Employees collaborate with the management to establish a list of tasks that they are to carry out to assist the company in accomplishing its overall objectives within a particular time. The aim is to give an overview of their tasks and how they connect to their overall objectives. This helps sales representatives understand the expectation they are to meet and why there can be room to improve their productivity.
Think of it this way: a computer software business will reduce its sales cycle towards the end of the year. An MBO model would imply that managers collaborate with their sales reps to set forth their goals in the calendar year to assist the firm in accomplishing its intended cycle. This could lead to team members focussing more on being more efficient with their consumers and establishing quarterly targets to be achieved.
MBO Model Benefits
The ultimate advantage of applying an MBO model is that employees can understand the worth of their contribution in terms of business performance. Ideally, sales representatives that are involved in setting their own objectives are encouraged by this process and have enhanced productivity and ethics in the workplace.
In addition, the MBO model increases openness between staff and senior management, as higher business goals have to be made apparent to everyone. It also increases transparency between managers and their direct staff since managers must meet their expectations early, and the team must be fair about what they think can be achieved.
In general, the focus of MBO’s goals is on awards instead of penalties because employees can identify their course of action and implement methods they know can achieve.
How to Create Your Own MBO Model
Managers that run a sales model for MBOs might take the next step by step.
Set organizational goals with your sales team
The first step in creating a successful MBO model is to set your team members’ organizational objectives.
Make sure employees are aware of what the organization aims to do and the timeframe to achieve those goals. Let’s say the objective of a firm is to raise its sales by 30% by the end of the calendar year. While this objective provides a specific timeframe, senior management might take additional workable actions to guarantee this occurs. They may aim to raise revenue by 8% every quarter or may want to boost their revenues by 5% throughout the first three quarters of the year, with the last sprint up to 12% in the fourth quarter. All these plans and estimations should be communicated with the sales team.
Define sales objectives for all team members
The next stage is to engage with every employee to define their work duties while defining corporate goals with all the team members using SMART goal structure (Specific, Measurable, Attainable, Relevant, and Time-bound) to help with this process. Once you define your goals, employees will have a clear understanding of what is expected of them.
If the end goal is to raise revenues by 30%, this income should immediately enhance the employee goal to use the example above. It may seem like sales reps are planning to win 12% more deals per quarter.
When the team meets its goals, you can begin discussing with them various benefits and rewards that your organization can offer. Since these topics are also discussed collectively with the team, employees may be more motivated to constructively obtain these bonuses.
Monitor employee development and progress
The collaborations and discussions between managers and employees are a foundation of the MBO concept. This implies that you continue to inspect your staff for the entire time frame you have set together.
Monitor their development continually and help them along the road when their success is affected. If workers slip off the paved path, you can assist them in getting back on track through different nudges and engagement techniques. You can also set up check-in schedules while establishing employee objectives.
Reward and acknowledge employees for their results
Get a sense of efficiency in your team while monitoring your team’s performance. You should have access to the completion of these timeframes as an opportunity to review performance if you have schedule employees to achieve their goals.
The bonuses, rewards, and other benefits agreed upon in the second step for employees who achieve their set goals should be delivered. The MBO concept is not about giving a penalty. Thus, you may provide employees with employee development materials to assist them in achieving their goals in the future.
Use technology to your advantage
While your employee development is already being reviewed, these check-ins will probably not happen every day. During hands-off periods consider using technology to get a sense of employee performance.
For example, Skilo’s performance management solution can support you with easy goal setting and progress monitoring. Skilo HR solution is also a valuable tool for managers to see how employees progress toward their goals outside of check-in periods.
MBO emphasizes employee development and growth
In summary, MBO enables organizations with employee empowerment to achieve their goals. Managers and their respective teams take the time to understand company goals and work together to develop job roles and timeframes for action.
Employees who meet their objectives are acknowledged and should know how their achievements affect overall company success.
How can you help the manager and your team to boost performance management in practice? Contact us and try Skilo – a performance and employee management app.
Skilo is a Salesforce native app that provides a ready-to-use talent management solution. It streamlines, simplifies, and unifies the end-to-end process of talent acquisition, development, and retention. Skilo also provides performance management, competency frameworks, along with skills development, career planning, training management, feedback, reviews, and social employee engagement. For more information, please visit www.skilohr.com, Skilo LinkedIn profile, and Skilo Facebook page.