Motivation using the “MBO – Management by Objectives” method. "Management by goals and KPIs" What is the correct algorithm for working using the MBO method

Management by Objectives (MBO)- one of the effective management tools that combines the functions of planning, control and motivation of employees.

It involves setting goals for the company as a whole, individual divisions, employees and company projects, monitoring the results obtained and determining the extent of employee motivation.

As a result of developing goals in accordance with the technology of management by goals, a “tree of goals” is formed, which displays the relationship of the goals set from the highest level to lower hierarchical levels.

When setting goals and objectives using management by objectives approaches, developers should use the principle SMART:

S (Specific)- for each of the goals, a clear, clearly formulated result must be described.

M (Measurable)- any of the goals must comply with the principle of measurability (you can only manage what can be measured - specific indicators and standard measurement procedures).

A (Agreed)- all goals must be consistent with each other.

R (Realistic)- realism when choosing a goal, practical achievability of the goal.

T (Time related)- for each goal there are clear deadlines for when it must be achieved.

An example of a “Goal Tree” for an industrial company

For development strategic objectives use the company's mission, consider ways to achieve strategic objectives. This is the level of the entire enterprise. The planning horizon is usually from 3 to 10 years.

Strategic goals can be formed for areas that are strategically important for the enterprise, for example, finance (profit, sales volumes, etc.), marketing (market share, key customers, etc.), personnel, production infrastructure, new products, etc. .P.

The level of tactical planning, and, accordingly, tactical objectives- structural departments and other business units of the company. Their task is to show how tasks aimed at achieving strategic level tasks will be solved at their level. The planning horizon is usually 0.5-3 years.

A level operational objectives, Using management by goals technology, the company concentrates on solving current problems. The planning horizon can be from one week to one year.

The number of goals for each planning level should not be excessive; for example, there can be about five key goals. Of course, each of these goals can have a different “weight” when considering its contribution to the overall result of the company.

Management by objectives is the key to efficiency. BSC, MBO, KPI and others...

The technology of “Management by Objectives” - MBO (Management by objective) was proposed by Peter Drucker in the 50s of the twentieth century. At that time, the West clearly began to understand that Western methods required change and correction. Today, management uses many techniques to evaluate the effectiveness of both companies and individual employees. These are, for example, the balanced scorecard BSC (Balanced Scorecard), management by objectives MBO, business performance management BPM (Business Performance Management), management based on key performance indicators - KPI (Key Performance Indicators). In the Soviet Union in the 60-70s of the 20th century, the concept of program-target planning (PTP) became widespread; the ideas of this concept largely overlap with the ideas of MBO.

Most American companies use MBO ideas in planning and management. This technology is taught in almost all American schools business. And some authors attribute the economic success achieved by America precisely to this approach.

Management by objectives as a management technology

There are many definitions of management by objectives, here are some of them:

The first is a systematic and organized approach that allows management to focus on achieving goals and achieve the best results with the available resources.

The second is the work of management to formulate the goals of the organization, communicate them to employees, provide them with the necessary resources, as well as distribute roles and responsibilities for achieving the goals.

The use of MBO systematizes the management process, increases the performance of the enterprise, and is effective tool to establish and maintain a quality management system at the enterprise, maintaining quality at all levels of the enterprise.

This approach presents high requirements to the staff. How better worker understands the goals set for him and the more accurately the latter correspond to his internal aspirations, the more likely such goals will be achieved

The relationship between strategy and target management

One of the main features of management by objectives is the existence of a hierarchy of goals within the organization. Even P. Drucker, who was the first to formulate the most important principles of MBO, said that every leader in an organization, from the highest to the lowest level, must have clear tasks that provide support for the goals of higher managers.

The development of performance indicators should be carried out in connection with strategic guidelines. On the one hand, by understanding the connection between performance indicators and strategy, employees will be more involved in the organization’s activities. On the other hand, performance indicators should reflect the connection between current activities and the achievement of the organization’s strategic goals.

For strategic planning and measuring the achievement of strategic goals, the System methodology is increasingly used Balanced Scorecards(BSC Balanced Scorecard– from English Balanced System indicators). BSC is management tool, which allows you to formalize strategic planning and goal setting, communicate the company’s strategic goals to staff, and also monitor the achievement of these goals by employees through KPIs.

