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The Impact Of Management By Objective On The Performance Of An Employee (A Case Study Of Lopa Energy)

Abstract of Impact Of Management By Objective On The Performance Of An Employee

One of the many problem facing the business community has been the problem of integrating the objectives of the employees with that of the organization for the achievement of the organization objectives. Even when such an integration has been made there should be a dear method or system of measurement of the contribution of employees to the organizational achievement. Organization that practice management by objectives seem to be on the positive threshold of solving this problem. Management by objective (MBO) is a systematic approach to managing an organization practicing the basic management functions of planning organization staffing leading and controlling. Management by objective is a result oriented all functional area (LOPA energy the distinguishing characteristic of management by objective (MBO) is its emphasis on results achievement of objective. It is based on a concept of human motivation. Accordingly it places emphases on the involvement of the employee in planning directing and controlling aspects of the job what will be done when will it be dome and how will it be done?

Chapter one of Impact Of Management By Objective On The Performance Of An Employee


The underlying belief is that this involvement of employee lead to commitment and if an employee is committed he can be directed to perform in manner that positively contributes to the achievement of organizational objects.  The MBO afford both the superiors and subordinates the opportunity to sit together and jointly identify common goals of enterprise define individual major  areas of responsibility term of the results expected of him and use these measures as guides for operating the unit and assessing the contribution of each of it misers. Paul Hersey et al (1988) this leads to the four basic component of the MBO system.

a)           Setting performance objectives and standards for their accomplishment

b)           Developing action plans

c)           Coaching and counseling

d)           Annual performance appraisal

Management by objective should guard against misdirection of common organizational goal by various functional managers.  Peter Durker (1981).  The in depth in the assumption is that organization that is well vested and excellence among its managers.  By jointly setting objectives between and the subordinate a mutual understanding results. Employee now accept the responsibility and   works out action. Plan to meet performance standard set for the specific job.  MBO has psychological background.  In order to understand and benefit from MBO all employees who are includes in it must understand the psychological principles on which it is based.  When MBO is introduced into a company a training course is therefore given which explains Maslow’s  hierarchy of needs Hertzberg’s theory of motivational emphasize and Mc Gregor’s theory X and Y these emphasize the employees increase in job satisfaction when he feels a sense of achievement & involvement in his work.  Unless MBO is carried out in this spirit it because merely another method by which subordinates can be controlled.  Graham (1985)

For a business to grow responsibility is the only thing that will serve.  Druker (1981).

Acceptance of responsibility removes fear and spur up employees with an internal self motivation for performance.  When employee are motivated productivity increases.

Through management by objectives (MBO) responsible worker emerge there is the contention that (MBO) brought employee satisfaction.  Nwachukwu (1988).  Employees contribution is recognized and rewarded through job performance appraisal  system which is an ingredient of management by objective (MBO)

One of the major problem contorting the Niger civil service are intangible 50 are their result that is to serve the people.  This sound ambiguous and cannot easily be subjected to any quantitative and qualitative education. To determine when a civil service has become result oriented entails having specific limited dearly defined target to be accomplished within a given time Nwachukwu (1988).

Management by objective enable prudent utilization of  resources setting of prionties and time as Druker (1977) puts it only its target and defined can resource be allocated to their attainment priorties and dragline be set and somebody be held accountable for result”

Employees can be denominated  if an employees perceives that his contribution has not been equitable compensated rewarded or recognized.

Coaching and counseling are used to guide subordinates to be on the objective track.

In summary management by objective in the recent    years has been one of the most striking developments in the  managerial cut of getting result  in an organization.  Significant number of firms small enterprise to giant public corporation report  accomplishment of a most astonishing and profitable nature.  When MBO is correctly applied it enhance work simplification equitable compensation better utilization of equipment starting a new business inventory control and organization clarity (Mali 1972)

It is clear from the vast body of information and knowledge developing around (MBO) concept a dynamic management  way  of life is steadily maturing and will remain with as for sometime to come.  This is informed by the fact that management practitioners themselves are increasingly concerned with improving ther own effectiveness with the use of management by objective (  MBO).  The researcher work will examine the impact MBO on the performance of the  company LOPA Enugu Co.

Being a theoretically oriented  research work theories by eminent scholars as they affect the research topic will be discussed.  The objectives scope and innovative material offered in this researcher paper should be of help to any manager at any organizational level who is interested in increasing the results and quality of output of his group or organization.

Additionally the paper would provide meaning techniques increase their individual resulted in the context of their job responsibilities.  In only management employee are includes in the MBO system that is employees who are only salary group 10 and above even those without experience or the fresh recruits.

