What is managerial effectiveness?

There are no absolute measures of managerial effectiveness. Organizations have aims and objectives, and managers are effective when they help their organization to achieve these aims and objectives. Thus, it is important that every manager (and employee) knows the purpose of their organization, the purpose of their job and the work-specific objectives they must meet.

Key performance indicators

There are various ways of explaining the purpose of a job. The most common term is key performance indicators, or KPIs. Setting KPIs is often an organization-wide process. One version of this process is Management by Objectives. Variations of this are found in all types of organizations, although the process is often no longer referred to as Management by Objectives.

Management by Objectives aims to identify key areas in a person’s work and to set targets against which his or her performance (or effectiveness) may be measured.

Management by Objectives is a simple idea which often proves to be very difficult to apply. Peter Drucker, a well-known writer on management, suggests that effective managers follow the same eight practices. They:

1. ask ‘what needs to be done’
2. ask ‘what is right for the enterprise’
3. develop action plans
4. take responsibility for decisions
5. take responsibility for communicating
6. focus on opportunities
7. run productive meetings
8. think and say ‘we’ rather than ‘I’

(Source: Drucker, 2004)

The first two practices give managers the knowledge they need. The next four help them convert this knowledge into effective action. The last two ensure that the whole team or organization feels responsible and accountable. Most of the practices are applicable at all levels of management.

References

Drucker, Peter F. (2004) ‘What makes a good executive?’, Harvard Business Review, pp. 58–63.

Acknowledgements

Adapted from The Open University’s OpenLearn (http://openlearn.open.ac.uk) material entitled Managing and managing people under a Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Licence. As such, it is also made available under the same licence agreement.