KPI – (key performance indicators) is translated in the literature in different ways: “ key indicators efficiency", "key performance indicators". “Efficiency” and “effectiveness” are fundamentally different things. The most successful translation is “key performance indicators (KPIs)” (performance).

This technique can be used in the company along with BSC technology. In this situation, MBO will be the mechanism by which goals will be distributed throughout the company's hierarchy and staff involvement in achieving them will be ensured.

In this situation, KPIs are control points in the process of achieving goals, characteristics of the effectiveness or efficiency of an employee’s work and business processes as a whole.

An employee's monthly work plan (MBO matrix) is a list of indicators established in accordance with the areas of responsibility of this position. A weight coefficient is determined for the indicator, reflecting the importance of the indicator for the employee. The sum of the weighting coefficients is equal to 100%. Planned values ​​of indicators are established based on an analysis of trends in previous periods, taking into account the company's development forecasts and the company's plans for the period being assessed.

An example of an MBO matrix for a sales manager:

Personnel assessment and financial reward.

MVO also has many supporters because this method makes it possible to significantly increase the objectivity (as far as possible) of personnel assessment. Objectivity is a relative concept, especially in areas directly related to human activity. From an MBO point of view, valuation is not done based on personal qualities and potential of the employee, and based on an assessment of the results of his activities in advance set parameters and using quantitative techniques. A formalized approach to evaluating performance results allows you to create an algorithm that clearly and accurately determines the size material reward, depending on the results of labor. Moreover, the introduction of quantitative assessment methods and the establishment of direct interdependence with the remuneration system in themselves can bring practical benefits to the organization.

Effects of implementationMBO:

1. Establishment of transparent and understandable rules for determining the result of labor and calculating material remuneration.

2. Distribution of responsibility among employees for achieving the goals of the entire organization, ensuring the involvement of personnel in activities.

3. Increased job satisfaction among staff, improved manager-executive relationships.

4. Performing discipline and the speed of communicating goals and objectives to performers increases.

5. The initiative and independence of employees in solving operational problems increases. A system of incentives is being created for personal professional development and improvement.

6. Conditions are created for professional and career growth employees. Definition of the most effective employees, creates conditions for the formation personnel reserve to fill vacant leadership positions.

7. Increases the efficiency of resource use, identifying and eliminating ineffective business processes.

Management by objectives and other management technologies.

For effective use technology, it is required to put into practice and automate several management technologies: budgeting, CRM, quality management system (ISO 9001), etc.

The introduction of these technologies brings an independent effect; in addition, the collection of data for calculating target indicators is greatly simplified. The use of these technologies makes it possible to collect data for system indicators.

In addition, in order to correctly plan values ​​for indicators, it is necessary to collect statistical information on previous periods of activity. In this case, setting targets will be reasonable and visible not only for managers, but also for employees. Existing system management accounting should allow us to regularly monitor business indicators that interest us.

AutomationMBO

A condition for the effective use of MBO is the automation of the management process by objectives. This will achieve the following results:

• ensuring uniform standards for setting goals and objectives for employees;
• calculation and storage of data on performance indicators (KPI), collection of statistical data for analysis;
• automated data collection from the management accounting system for KPI calculations;
• automatic calculation of the bonus part of wages;
• ensuring that employees are informed using notifications;
• differentiation of access to information based on planned and actual data in accordance with the job hierarchy;
• rapid implementation of a management system by objectives.

The method of management by objectives in an enterprise is an effective organizational system, which can be used in business to improve it economic indicators. At the same time, management by objectives, as management, has many features and nuances that should be taken into account when planning the implementation of a similar method of organizing management and work in the enterprise as a whole. We should also not forget that management by objectives is not always a justified tool and has its own characteristic features, advantages and disadvantages.

Management by objectives - what is it?

The management by objectives method, or MBO (Management by objectives), was formed by one of the leading management theorists, the American Peter Drucker, in the mid-20th century and subsequently developed further as a separate direction in organizational management. In general, management by objectives is a method of organizing work that involves an initial study and determination of the main goals and objectives both for the entire organization as a whole and for each individual employee who is significant in terms of achieving them in a vertical order.

