals and to create more effective schools in the long run. The question if stakeholders can get required insight by the performance measures as they are designed today and if the principals got the right incentives is raised. Design/methodology/approach – A quantitative approach is used and a mail questionnaire was distributed to the principals in all upper secondary schools in Sweden and a comparative cross-sectional study was conducted. Findings – Principals’ perceptions suggest that, their prioritization when working with educational issues is influenced by a more short-term perspective and that they prioritize teaching, which have a much faster impact on student outcome, over long-term school development which facilitate the conditions for the former. These findings increase the insight into the need, for as well stakeholders as principals, to develop performance measures to stimulate change when needed. Practical implications – These findings have implications on the direction of the development of performance measures. The result points out the lack of transparence for stakeholders and uncovers the need to know when change and long-term development is ongoing or not. The study show how principals need incentives for prioritizing these activities and that this can be done by the stakeholder by designing required measurements for as well teaching as long-term school development when change is needed or to maintain a successful process. Originality/value – This paper fulfills an identified need to study how the performance measures of today can be complemented with measures for stakeholders for increased insight in ongoing activities with development and required change for long-term school success.
    Full-text · Article · Jul 2014 · Journal of Organizational Change Management
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    • "This help employees understand how it all fits together with the objectives and revise their goals (Robbins et al, 2012). Particular importance for increasing productivity is the method of Management by Objectives (MbO), which requires executives to have measurable goals for the employees and to evaluate them at regular time intervals (Rodgers and Hunter, 1991). "
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    ABSTRACT: In the recent years -due to the economic crisis -the stereotype claiming that Greek employees do not work much has been discredited; in fact, according to several studies, Greek employees work harder than their European peers. Statistically speaking they work on an average of 42 hours per week, whereas employees in the Netherlands and in Germany are employed on an average of 31 and 36 hours per week, respectively. One of the reasons for this employment time deviation between the North and South has been reported to be the benefits that the more advanced technology and modern infrastructure bring about. Productivity is expressed as the relationship between the outputs of a production system (both goods and services) and its resources (inputs) that are consumed in producing the outputs. It represents a measure of how well resources, such as labor, machines, materials, energy, capital, etc., are used. It is, however, with caution that the notion of productivity in productive systems need to be considered, since it is not only associated with the human resources efforts, and neither the level of productivity can be regarded as high or low only due to labor's responsibility. Productivity reflects the total and holistic effect of multiple factors, such as the physical capital (machines, buildings), technology, human capital (education and training), work organization, economies of scale, etc., onto the output of a production system. In the present work emphasis is given to productivity and related factors that capture certain aspects in labor management and are associated with economic performance. First, a brief literature review that sheds light into productivity issues and related factors is provided. Next, an appropriate mathematical model that incorporates operational constraints and market requirements is developed to minimize total labor and technology cost, aiming at ensuring an informed decision making process for productivity enhancement, especially in the years of the economic crisis. The study explores further potential initiatives and work flexibility plans, in an attempt to define ways of increasing productivity for the sake of both the company and its human resources. peer-review under responsibility of the 2 nd International Conference on Strategic Innovative Marketing.
    Full-text · Conference Paper · Sep 2013
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