Objectives for the manager are set in the following stages: 1. Analyse the Manager’s Authority and Responsibility 2. Compare Goals with Managers Job 3. Initial Definition of Objectives 4. Determining the Units of Measure 5. Select Specific Targets 6. Discussion with the Manager.

Stage # 1. Analyse the Manager’s Authority and Responsibility:

After knowing goals for the company, division or department, next step for the boss is to determine basic important func­tional responsibilities of the manager. The boss then writes down the statements describing the function, covering all major areas of the responsibility.

These statements should be limited in numbers and compared with the company goals. Boss must also keep in his mind about the authority vested in the position of the manager.

Stage # 2. Compare Goals with Managers Job:

The boss then compares the goals with the func­tional relationship of the manager, in order to see that any relationship exists between the goals and the functions or not. If some degree of relationship is found to be existing, the boss then write down in simple and direct language the nature of relationship and its importance. This list of statement thus prepared becomes the raw data for initial definition of objectives.

Stage # 3. Initial Definition of Objectives:


At this stage the boss is ready to make preliminary list of objectives for the manager. This list is tentative and forms the background for the discus­sions with the manager to finalise these objectives.

Stage # 4. Determining the Units of Measure:

After having an idea about the tentative list of objectives, boss then decides on the yard stick or units of measure. These units of measure must be selected by thinking of the terms, word of expressions frequently used.

Examples of such units are:

Volume of sale for sales promotion; man weeks for production department for measuring strike period, work period for production, number of customers for increasing sales, rupees for reducing the cost, earning profits; percentage of rejects in products and scrap produced, waste, number of accidents for safety measures etc.

Stage # 5. Select Specific Targets:


The final step in the preliminary analysis of objectives is to decide the specific point of the yard stick which shall be quoted as the degree of achievement expected from the manager. In the example of an objective “Increase overall sales by 20 per cent”, this 20 per cent is the specific target, he selects for this tentative objective.

The boss has to decide the quantum of target the change desired be expressed either in percentage or in units. This is actually answered on the basis of the opinion of the boss, that what degree of achievement is possible and what are the goals within the responsibility and authority and with respect to activities of the company.

This step of selecting the specific target is very crucial one for the boss. In this target, boss reflects that what he wants from the manager? The targets are fixed based on two types of tendencies “hard” and the “soft”. In first case, too high targets are fixed and while in the later too low targets are fixed. Obviously, there are many intermediate points between these two philosophies at which targets can be fixed.

Stage # 6. Discussion with the Manager:

Since the manager is a key man in the successful use of managerial performance objectives, only he can ensure attainment of the objectives set for him. For this purpose, he must understand these objectives, believe in them and through this he increases his contribution to the company.


Before discussions with the manager, the boss must have in mind tentative set of objec­tives. If the use of performance objective is completely new to the managers, the boss must prepare a written explanation of the concept and give it to the manager ahead of time. This also gives him an opportunity to think about any suggestions he may want to put forward.

The main object of the discussion is to arrive at better mutual understanding about the manager’s job and then to set performance objectives. During discussions, boss explains about the concept of performance objectives and then about company or departmental goals. After clarifying the goals and his views about the objective, he can ask the manager about his views.

The discussions must be then centered on these objectives with reference to the goals and the functions of the manager. These discussions are concluded with a joint agreement regarding the areas the objectives should cover. These objectives are decided for a definite period in the fu­ture, preferably 6 months to a year ahead.

Aims for Discussions:


Boss must achieve the following in the discussion with the man­ager:

(i) To finalise the objectives, enable to fulfill the goals.

(ii) To help the manager for better understanding of his responsibilities.

(iii) To show the managers as to how their livelihood is closely related to the success of the company.


(iv) Make the managers understand that they can act independently in their jobs.