This method involves the formation of a special management model that allows simultaneous resolution of many issues. In particular, management by objectives makes it possible to increase their loyalty to the enterprise, link personnel costs to the efficiency of management economic activity and develop principles for proactive strategic and tactical development of a business entity in the future.

The method of management by objectives in its fundamentals denies proper efficiency with the help of purely administrative and authoritarian settings - job descriptions and rules internal regulations, just as he does not accept the chaotic lack of subordination at work within the framework of humanistic concepts.

In general, considering management by objectives as a method of management within structural unit or the entire organization as a whole, it can be noted that it combines both authoritarian and humanistic features. On the one hand, the main goals are established primarily by the management team, on the other hand, they are established in accordance with the capabilities of the employees themselves and within the framework of their direct area of ​​responsibility, among other things.

Principles of management by objectives in organizational management

Before using management mechanisms by objectives in the management of an organization, you should become familiar with the basic principles on which such a process is based. So, they look like this:

Only if all the above principles are observed, a management by objectives system can demonstrate its effectiveness. At the same time, certain achievements can be achieved by partial use of this system, but not in every case - failure to follow the above requirements even in one aspect can seriously reduce overall quality organization management.

How to correctly determine the goals of the enterprise and employee

Setting goals at the enterprise for subsequent management, in accordance with the basic principles of the system under consideration, should be carried out in accordance with SMART technology (translated from English as smart). Deciphered this technology and the principles used in defining goals as follows:

• S – Specific – specification or specificity. Each goal must be precisely formulated, without using any abstract concepts or ambiguous interpretations.
• M – Measurable – measurability. The goal must be measurable - that is, have some reflection in the form of indicators that can be measured. Only measurable goals can be achievable in principle.
• A – Achievable – achievable. Although specific and measurable, the goal still cannot necessarily be achievable. Achievability implies not only the ability to actually achieve a given goal, but also the absence of automaticity. That is, the need to take any action to achieve it.
• R - Relevant - relevance. This principle involves the coordination of each employee goal with common system management goals and with the goals of the entire enterprise. All goals should ultimately bring closer the achievement of the goals set for the entire organization.
• T – Time-bound – time binding. Each goal must be followed precisely established deadlines its execution.

Based on the principles of SMART technology in goal setting, it is possible to formulate a general standard for describing such tasks facing employees. Each enterprise has the opportunity to use its own forms, but the following option will be optimal for taking it as a basis. So, each specific task must have:

• Name. The employee and manager should easily track the implementation of goals by their name without unnecessary confusion.
• Description. The task description will help both the employee and the manager. It is not necessary to describe the purpose in all details - it is enough that the participants in the process have a full understanding of the relevant purpose.
• Measurement criteria. A goal can be measured not only in the format of achieving it or not achieving it. A specific measurement of its implementation is also allowed - in percentage, units of goods, number of services provided or any other indicators.
• Correlation with fact. Each goal should be based on actual existing indicators and imply their certain improvement.
• The importance of the goal. Since several goals are set for each employee, it is necessary that each task has a certain weight - it is easiest to set it as a percentage of the employee’s labor effort and working time and the importance of the goal for the organization

In this way, effective and simple assignment of tasks to employees can be ensured, as well as clear tools for monitoring the fulfillment of goals and the development of the enterprise in general. An example of a ready-made goal for an employee involved in writing texts might look like this:

“Until July 31, 2018, ensure the writing of 120 articles per month in order to exceed the existing figure of 100 articles per month by 20%.” Or “Reduce the number of documents sent for revision by the editor so that this figure does not exceed 5% until July 31, 2008.”

An example of the goals of his direct supervisor, the editor, might look like this:

"Provide effective management employees, achieving an increase in the total number of articles during the month from 500 to 600 by 07/31/2008.”

Thus, in the above example, you can clearly see how the goals of one employee are consistent with the goals of his direct management, ensuring an overall increase in the efficiency of the department, and, as a result, the entire organization.

