Management uses these objectives to clearly define, for its employees and other management levels, the tasks that have to be performed and the targets that have to be achieved.
These objectives will then be used to measure or to assess the performance of the organisation as a whole, a team of employees or managers, or individual employees or managers.
As a result of this evaluation, the organisation may revise its objectives for the next time period and then draw up a revised strategy for the organisation to follow.
There are a number of advantages or benefits to an organisation of establishing objectives. These include:
- Performance expectations of both managers and employees are clearly stated and defined
- Communication and liaison between managers and employees is made easier by establishing a common set of objectives
- Planning at all levels - strategic, tactical and operational - is made easier and an evaluation of the planning process may be undertaken
- The objectives may be communicated to all stakeholders of the organisations (stakeholders being any individual, group of individuals or organisations which have a 'vested' interest in the successful operation of the organisation, i.e. they stand to lose something if the organisation does not succeed) and thus become part of the culture of the organisation
- A measuring yardstick or standard will be established and the organisation can set itself up as the benchmark for other organisations
- A system of accountability and responsibility is established within the organisation
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