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Proceeding Paper

Management by Objectives (MBO) in the Greek Local Government: An Empirical Study on the Municipalities of the Central Macedonia Region (Part I) †

by
Maria Liozidou
1,* and
Amalia Stafyla
2
1
Directory of Administrative Services, Municipality of Nea Propontida, 63200 Nea Moudania, Greece
2
Department of Supply Chain Management, International Hellenic University, 60100 Katerini, Greece
*
Author to whom correspondence should be addressed.
†
Presented at the 1st International Conference on Public Administration 2024, Katerini, Greece, 31 May–1 June 2024.
Proceedings 2024, 111(1), 17; https://doi.org/10.3390/proceedings2024111017
Published: 31 March 2025
Versions Notes

Abstract

:
This article presents the first part of an empirical study on the implementation of Management by Objectives (MBO) in Greek local governance. Focusing on the 38 municipalities of the Region of Central Macedonia, the study investigated the degree of MBO implementation, its main characteristics, and its specific features. This research is considered original in its scope and type. Data were collected via an online questionnaire with closed-ended questions from a sample of 222 participants, primarily municipal employees. Results indicate that only 3.6% of the municipalities fully implement MBO, while 29.3% implement it partially or use an alternative process. Beyond identifying the necessary conditions and initiatives for successful MBO implementation, the research also explores MBO’s contributions and key obstacles hindering its full implementation in Greek local governance.

1. Introduction

Management by Objectives (MBO) emerged as a systematic management approach around the mid-20th century, primarily by Peter Drucker. In his seminal work, The Practice of Management [1], Drucker defined MBO as “a management system that integrates the characteristics of three processes known to be good management practice in government: participation in decision-making, setting of objectives, and objective feedback” [2] (p. 27). MBO was initially conceived and applied in the private sector. However, efforts to implement it in the public sector have spanned several decades. The dissemination of MBO in the public sector is primarily attributed to its connection with the New Public Management (NPM), which promoted the spread of the new management method known as performance management and measurement [3] (p. 145). MBO has been a prominent tool of NPM since its early adoption, challenging the foundational values of traditional public administration [4] (p. 7). During the 1970s and 1980s, numerous scholars advocated MBO as a valuable tool for management and performance enhancement [5,6,7], supported by analyses documenting its growing adoption in the public sector [8,9,10,11,12]. Conversely, there were research efforts, mainly case studies conducted in the United States, suggesting that MBO had better application and therefore constituted a better method for the private sector than for the public [2,13,14,15,16]. The 1990s saw a critical reassessment of MBO’s suitability for the public sector. While some scholars, like Drucker [17], Rombach [3] (p. 167), and Gray and Jenkins [18], highlighted implementation limitations, others continued to view MBO as a promising management method [19]. The 21st-century research [20,21,22] supports MBO’s application in the public sector [3], particularly in employee performance evaluation [23,24,25,26,27].
Concurrently, a substantial body of literature debates the merits of MBO implementation in local governance. The following literature review demonstrates that MBO has been successfully implemented in countries across Northern Europe, Scandinavia, and the Anglo-Saxon world. Concerning Greece, the introduction of Management by Objectives as a tool of the NPM for the improvement of the work performance in the public sector can be initially traced in the 1990s within the framework of reforms aimed at modernizing public administration. However, minimal progress has been made ever since. Regarding local government, the results are quite disappointing. This is also evidenced by the following analysis concerning the main research efforts regarding the implementation of MBO in Greek local government.
This article aims to contribute to the inquiry concerning implementing the principles and reforms introduced by NPM in Greek public administration, particularly in local government, to address chronic pathologies and thus promote effective modernization. The following text presents the first part (Part I) of the results of the empirical research on the implementation of MBO as a modern management tool and method of evaluating work performance in the Greek local government (municipalities). This research possesses elements of originality by virtue of its scope and methodology, constituting the first empirical investigation of the attitudes and opinions of employees and elected officials within all 38 municipalities of the Central Macedonia Region (the second largest region in Greece). In addition to determining the level of MBO implementation, the study examines its characteristic features, essential preconditions, and principal impediments to successful implementation for the purpose of subsequent evaluation and utilization. Moreover, it is worth noting that the timeframe of the research (13 January 2022 to 21 April 2022) is positioned just before the closing of the official and long-standing institutional framework of MBO in the Greek public sector (Laws 3230/2004 and 4369/2016). The findings of this study could significantly contribute to future comparative research examining the impact of the newly established institutional framework for Management by Objectives (MBO) in Greek public administration and local government, as outlined in Law 4940/2022 [28].