How to implement management by objectives in an enterprise

The implementation of a goal-based management system in an enterprise is a complex and quite complex process that can be implemented in two main ways. Namely:

• Primary goal setting is carried out on a top-down basis. In this case, the formation of goals occurs primarily from managers, based on the overall goals of the organization. In this situation, it is logical to initially select the main criteria used in this system, and the goals will be distributed by management, subject to the availability feedback and dialogue with the underlying business process units.
• Goal setting is done from the bottom up. This situation involves the initial setting of goals directly by the performers based on their personal vision of the situation in the enterprise. At the same time, the goals are adjusted and approved by managers. This approach is relevant for the initial implementation of a management system by objectives, since it demonstrates less effectiveness in increasing the economic performance of the organization as a whole, but provides a high level of motivation and immersion in the process among employees.

When implementing a management system by objectives in an enterprise, it should be borne in mind that it must be formed in accordance with some basic rules:

1. First of all, it is necessary to divide employees into categories. The first category includes employees who must set goals for themselves and their subordinates - this, first of all, concerns the direct management of the company. The second category includes workers for whom setting goals is not mandatory, except in situations where their direct manager decides so. Thus, the second category includes personnel who do not actually influence the efficiency of the enterprise as a whole due to the nature of their activities. For example, accounting employees, provided that all their duties are fulfilled, have extremely limited opportunities to improve the efficiency of their activities in general and the operation of the enterprise.
2. Goals must have a strict hierarchy and complete sufficiency. Thus, lower-level goals should ensure the fulfillment of higher-level goals high level when adding them. In this case, the determination of goals should occur in a hierarchical sequence according to the chosen mechanism without violating the basic order.
3. The created cascading tree of goals should be regularly checked to ensure that all tasks comply with the above principles.
4. Employees must have at least one goal, formed by them personally, which will significantly increase their motivation and increase participation in the activities of the enterprise.

Advantages and disadvantages of a management system by objectives

In general, the management system by objectives has a number of both strengths and weaknesses when using it in practice. The advantages of such a system include its following features:

However, this method of organizing work also has problematic aspects. These include the following most common management errors that arise when applying a management system by objectives:

• Using management by objectives without specific goals. Using any labor organization system without understanding the specific purposes of its application and the expected result is a common mistake of managers. Therefore, both management and each individual performer must understand that the main goal of implementing this system is to increase market satisfaction with the services provided or goods sold, and therefore to increase the efficiency of the organization’s economic activities. Otherwise, the use of the MBO system may not bring any benefit, but only become an additional useless burden.
• Inadequacy of established goals. Management in a goal management system primarily strives to achieve their own results, most often without realizing the real capabilities of employees and how they can achieve their goals, which leads to setting simply unattainable goals. At the same time, employees, on the contrary, believe that their superiors are trying to load them to the maximum, therefore the goals they set are often created with a certain “margin” of safety and do not correspond to their real capabilities. This problem can be mitigated only by collectively setting goals, taking into account the opinions of both the employee and management, and searching for compromise solutions that satisfy both parties.
• Detaching the solution of strategic problems. A management system by objectives most often involves an actual shift in the focus of all participants in business processes to solving tactical issues that are relevant in the near future, the implementation of which will allow achieving clearly defined results in the foreseeable future, and not in the future. Accordingly, some goals should be set as global and have a long period of implementation. In addition, even setting short-term goals should imply a clear understanding of their consequences and results in the long term.
• System operation. When developing goals, each link participating in this process strives first of all to achieve the solution of its own tasks, which can reduce the overall efficiency of the organization. Therefore, each of the goals must be consistent both horizontally and vertically. At the same time, it is also possible to set certain mixed, collective goals, which will make it possible to level out the indicated drawback of the management system.

The management by objectives method is focused on the final result of personnel work, measured quantitatively. According to this method, the degree of achievement of the goal previously set for the employee is assessed. As a rule, goals are set by mutual agreement with the subordinate. An example of such a goal: increase gross sales to 380 thousand rubles. by June 20.

Management by objectives assumes that the manager, together with his subordinates, determines common goals, the main areas of responsibility of the subordinate and the immediate results that the subordinate must achieve. The set goals are used in the future as a guideline for determining the effectiveness of work.