Conversely employees on salary group mine or below are excluded form MBO system irrespective of the many years of experience that have had on the job.  These level of employees performed what the company referred to as “assigned tasks”.  This study examined management staff of the company could make to the MBO system to facilitate accomplishment of the  company’s goal and objectives.


LOPA energy company was co-operated and the year 1985 under the company’s allied matter act of 1965 amended in 1990 and registered the company’s name as LOPA energy Co Ltd ammonia processing plant.

The company got its registered number which is 176062 in 58 Awka Road Onitsha under the memorandum of association to design commission operate and supply all kinds of petroleum plant which includes liquidity petroleum gas (LPG) and also to set up and market all kind of chemicals petro chemical plants organic and inorganic.

The company is floated by chief Bony Alo and engineer Ansalem Alo on behalf of their other brother LOPA is located at Emene Enugu East.

The company has branch and gas plant at Abakiliki  for the bottling of liquidity and gas plant  petroleum gas (LPG) and ammonia factory and gas plant at Enugu. Soon after the completion of the company LOPA energy has a setback.  The national fertilizer company of Nigeria (NAFCON) entered into an agreement with LOPA energy and offered the company and excusive leadership of her bye-product but (NAFCON) later reneged from that co-actual agreement.  So the company become a still birth out of the wood and the problem were sowed until 1993.  NAFCON was compelled by federal government of Nigeria (FGN) to supply the product to LOPA energy Co-Ltd and to respect with the company is agreement. Since then LOPA energy went into active business as a result of this LOPA constructed an ammonia bending plant for bending of anhydrous ammonia and the chemical name is NHZ.

So business blossomed on like a flower and in expansion of business LOPA energy increased in the production of LPG and this LPG is the cooking gas and brings to future dream.  Now LOPA Enugu Co Ltd is the only company that is supplying liquidity petroleum gas (LPG)


Whether a business enterprise deliver a product or service depending on the work of the number of people whose effort must be marshaled and directed toward  the a ultimate objective.  The organizing of  drilling and producing on the other hand and directing and motivating of employees on the other hand are two of most important of the many essential activities of LOPA energy management.

No enterprises has  achieved significant economic and social development  with our clearly set objectives and stipulated performance standard. This main problem addressed by this research was the relationship between management by objective (MBO) and its significance impact on employee performance at LOPA energy productivity  is affected up front because of procurement of raw material the refinery which product liquidity because the product is not regular even the processing of raw material (NAFCON) The national fertilizer company of Nigeria closed down so they import the material up till now.

In from of sales company that patronizes LOPA energy has reduced as a result of importing of raw material.  The product will be very costly because of the raw material is very made and used for the production the cost of the product will be high.  Some of the company has closed down because of the expensive of the product (the any hydrous) which is used in some breweries for production of malt and for cooling.  Productivity is affected when stimulating challenging and    vigorous objective and performance standards are established and the performance adequately rewarded a measure of  reinforcement


This study aimed at achieving the following objectives or purpose:

1)           To  find out wither management by objective practiced in LOPA Enugu improve the overall performance of the company

2)           To find out the extent of management involvement in MBO as a tool for effective performance at LOPA Enugu

3)           To find out how management by objective (MBO) could applied at LOPA energy Co. Ltd to motivate the employee to work better.


Research questions are question posed by the researcher answer to which would lead to the solution of the problem

The research question are as follows

1)           Does management by objective (MBO) improve or enhance the overall performance of the company?

2)           To what extent does management involvement in MBO as a tool for effectives performance  at LOPA energy?

3)           How does management by objective (MBO) applied at LOPA energy Co Ltd motivate the employees to work better.


The hypothesis for the research work is formulated after thorough and careful   review of work that are directly or indirectly related to the subject matter.

The hypothesis for this research work are as follows

H0:   Management by objective (MBO) does not improve the overall

performance of the company

H1:   Management by objective (MBO)  improve the overall performance of t      he company

H0:   Management involvement in MBO does not work as a tool for effective performance at LOPA Enugu

H1:   Management involvement in MBO  work as a tool for effective performance at LOPA Enugu

H0:   Management by objective (MBO) applied at LOPA energy does not motivate the employees to work better

H1:   Management by objective (MBO) applied at LOPA energy motivate the employees to work better


Management of LOPA energy in particular and other enterprise is Nigeria generally would find the result of this research very rewarding and variable when applying management by objective (MBO).

From this result they would know the particular problem jeopardizing the correct application of management by  objective (MBO) and thereby take remedial action.

Consequently, the acceptance of this study and adoption of the researcher’s recommendation could assist management of LOPA energy other organization and public sectors in making sound and strategic decision to improve employee performance and productivity through careful result measurement appraisal rating and commensurate reward system.


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