2. Management by Objectives in Local Government: A Brief Review of the Main Literature

The academic discussion and research interest regarding the implementation of MBO in local governance has grown since the 1980s. During this period, we notice that MBO is being broadly used as an administrative tool for implementing NPM. Nevertheless, significant differences in its application, by various local administrations, are also noted [9]. In the 1990s, the research focused mainly on identifying the specific characteristics and challenges of local governance regarding the implementation of MBO, such as the goal-setting process [29,30], the need to change the organizational culture to one of “evaluation and learning,” and ensuring the integration of the capacity for evaluative processes into the “normal” routines and “ways of thinking and working” of the public administration [30] (p. 310). Additionally, several successful case studies have been conducted, concerning mainly countries with relevant experience, such as the Scandinavian countries and the United Kingdom [31,32,33,34]. Key variables for the success of these case studies included participation, commitment, and coordinated action of a critical group of individuals consisting of departmental directors/managers and political executives of the administration for the formulation of an “Action Plan” aimed at performance improvement [34]. Within the same framework, the creation and nurturing of a “team spirit” among all involved parties were highlighted as a crucial element [35] (pp. 35–38). Furthermore, the connection between MBO and employee productivity was explored, and a proportional correlation was found [32]. It was revealed that employee productivity increases when they participate in management systems, develop a sense of “self-efficacy” (regarding their contribution to the increase in their employing organization’s productivity), receive appropriate training, and are dedicated to the goals set by MBO [32] (pp. 289–299).
Pollitt [36] concluded that the implementation of Management by Objectives (MBO) at the local level “is more likely to achieve its objectives when used in activities of “low” or “moderate” public character, rather than when used for the reform of a project of high public character, such as social policy exercised by local authorities” [36] (p. 50). Poister and Streib [9], on the other hand, linked MBO to the implementation of strategic planning in large municipalities and concluded that, although strategic planning was gaining some recognition, integrated strategic management was still in its early stages of implementation in a few pioneering municipalities [9] (p. 44). Special mention was made of the role of managers who appear “enthusiastic about their experiences in strategic planning…[and]…largely satisfied with the achievement of their goals” [9] (p. 45).
Almost two decades later, Holliman and Buchar [37] examined the relevance of the MBO model with other management models and found that the overall respondents considered MBO rather useful (M = 4.56), while those who applied MBO, in practice, considered it marginally useful (M = 4.06). In general, the data argue that MBO should be considered an effective tool for strengthening management control [37].
Wiemann, Meidert, and Weibel [38], as part of their research on the impact of performance evaluation of employees, reinforced the argument that MBO is one of the effective tools of NPM for performance evaluation, which are “participatory, adaptive, learning-oriented, and transparent, and thus allow fair collaboration among organization members” [38] (p. 1) and have a positive impact on trust in the employer. On the contrary, they noted that performance appraisals of employees designed using Systematic Performance Appraisal (SPA) negatively affect employee trust. They argued that their findings support the claim of Aguinis, Joo, and Gottfredson [39] about the existence of “good” and “bad” designs of performance evaluation systems, emphasizing the importance of those performance evaluation systems that allow “participatory goal setting and continuous feedback from the supervisor (i.e., MBO) that enhances cooperative behavior among employees and the perception that they are working for a reliable employer—a very important factor for the organization’s performance” [39] (p. 21).