Thus, this method is focused not on assessing the subjective characteristics of the employee and his approaches to performing work, which affect the final results, but on assessing the final results of the work of the employee being assessed. The end results can be easily observed and can be easily measured, unlike the rather subjective personality characteristics.

However, management by goals is associated with certain difficulties: goals should not be overestimated or underestimated, which is not always easy to do, especially if they are determined a year in advance.

One of the main problems of this method is that it is not always possible to set a result-oriented goal for an employee. If an employee has not achieved a goal (or has not fully achieved it), then the management by goals method does not say anything about why this happened, but only states a fact.

The tools of formalized personnel assessment and certification systems, in particular the personnel management system by goals, are based on a rationalistic management model, the shortcomings of which, along with obvious advantages, must be taken into account and eliminated to the maximum extent. Significant efforts are required from the company's management and HR specialists to explain the goals of introducing such a system and to create a favorable psychological climate in the organization before its official introduction.

It is also important, in the case of proposed significant staff reductions or other actions perceived negatively by employees, not to carry them out simultaneously with a campaign to discuss the results of certification, and not to emphasize the direct connection of these events.

Another serious problem is the possibility of strengthening the “indicator orientation” as a result of the introduction of a rigid system of planning and performance evaluation. It has been observed that managers make real efforts to achieve only those goals for which they are directly responsible and which are expressed in measurable indicators. The use of a management system by objectives, according to the experience of other, particularly American, organizations, strengthens individual responsibility and motivation, vertical communications (along the superior-subordinate line) and channels of power. In this, along with the positive, there are also negative aspects. In particular, this may be reflected in the deterioration of interaction between the heads of various departments, ignoring those of their responsibilities that do not directly affect the achievement of their goals. Therefore, a personnel management/goals management system will be especially effective within a certain socio-cultural environment that shapes the corresponding value orientations and attitudes.

Another very serious problem is subjectivism grading, which cannot be completely avoided in any grading system, but should be minimized whenever possible.

Personnel decisions based on subjective assessments give rise to a large number of conflicts and many problems in the sphere of interpersonal relationships. Strengthening trust in assessments and improving the moral and psychological climate occur with a better understanding by employees of the criteria for assessing their performance, overcoming the main drawback, which practically nullifies efforts to make assessments subjectivist, as well as with the establishment of more close connection changes in pay and promotion with labor contribution.

The personnel management system by objectives is designed to support the formal process of planning the organization's activities, taking into account the reality of the functioning of enterprises in Russia, with a system of individual responsibility and incentives for managers. This mechanism uses the well-known method of “management by objectives” or simply “management by objectives” (from the English. Management By Objectives - MBO) in combination with the practice of evaluating leading employees financial organizations USA. Management by objectives allows you to maximize the potential of each employee in the organization, put work with personnel on a solid, systematic basis, that is, ultimately contribute to the success of the company.

With the help of a management system by objectives, a company or other organization provides a link personnel work To strategic planning. The end-to-end system of planned and reporting indicators is, by necessity, quite stable. At the same time, the specific operating conditions of the company and its divisions and the tasks they solve are changing very quickly today. MBO makes it possible to quickly respond to changes in the company's operating conditions.

The use of MBO allows the company to closely link its activities different levels management, functional services and performers.

Performance assessment and certification of company employees, as part of the personnel management system by goals, should provide the most objective analysis of the activities of each individual employee of the company (minimum - each manager and specialist of the company) with the establishment of his personal contribution made during the assessment period to the success of the company, a specific analysis strengths and weaknesses of the evaluated employee’s activities. It is equally important to use the capabilities of the MBO procedure in order to help the line manager achieve an increase in the individual performance of the employees subordinate to him and, through this, achieve the main goals of the company.

Performance assessment is carried out in the company on an annual (or semi-annual - at the choice of the company management) basis, certification - once every four years. Assessments and certifications can play a very important role in an enterprise, but only if they are considered not as a formal tool for distributing rewards, but as the most important tool for personnel work in general.

This requires serious preparatory work in the organization to develop the most objective, based on job responsibilities and the rights of employees of evaluation criteria and training managers in the use of evaluations, familiarization (involvement in development) with the basic concepts personnel policy companies.

