The study was carried out to examine the impact of management by objectives in improving employee performance, using United Bank for Africa as a case study. The researchers adopted the cross-sectional field survey method, using the questionnaire and interview schedule in gathering relevant data from the respondents. The convenience approach was used in arriving at a sample size of 120. The study revealed that UBA adopts MBO and that the principle has significant effect on employee”s performance and productivity, as well as profitability and competitive position of the company. The study recommended that MBO should be made an operational principle in UBA and that there should be periodic evaluation of the effectiveness or otherwise of the principle.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Management By Objectives (MBO) is a management principle under the Human Resource Management (HRM). Human resource management as a disciple is concerned with the application of psychological research and research methods to the problem of human resource utilization in organizational settings, Onuoha, (1998). Druker, (1954) assert that of all the resources of an organization, human resources have been found to be the most valuable, though variable and unpredictable.

In a bid to ensure that employees” performance is rewarded accordingly, organizations adopt the following methods of performance appraisal as listed by Beer, (1985):

?          Essay appraisal

?          Ranking method

?          Person-to-person comparison

?          Grading

?          Graphic rating scale

?          Checklist method

?          Forced choice rating method

?          Behavioural anchored rating

?          Management By Objective (MBO)

Of all these, our major concern is the management by objective principle. This is because authorities in the field of management have agreed that this appraisal method focuses on the result and not the activity, hence, it is known as appraisal by result — Odione, (1965).

Management By Objectives can be defined as a process whereby the superior and the subordinate managers of an organization jointly identify its common goals, define each individual”s major areas of responsibility in terms of the results expected of him and use these measures as guides for operating the unit and assessing the contributions of each of its employees, Unamka et al (1995). On his own, Onuoha, (1995) defines Management By Objectives as a formal, or moderately formal set of procedures that begins with goal setting and continues through performance review. Hence, it is a planning/motivation/control process by which organizational members can work together to establish and achieve mutual goals. It is based on the notion that people are committed to the attainment of goals that they help to establish. Also, it is based on the contention that the future will confront the organization with change, and participants must coordinate their efforts to achieve organizational goals.

Stone, (1982), McGregor (1960) and Herzbery (1968) as quoted in Onuoha (1998) and Unamka (1995), have listed the following stages of Management By Objective process.

STAGE 1:          Top management sets overall corporate objectives of organizations for appropriate action.

STAGE 2:          Each individual (manager) formulates personal goals, within the parameters of the corporate goals, and forwards them to his or her superior.

STAGE 3:          Peer groups meet, compare individual goals and establish group goals. This is to integrate peer group goals, eliminate conflict, reduce duplications and clarify responsibilities.

STAGE 4:          Frequent performance reviews are used to monitor performance, adjust plans and establish an appropriate performance — reward correlation.

The principle and ideology of management by objectives tries to make sure that everybody within the organization has a clear understanding of the aims or objectives of the organization and also be aware of their roles and responsibilities in achieving these aims. The core of (MBO) system is to get management and empower employees action to implement their plans and achieve their objectives, which automatically loads to achievement of those of the organization.

Management By Objectives was first proposed by Druker, (1954). According to him, managers should avoid the activity trap; getting so involved in their day-to-day activities that they forget their main purpose or objective. One of the tenets of this concept is that instead of just a few top — Managers, all Managers of a firm should participate in the strategic planning process in order to improve the implementation of a range of performance system, designed to help the organization stay on the right track.

The Nigerian commercial banking unit of the banking sector has in the recent past increased the number of employees in their banks through expansion as a result of the last recapitalization exercise which served as a boaster to the capital base of the banks. This has therefore increased the need for effective human management and appraisal of performance. This study therefore tries to find out if management by objectives is adopted by the banks in performance appraise and to know how effective the principle has been to the banks, using UBA as a case study.