3. Management by Objectives in Greek Local Governance: A Brief Review of the Previous Research Attempts

Our effort to detect previous research attempts on the implementation of MBO in Greek local government was particularly difficult and disappointing, as minimal research interest was found. Consequently, we identified only three recent studies relevant to our own research objectives.
The study by T.H. Kappas [40] provides useful insights into the characteristics of objectives/goals set within the framework of implementing MBO, as a tool of NPM, in the largest municipality in Greece. The target population for this study consisted of 1000 administrative employees of the Municipality of Athens. Data collection was performed using both interviews and questionnaires. According to the questionnaire structure, there were eleven questions directly or indirectly related to the goal-setting process (questions 3, 5, and 14–22). According to the research results, participants believed that clear goal setting significantly contributes to the efficiency of employees and executives of the municipality (p. 324). However, they considered that the goals were neither clearly defined nor clearly separated into short-term and long-term ones by the supervisors/heads of the municipal services (p. 337). This resulted “in hindering the improvement of both the efficiency of the administrative work of the heads of services and the administrative control by the respective competent administrative and elected members of the municipal institutional bodies” (pp. 530–531). They also argued that the set goals had the following characteristics: quite feasible (p. 343), reviewed with satisfactory frequency (p. 342), without following a strict timetable (p. 341), and connected with the strategic planning of the municipality and the budget of the municipality (pp. 337, 340, 351). The response time to citizens’ requests emerged as the predominant performance measurement indicator (p. 319).
The research conducted by T. Andriani [41] aimed to investigate the feasibility and effectiveness of MBO as a method of NPM in Greek local government. In this context, a qualitative study was conducted with a convenience sample consisting of six semi-structured interviews with four executives (unit heads both with and without experience in implementing MBO in their services) of the Region of Central Macedonia (RCM) and two from municipalities that did not implement MBO at all. Archival research was also conducted at the General Directorate of Development of RCM. According to the research findings, participants emphasized that: MBO had a “fragmented” and “pilot” nature, was a top-down imposed process, and was questioned as to its appropriate and substantial implementation (p. 112). Additionally, the participants argued that implementing MBO could add value to their work (pp. 110–111). However, they considered as necessary prerequisites for the implementation of MBO, the following: the existence of strong political will and support in such methods, the cultivation and establishment of an organizational culture oriented towards providing higher quality, more efficient services and meritocracy, securing resources, stability of organizations, solving red tape and inefficiency, as well as a stronger political presence of elected officials in municipalities (p. 110). The most significant problems/obstacles in the implementation of MBO were the lack of personnel, heavy red tape for MBO implementation, problems in organizing the whole project, lack of knowledge for its implementation, impulsive resistance to change, and the reaction to investigating employee job satisfaction (p. 112). In addition, while participants acknowledged the possibility of mandatory MBO implementation, they remained skeptical about its potential for achieving substantial, rather than superficial, results. Participants perceived the potential adoption of Management by Objectives (MBO) within local government as a unidirectional process, highlighting the necessity to eradicate political “sympathies” and foster objectivity and meritocracy (p. 112) to guarantee the substantive, rather than superficial, implementation of MBO.
Finally, Papalazarou and Tsoulfas [42] conducted a research regarding the implementation of MBO in the Greek public administration, which was carried out through interviews and questionnaires with a small sample of senior executives and employees of the Greek public sector, including those working in local government agencies with experience in implementing the tools of the Common Assessment Framework (CAF 2013) and MBO (based on Law 3230/2004). Regarding the positive results of implementing MBO in municipalities and regional authorities, only a limited contribution of MBO to their overall operation was recorded. The main conclusions regarding the entire Greek public sector include (pp. 61–63): (a) absence of a general Total Quality Policy framework that would regulate the operation of the public sector and would beneficially affect the proper implementation of MBO, (b) absence of general administrative planning aimed at improving quality processes, (c) lack of a clear vision and mission from the leadership of each public body in which they were employed, (d) inadequate preparation for the implementation of MBO in terms of training and education of executives and employees, and (e) non-implementation of the existing institutional framework of MBO (Law 3230/2004). As for the difficulties encountered in the implementation of MBO in the Greek public administration, the research concludes that these are related to: (a) the structure of MBO and the proposed implementation procedures, (b) the maturity level of each organization in order to introduce and implement such organizational changes, (c) the lack of commitment and support from the leadership, as well as the implementation schedule, and (d) the lack of information for internal users, as well as for clients/citizens, about how MBO works and the benefits of using it (p. 65). Regarding the positive impact of implementing MBO, the study concludes (a) in upgrading cooperation and teamwork, as well as in establishing a collaborative culture and trust among employees, and (b) in the contribution of MBO to the creation of a mindset aiming at improving quality, which essentially leads employees to use their skills and expertise, thus making them more effective and productive (pp. 64–65).