With the help of assessments and certification, the HR department and company managers can achieve close coordination between individual personnel decisions, in particular on pay and incentives, employee promotion and career planning, including individual selection of professional development programs.

The use of MBO involves the introduction of a certain rigidity into the management system and is a fairly subtle tool, when using which one must comply with all the rules and recommendations for the development of indicators, assessment procedures, discussion of assessment results with an employee, planning subsequent personnel decisions in order to obtain the maximum effect from them implementation and avoid personnel complications or negative reactions from employees.

Particularly careful monitoring is carried out over employees who are newly hired and have received a new assignment. Managers and specialists must undergo certification with each promotion (demotion) in position, as well as 6 months from the date of hiring or transfer to another position. Informal assessment (in personnel services not transferable) for those newly hired into the company and for those transferred from one position to another within the company, it is recommended to carry out it after three months. Careful monitoring over the period of time corresponding to the employee’s entry into position is intended to speed up this process, as well as determine to the employee high standards labor activity and check the correctness of the appointment decision.

I would like to raise the topic of methods of motivation and personnel management. No one will argue that " human resource“is one of the main components of an organization that influences success. How it will be used depends primarily on the management of this resource. One of the methods of managing and motivating personnel is “Management by Objectives” (hereinafter referred to as MBO) or “management by goals” (“management by setting goals”, “management by setting goals”). There are quite a lot of formulations now, since this technique came to the Russian-speaking environment not so long ago (although there are those who see an analogy with the methods of program-target management in the USSR).

Problems

First, a little about the standard problems that are typical for many organizations.

1. The employee lacks any motivation to improve his efficiency own work and the work of the company as a whole. Actually, a fixed salary is not good remedy motivation. If a person, working a little more or a little less, receives the same money, then he will work less. Elements of subjective bonuses (once a quarter/year as assessed by the immediate supervisor) do not work as well as we would like. Penalty systems present in some organizations rather demotivate the employee by asking him to formally satisfy certain criteria. If it is known in advance that the criteria are difficult to achieve, then efficient work the team can be forgotten.
2. The employee’s lack of knowledge of the tasks that he needs to solve. As a rule, this happens in a situation where the goals of the organization itself are not transparent to all employees. If there are problems in top management, this will affect the work of the entire company. Think about whether you know the goals of your company, your department, and your personal ones. For a quarter, for a year. How are they connected? The presence of job descriptions is only a formal part; it describes the general range of responsibilities, but cannot include support for the development of the organization.
3. Inertia towards change. If the goals of the organization change, the average employee may not understand this. Continue moving in the old direction. Continue to move the department forward. Sometimes, this movement is in the completely opposite direction.
4. Closed communications between departments. The organization must work as a single organism. Everyone must perform their own functions and help perform the functions of other departments. Ideally, the system should be self-coordinating at all levels. This will ensure a quick response to problems and effective search for solutions.
5. Difficulty in analyzing the results. If there is a general plan and it is not being implemented, then finding the bottleneck can be difficult. When there is more than one person to blame, there is no one to blame. But this is only one side of the coin. When the plan is being implemented, it is even more difficult to find bottlenecks and improve efficiency.

I won’t say that these problems can be solved all at once and quickly. Generally, people don't like change (especially if everything is going "normal"). And the changes required by MBO will not be painless. At the beginning of this method of motivation, people may be suspicious of it. But this will pass immediately after the first period. Some people may not like it, but everyone will understand the new requirements.

Conditions

There are some conditions for implementing MBO. The first is the desire of senior management to use this method. Secondly, the understanding that results will not appear “today or tomorrow.” Thirdly, it is necessary to understand the objectives and goals of the organization. If this is not feasible, then there is no point in starting. Support must come from above. Employees at other levels will understand the usefulness a little later, but at the first stage they can act as opponents. It is desirable that the entire organization be subject to change. This will give the greatest effect. An organization is an organism, and all organs must work in the same rhythm. If a gradual introduction is planned, then it is better to allocate a part with minimal dependence on units operating in the old regime.

What it is?

