Imagine that you are a manager of a local shoe store with the responsibility for four employees. Outline a detailed plan for how you would implement MBO to increase overall store revenue by 10% by the end of the year.

Question

What will be an ideal response?

Answer 1

The four-step process of MBO is as follows: (1) The manager and employee jointly set objectives for the employee, (2) the manager develops action plans, (3) the manager and employee periodically review the employee's performance, and (4) the manager makes a performance appraisal and rewards the employee according to results.

Answers will vary for the second half of the question, but here is one possibility:

First, I will meet with each of my employees to share the store’s overall goal of increasing revenue by 10% and get their buy-in. Next I will work with each employee to figure out how he or she can increase revenue by at least 10%. I have noticed that Sara is particularly good with children, Mark is good with women, Francine is good with men, and Maria is good with senior citizens. I may ask them to “specialize” in each demographic, and come to me with ideas for how to better serve each group and increase sales. Together we’ll create the action plans. Because this is a new way of doing business, I’ll meet with each employee monthly to review their progress and make adjustments to the plans if necessary. Because I want to motivate everyone to work as a team, I will put an incentive system in place that rewards hard work; each team member who meets his or her goal each month will get one-half a paid personal day.