4. Materials and Methods

4.1. Research Questions and the Research Questionnaire

The questions posed in our research are as follows: (1) To what degree is MBO implemented? (2) What are the key characteristics of MBO implementation in municipalities? (3) To what extent does MBO implementation differ according to the size of municipalities (small, large, metropolitan)? (4) What is the attitude of respondents regarding the correlation between MBO and their job satisfaction? (5) To what extent does the attitude of respondents regarding MBO implementation vary according to their position in the hierarchy? (6) What are the main obstacles to MBO implementation? (7) What are the necessary prerequisites for MBO implementation? (8) Which of the proposed conditions and initiatives are considered to contribute to the successful implementation of MBO? (9) Which of the proposed options do you believe MBO benefits or contributes to? (10) To what extent does MBO influence employee relationships? (11) What is the relationship between MBO and the performance measurement and enhancement process? (12) How significant is the contribution of elected municipal administration to the success of MBO implementation? (13) How successful is the implementation of MBO considered to be? (14) How useful and necessary is MBO considered to be for the operation of municipalities?
To address the questions above, we developed a questionnaire containing 45 questions across three dimensions: A, B, and C. Part A addresses the 3rd and 5th questions of the research. It includes 9 closed-ended questions (nominal and ordinal scales) regarding the following: gender, age, marital status, education, years of public service, employment relationship, position in the hierarchy, municipality size, and the service of employment. Our goal was to use them as independent variables for analyzing the two aspects (problems–challenges–benefits and implementation) of the dependent variable of this study (MBO). Part B addresses the 1st, 4th, 6th–9th, 11th, 12th, and 14th research questions. It consists of eleven closed-ended questions (Likert scale, from 1 to 5). The questions of this section were drawn from the questionnaires of empirical and qualitative research conducted in the context of investigating MBO in other local authorities [24,41,42,43,44]. It was designed to explore the opinions of all the participants (regardless of whether MBO was applied or not in their workplace) regarding those factors that hinder or are responsible for the non-implementation of MBO in their workplace. It was also designed to explore the significance attributed to specific characteristics, initiatives, and conditions regarding their ability to influence the success of MBO implementation in the services of the participants’ employment. Part C of the questionnaire, comprising 25 closed-ended items (questions 1, 2, 4, and 10 through 14), investigated the characteristics of MBO implementation within municipalities that have adopted MBO. The results obtained from this section will be reported in a forthcoming publication (Part II).
The questionnaire was created electronically using the Google Forms form-building tool. Its reliability was tested using Cronbach’s Alpha coefficient, the values of which are quite satisfactory for the 6 different dimensions of the questionnaire, as they exceed 0.7 (Table 1).

4.2. Methodology and Sampling Procedure

To gain a deeper understanding of MBO implementation in Greek local governance, we conducted a descriptive, exploratory empirical study. The study population comprised employees, appointed officials, and elected representatives from municipalities within the Region of Central Macedonia (RCM). Sample selection prioritized accessibility to maximize participation, considering the RCM’s 38 municipalities, including Thessaloniki, Greece’s second largest.
Several factors limited the scope of this research, including time constraints, accessibility challenges in reaching all potential participants, and a lack of precise knowledge regarding the total population size. Consequently, a non-probability sampling approach was adopted, using a snowball (convenience) sampling method. Data collection occurred via questionnaire distribution from 13 March to 21 April 2022. The municipality of Thessaloniki, selected for its size and metropolitan nature, served as the pilot site for the questionnaire. Subsequently, the questionnaire was distributed to the remaining RCM municipalities. The final sample consisted of 222 participants (N = 222).
For the statistical analysis of the results, the Statistical Package for the Social Sciences (SPSS) was used. Both descriptive and inductive statistical techniques were employed (e.g., Kolmogorov–Smirnov Test for normality, Pearson’s correlation coefficient, Chi-square Test). Finally, parametric and non-parametric tests were conducted (Independent Samples T-Test for mean comparison, Mann–Whitney U Test for homogeneity, One-Way ANOVA for equality of means, and Kruskal–Wallis for homogeneity).

