Essentials of Planning and Managing by Objectives

Examples of nonverifiable and verifiable objectivesNonverifiable objective1. To make a reasonable profit2. To improve communication3. To improve productivity ofthe production department4. To develop better managers5. To install a computer systemVerifiable objective1. To achieve a return on investment of 12% at the end of the current fiscal year2. To issue a two-page monthly newsletter beginning July 1, 2005, involving notmore than 40 working hours of preparation time (after the first issue)3. To increase production output by 5% by December 31, 2005, withoutadditional costs while maintaining the current quality level4. To design and conduct a 40-hour in-house program on the "fundamentals ofmanagement," to be completed by October 1, 2005, involving not more than 200working hours of the management development staff and with at least 90% ofthe 100 managers passing the exam (specified)5. To install a computerized control system in the production department byDecember 31, 2005, requiring not more than 500 working hours of systemsanalysis and operating with not more than 10% downtime during the first threemonths or 2% thereaftermaking a reasonable profit (see Table 4-1) does not state how much profit isto be made, and what is reasonable to the subordinate may not be at allacceptable to the superior. In the case of such a disagreement, it is ofcourse the subordinate who loses the argument. In contrast, a return oninvestment of 12 percent at the end of the current fiscal year can bemeasured; it answers these questions: how much or what? when?At times, stating results in verifiable terms is more difficult. This isespecially true when it involves the objectives for staff personnel and ingovernment. For example, installing a computer system is an importanttask, but "to install a computer system" is not a verifiable goal. However,suppose the objective is "to install a computerized control system (withcertain specifications) in the production department by December 31, 2005,with an expenditure of not more than 500 working hours." Then, goalaccomplishment can be measured. Moreover, quality can also be specified interms of computer downtime, such as "the system shall be operational 90percent of the time during the first two months of operation."Guidelines for setting objectivesSetting objectives is indeed a difficult task. It requires intelligent coaching bythe superior and extensive practice by the subordinate. The guidelinesshown in Table 4-1 will help managers in setting their objectives.The list of objectives should not be too long, yet it should cover themain features of the job. As this chapter has emphasized, objectives shouldbe verifiable and should state what is to be accomplished and when. Ifpossible, the quality desired and the projected cost of achieving theobjectives should be indicated. Furthermore, objectives should present achallenge, indicate priorities, and promote personal and professionalgrowth and development. These and other criteria for good objectives arebe summarized in Table 4-1. Testing objectives against the criteriashown in the checklist is a good exercise for managers and aspiringmanagers.