1.2 STATEMENT OF THE PROBLEM

Quality human resources is very essential to the survival and growth of any organization. An investigation of corporate strategies revealed that Management By Objectives (MBO) is among the most important strategies adopted by organizations to achieve positive results and at the same time motivate the employees. However, in spite of its importance, most banks in Nigeria have failed to continuously develop and adopt the strategy (MBO) and have preferred other methods that do not guarantee effective goal actualization as the Management By Objectives principle. This has led to poor organizational performance, poor goal attainment and weak position of the banks in the industry.

The decision to go into this study was motivated by the discovery of some performance appraisal inefficiencies of United Banks for Africa (UBA) especially as regards educational qualifications. Hence, the study: “The impact of management by objectives in improving employees” performance”.

1.3 OBJECTIVES OF THE STUDY

The major objective of this study is to appraise the impact of management by objectives in improving employees” performance.

Others include:

1.         To determine if UBA PLC employs the tool of Management By Objectives.

2.         To determine the level of understanding of the concept of MBO by the employees and Managers.

3.         To know if the concept has any effect on employees performance.

4.         To determine if effective application of MBO influences banks performance in the industry.

5.         To examine the degree of acceptability of MBO by bank employees.

6.         To determine the major problems associated with (MBO).

7.         To determine the level of application of the concept by UBA.

8.         To make far reaching recommendations as an outcome of the research work.

1.4 RESEARCH QUESTIONS

The following research questions are hereby raised by the researcher:

1.         Does UBA PLC employ the tool of Management By Objectives?

2.         What is the level of understanding of the concept by employees and Managers of the bank?

3.         What level of effect has MBO on employees” performance?

4.         Does effective application of MBO influence banks performance in the industry?

5.         What is the degree of acceptability of MBO by employees of UBA PLC?

6.         What major problems are associated with MBO?

1.5 RESEARCH HYPOTHESES

The following hypotheses would be tested in this study.

1.         H1:       Management By Objective has no significant effect on the performance of UBA PLC employees.

H2:       Management By Objective has significant effect on the performance of UBA PLC employees.

2.         H1:       Effective application of MBO does not influence significantly banks” performance in the industry.

H2:       Effective application of MBO does influence significantly the banks” performance in the industry.

3.         H1:       Managers and employees of UBA PLC do not have clear understanding of the principle of MBO.

H2:       Managers and employees of UBA PLC do have clear understanding of the principles of MBO.

1.6 SIGNIFICANCE OF THE STUDY

This study will be beneficial to employees, banks and customers as well as future researchers. To the employees, especially bank employees as efforts would be made to recommend effective ways of appraising the performance of the employees and at the same time the need to adopt management by objectives. The adoption of this will be of benefit to the employees as they will gather more experience for participating in setting the goals they are meant to achieve.

When employees are involved in management decision-making, they are motivated and performance and productivity will improve to the advantage of the banks.

Customers of banks would also benefit from this study as there will be improved employee-customer relationship. Finally, future researches will find this work useful as they would lay hands on it for reference purposes.

1.7 SCOPE AND LIMITATIONS OF THE STUDY

This work covers the impact of Management By Objectives in improving employees performance, using UBA as a case study. The study is limited to the management and staff of UBA branches in Owerri. Also, the study is limited by the number of respondents used, as the researchers could not cover all the staff members of the three branches of the bank as a result of time and financial constraints.

1.8 DEFINITIONS OF TERMS

1.         MANAGEMENT: This is defined as the effective and efficient utilization of human and non-human resources to achieve organizational goals, hence providing goods and services desired by customers; Onuoha, (1998)

2.         MBO: Management By Objectives — This is defined as a process whereby the superior and the subordinate Managers of an organization jointly identify it common goals, define each individuals major areas of responsibility in terms of the results expected o him and use these marketing as guides for operating the units and assessing the contributions of each of its employees, Unamka, (1995).

3.         BANK: A bank is a financial institution, while money and other variable items are kept for safe custody. Agu, (2008).

4.         UBA: United Bank for Africa PLC

5.         ORGANIZATION: This is a combination of people or individual efforts, working together in pursuit of certain common purpose called organization goals. Onuoha, (1998)

6.         EMPLOYEES: These are people employed by owner(s) of an organization