4.3. The Sample and the Demographic Characteristics

Of the 222 participants (N = 222) in the survey (Table 2), the majority were female (65.8%), with males comprising the remaining 34.2%. The largest age group was over 51 years old (50.9%), followed by 41–50 (43.2%), with a smaller proportion in the 31–40 age range. Regarding education, most participants held postgraduate degrees (39.6%), followed by university degrees (27%) and degrees from higher technological institutions (10.8%). High school graduates comprised 18.5% of the sample, while only 4.1% held doctoral degrees. Most participants had over 20 years of work experience (55.9%), with substantial representation from those with 11–20 years of experience. Participants with less than 10 years of experience constituted 9.1% of the sample. The most common job role was employee (55.4%), followed by department head (29.3%), with directors and appointed officials making up the remaining 14%. Most participants were permanent employees (70.7%), with a smaller proportion holding indefinite-term contracts (23.4%) and fixed-term contracts (5%). Elected or appointed officials represented less than 1% (0.9%) of the sample. Regarding municipality size, 41.4% worked in metropolitan municipalities, 40.5% in municipalities with over 25,000 inhabitants, and 18% in municipalities with 10,000–25,000 inhabitants. Finally, the most represented service areas were Administrative Services (34.2%) and Economic Services (21.2%). Citizen Service Centers (KEP) (6.8%), Planning and IT Services (8.6%), Social Services (7.7%), and Cleaning and Recycling Services (7.2%) had lower representation.

5. Results and Discussion

The results for research questions 1, 6, 7, 8, and 9 are discussed below. Results for the other questions will be presented in Part II.

5.1. Question 1: “To What Degree Is MBO Implemented?”

To answer the first research question, we need to look at the responses to question B11 of the questionnaire in the table below (Table 3). We note that the minimum percentage of about 3.6% of the participants confirmed full implementation of MBO. Additionally, 29.3% of the participants (n = 65) stated that their municipality partially implements MBO or uses alternative goal-setting procedures, while most participants (60.8%) reported that MBO is not implemented in their municipality at all.
The aforementioned results are consistent with the conclusions of prior research and analyses, which have consistently highlighted the significant deficiencies of Management by Objectives (MBO) implementation within Greek municipalities and the broader public sector [41,42,45]. However, this study provides the first empirical validation of minimal MBO implementation across all municipalities within the RCM. This novel finding underscores the failure of the previous institutional framework, specifically Laws 3230/2004 and 4369/2016, to effectively integrate a unified New Public Management (NPM) policy into Greek local government. Consequently, the intended modernization of municipal management and the adoption of robust employee performance evaluation methods remain unrealized.

5.2. Question 6 “What Are the Main Obstacles to the MBO Implementation?”

To answer this question, the responses from question B1 were examined (Table 4).
As shown by the results, the main obstacle hindering the implementation of MBO was the lack of an effective and equitable performance measurement institutional framework (M = 4.32, SD = 0.836). This, combined with the high rates received for the response concerning the constraints of the municipal organizational system preventing the implementation of modern administrative measures, confirms the findings by Papalazarou and Tsoulfas [42], who noticed the absence of a Total Quality Policy (TQP) framework to be detrimental to the implementation of MBO. Particularly, it reflects the strong sentiment of the participants for the revision of the institutional framework for evaluating employee performance in the Greek public sector (Laws 3230/2004 and 4369/2016), since they consider it inadequate and unfair. Another important obstacle to the successful implementation of MBO-goal setting in municipalities was found to be the absence of strong political support from the Greek central public administration and the municipal leadership. This result aligns with previous relevant research which identifies the absence of political will [41,42] and the lack of commitment and support from leadership as substantial barriers to the successful implementation of NPM [46] and MBO [6,18,27,47]. Additionally, participants tend to agree that the failure to implement MBO-goal setting is associated with the concerns about disclosing employees’ and supervisors’ limitations in performing their tasks as well as the concerns about connecting MBO-goal setting with performance evaluation. This conclusion aligns with similar findings from previous relevant research [41]. The participants’ “fearful” attitude may be understood as a psychological reflex towards the unknown, given that MBO represents terra incognita for most of them. This interpretation could also be supported by the revelation of the inadequate training of municipal employees on MBO issues, being the primary obstacle to its successful implementation in municipalities. Furthermore, the insufficient provision of relevant technical tools (e.g., performance measurement indicators) by the superior competent authorities of municipalities (Regions, Ministry of Interior) holding a percentage of 80.6% (Table A1) sustains a serious obstacle to the implementation of MBO in municipalities today (M = 4.13, SD = 0.852). Finally, participants agree that the lack of service-specific performance indicators as well as lack of clear and measurable indicators are the main “technical” reasons hindering the implementation of MBO in municipalities. This is not surprising, as suitable measurement indicators are crucial for MBO’s functionality, as emphasized by researchers and analysts [48,49].

