Encourages improvements in productivity and quality of employees by establishing and monitoring the contract of goals adding financial value to the differentiated efforts .
There is no utility in linking pay to performance if your company does not measure or are not willing to pay significantly more for a superior performance.
Performance measures that your Company will use depend on the organization and its goals. Can be based on financial performance, productivity, improved quality, aggregate economic value, customer service / distributor, volume, market share, average price among others.
Many organizations are of the opinion that match these criteria is the most appropriate. The measurement criteria must be understood by employees participating in the program. End result: The performance cannot be measured accurately and the program will not work (or will not be fully effective) if employees do not understand how they are being evaluated or if they cannot understand the relationship between their efforts and the desired results.
The Management of Objectives enjoys great popularity.Experts as Human Resources Directors and Managers, respond enthusiastically and emphasis that this system puts on results the responsibility of subordinates by the scope and not only by personal qualities.
Indeed Management of Objectives proved to be a useful vehicle to increase the quantity and quality of communication between Directors/ Managers and their subordinates with respect to responsibilities, objectives, plans and results.
Thus we believe that all by Objectives Management programs should include the establishment of challenging targets, but realistic.