“Management by objectives is a systematic and organized approach that allows management to focus on achieving goals and achieve the best results with available resources.” This method is based on the fact that at the beginning of the period (month, quarter), the organization, divisions, departments, and employees are assigned clear tasks on which their bonus depends. Goals and objectives are set according to the SMART principle:

• Specific - specific to the organization/division/employee;
• Measurable - measurable (define metrics for calculating performance);
• Achievable - achievable, realistic;
• Result-oriented - results-oriented, not effort-oriented;
• Time-based - set time requirements for goals.

There should not be many goals at each level. The optimal number is 3-5 main goals. At the end of the period, a calculation is made to what extent the goals have been achieved. And the bonus part depends on this.

Salary and bonus

Salary is one of the components that allows an employee to feel stability. As written above, attempts to reduce it using a system of fines will be perceived negatively. Constant bonuses, determined subjectively, can begin to be perceived as a salary and are not a motivating factor.

The most difficult stage is the change in the policy of paying wages and bonuses. But this is necessary to implement the method. Moreover, the higher the ratio “premium part / wage", the greater the effect you can get. For example, for the sales department, on which the organization’s revenue directly depends, this ratio can actually be 1:1.

How it works

In order not to indulge in theoretical explanations, I will try to explain with an example. Let there be a certain company that produces software. This is not the first version of the product being produced and sold; a certain niche in the market has been occupied. Company structure: general director, departments (heads of departments), employees. The following plans were agreed with investors for the first quarter of 2004. Increase in market share by 5%. Budget - $500,000. Gross revenue - $1,000,000.

In accordance with this plan, the director sets the following goals.

Each goal is assigned a weight and criterion. If the company's expenses are $500,000, then this goal will be achieved 100%. If $600,000 - by 80%. If for $400,000 - by 120%.

In addition to the fact that this table contains the company's goals, it is personal for general director. His personal bonuses will depend on achieving these goals.

For the development department software(together with the heads of all departments) the following goals were identified.

As we can see, the number of tasks for the department has increased, and specific ones have appeared. The weight was set according to priorities ( a new version in the middle of the quarter will help achieve overall goals). A link to the marketing department has appeared - to achieve this goal, you need to obtain additional information. Accordingly, the marketing department should also have a goal - to collect this information by a certain date.

Similar to goals for the company, these goals are personal for the head of the department. Based on these goals, he sets goals for department employees. Let's assume that in the software development department there is an employee P.P. Petrov. and the following goals were set for him. Again, specific goals for a given person. I’ll touch on a little bit about the “Required support” column. It means that someone will provide the material to accomplish a given goal by a certain date. If the date of provision was missed, then this should not affect the result of this employee. As I said, the bonus part depends on the achievement of set goals. The goals are known in advance, and everyone will strive to achieve them. But for better interaction, it is not enough for the bonus to depend directly on personal goals. To do this, dependence on higher-level goals is introduced.

Dependence of bonus on goals

That is, an employee’s bonus depends 60% on personal goals + 30% on department goals + 10% on company goals. The results for the quarter were as follows.

• Company goals
• Department Goals
• Employee goals

Then the bonus percentage will be:

Analysis

Based on the results of each reporting period, it is necessary to conduct an analysis. One of the parameters is screening based on the minimum level of fulfillment of individual goals. For example, why does an organization need an employee who achieves his or her goals by less than 50%? Of course, you should not lay off employees after the first period. It may be necessary to change the weight of the goal if the result is achieved (for example, employees will quickly get used to daily reporting). Perhaps some shortcomings in communications will be revealed and new local goals will appear.

Conclusion

Let's go through the problems that were described at the beginning.

1. "Poor staff motivation." Employees will be focused on the results required by the company. And they will try to achieve and exceed it.
2. “Ignorance of goals and objectives.” Goals are set clearly at the very beginning of work. General tasks and personal responsibilities are known.
3. "Inertia to change." When the company's goals change (of course, not in the middle of the period), the tasks of each department and each employee change accordingly.
4. "Closed departments." Now everyone is tied to a common task and it is clear on whom the implementation of this part depends and how this will affect the result.
5. "Complexity of analysis." All goals are based on the SMART principle and the analysis is quite simple.

Of course, everything won't be so perfect right away. Some tasks will be missed in the first periods. But everyone will be results-oriented and motivated to report problems in a timely manner.

Vadim Nareiko