5.3. Question 7: “What Are the Necessary Prerequisites for MBO Implementation?”

To address this inquiry, we conducted an analysis of section B4 of the questionnaire. The descriptive statistics presented in Table 5 indicate that all responses have an average score exceeding 4 (M > 4). Most participants hold the belief that MBO-goal setting should focus on enhancing employee skills and knowledge rather than being punitive (M = 4.40). The recent revision of the MBO framework (Law 4940/2022), which outlines employee evaluation and goal-setting procedures, has led to a more cautious perspective. Specifically, the provision in Law 4940/2022 that absolves supervisors of responsibility in cases of low performance evaluation ratings (Article 10), which includes the assessment of goal attainment, could be interpreted as punitive. This could potentially elicit negative reactions from employees. The necessity for the MBO-goal setting initiative to garner support from all municipal staff (supervisors and employees) aligns with existing literature emphasizing the pivotal role of top managers (supervisors) in the success or failure of MBO implementation [2,27,50,51]. Furthermore, the acknowledgment by 83.3% of participants (Table A1) of the significant impact of municipal Master Plans on the success of MBO implies that participants view MBO as a strategic management tool. Additionally, the importance of a clear “vision” and “mission” from leadership, within the broader context of embracing comprehensive strategic planning and Total Quality Management (TQM) principles of New Public Management (NPM), was underscored by the research findings of Papalazarou and Tsoulfas [42].

5.4. Question 8: “Which of the Proposed Conditions and Initiatives Do You Consider Essential for the Successful Implementation of Management by Objectives (MBO)?”

To examine this question, we analyzed the responses from sections B3 and B5 of the survey (Table 6).
Participants identified the release of a “Goal Setting Guide” as the most significant initiative, with the highest mean value (M = 4.05). A “Guide” could help address and remove barriers to MBO implementation, such as the lack of relevant experience and insufficient training in MBO-related issues. Participants also view the connection between goal setting and performance evaluation positively. Furthermore, they advocate for the support of municipal services through a specialized department within the Ministry of Interior, as well as assistance from external organizations. These results align with the new institutional framework (Law 4940/2022) regarding the connection of goal setting with employee job appraisal and the role of Human Resource Development Advisors (Articles 16–17). In other words, recent developments align with and corroborate the findings of our research. Overall, participants show positive attitudes towards all proposed initiatives, with an average mean value close to 4 (Table 6).
In relation to the suggested conditions (question B3) for the effective execution of MBO, the predominant selections are “Clear control criteria for evaluating goal attainment” and “Clear and specific goals for each municipal service,” with a collective agreement percentage of 95% (Table A1), and mean scores of 4.43 and 4.38, respectively (Table 7).
Once again, these results confirm Drucker’s argument that goal setting is a primary process and lies at the heart of management [52] (pp. 226–227). Furthermore, the necessity of clear goal setting is indicated as an imperative choice for both political leadership and senior management of an organization because clear and distinct goals have a positive impact on the performance of managerial executives, the quality of work produced, and the services provided. Conversely, vague and difficult-to-measure goals lead to negative outcomes [53] (pp. 549, 529).

5.5. Question 9: “Which of the Proposed Options Do You Believe MBO Benefits or Contributes to?”

To address question 9, we analyzed the responses distribution from section B6 of the questionnaire (Table 8 and Table A1 in the Appendix A).
According to the results of the statistical analysis of the ninth research question, participants believe that the implementation of MBO contributes to improving internal operations and fostering a collaborative mindset among employees at all levels of administrative hierarchy as well as the elected administration of the municipality (improvement of relationships related to the internal organization of municipalities). Additionally, it could be argued that participants perceive MBO as a beneficial process for their professional development, as they believe it contributes to more credible evaluation (50% + 16.2% = 66.2%) and improves their individual performance (53.2% + 18.9% = 72.1%) while also providing incentives for its enhancement (Table A1). Furthermore, the majority (74.4%) recognized the positive impact of the MBO on enhancing the municipal services offered to citizens (Table A1). Our findings in this question align with those of previous research that identify the positive attitude of employees regarding the contribution of the MBO to increasing effectiveness and efficiency in local governance, improving the quality of the services provided, as well as enhancing the productivity and efficiency of employees both in Greece as well as in other counties [32,37,38,42].
The findings of this research corroborate the observation of a suboptimal and inadequate implementation of Management by Objectives (MBO) within Greek local governance. Nevertheless, participants expressed the belief that MBO implementation in municipalities holds the potential for positive impact across diverse aspects of municipal service delivery. Specifically, they concurred that MBO could enhance employee performance, improve citizen service provision, and facilitate more effective communication among staff. Furthermore, participants emphasized the importance of several conditions for successful MBO implementation, including the articulation of clear and distinct goals for each municipal service, the establishment of transparent criteria for monitoring and controlling objective achievement, and the facilitation of open dialogue between supervisors and employees regarding goal setting. However, several challenges and obstacles were identified, including a perceived deficit in political will at both central and local government tiers, insufficient employee training, and technical impediments in the employee performance evaluation process. Despite these challenges, it is posited that the establishment of conducive conditions and the implementation of strategic initiatives may enable the successful operationalization of MBO in Greek local governance.

Author Contributions

Conceptualization, M.L. and A.S.; methodology and software, M.L.; validation, M.L. and A.S.; formal analysis, M.L. and A.S.; investigation, data curation and writing—original draft preparation, M.L.; writing—review and editing, M.L. and A.S.; supervision, A.S. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

The data collection was anonymous using a blind survey through electronically sent questionnaires and all participants were informed about the purpose of the study, how the data will be used, and stating that the data are anonymous, confidential, follows international rules of research ethics and complete confidentiality and there are no risks involved in participating.

Data Availability Statement

Dataset available on request from the authors.

Conflicts of Interest

The authors declare no conflict of interest.

Appendix A

Table A1. Relative frequences of the participants answers to the questionnaire questions B1–B6.
Table A1. Relative frequences of the participants answers to the questionnaire questions B1–B6.
Study Variables/QuestionsResponse OptionsAbsolutely DisagreeDisagreeNeither Disagree/Nor AgreeAgreeStrongly Agree
B1. The main obstacles to the implementation of MBO—goal setting in municipalities today concern the following:Insufficient political support from the Central Public Administration1.8%6.8%27.0%44.6%19.8%
Insufficient political will from municipal leaders to support MBO implementation.2.3%7.2%19.4%46.4%24.8%
No link between goal setting and pay/benefit incentives.1.8%3.6%17.6%47.7%29.3%
Lack of cooperation between supervisors and employees.3.2%20.3%27.9%35.1%13.5%
Concerns about connecting MBO-goal setting with performance evaluation.5.0%14.4%20.3%42.8%17.6%
Fear of exposing superiors’ inability to perform their duties.3.6%16.2%19.8%44.6%15.8%
Concerns associated with disclosing employees’ performance limitations.5.9%14.4%24.8%41.0%14.0%
A training deficit exists among municipal employees regarding MBO goal setting.1.8%4.1%11.7%49.1%33.3%
Constraints within the municipal organizational system impede the implementation of contemporary administrative practices.0.9%5.9%14.0%44.1%35.1%
Lack of an effective and equitable performance measurement institutional framework.1.4%2.3%9.0%37.8%49.5%
Superior authorities (e.g., Regions and the Ministry of the Interior), have not provided adequate tools for goal-setting processes (e.g., performance measurement indicators for municipal services).1.4%2.3%15.8%43.7%36.9%
B2. The main technical obstacles that prevent the implementation of the MBO—goal setting in the municipalities concern:Lack of service-specific performance indicators.0.9%3.2%13.1%55.9%27.0%
Lack of clear and measurable indicators.0.5%3.6%10.4%58.6%27.0%
Lack of adequately configured applications for the preparation and monitoring of MBO per service.1.4%5.4%18.9%50.5%23.9%
Absence of specialized training programs related to MBO—goal setting for municipalities.1.8%7.7%16.2%45.0%29.3%
B3. Please indicate whether you agree/disagree that the following conditions must be met for the MBO—goal setting to apply in the municipalities:To set clear and distinct goals for each municipal service.0.5%0.0%4.1%52.3%43.2%
The employees should participate in the goal-setting process.0.9%2.3%8.1%54.1%34.7%
Goals should be communicated between supervisors and employees.0.5%0.5%0.5%50.5%43.7%
Those involved (elected officials, supervisors, employees) must know the intended results of achieving the objectives.0.9%0.5%4.5%51.4%42.8%
Clear criteria should be established for monitoring and controlling the achievement of the objectives.0.5%0.5%4.1%45.5%49.5%
Supervisors and employees should be given the opportunity to operate freely and independently in determining the methods and timelines for achieving their goals.1.4%5.4%20.7%44.6%27.9%
B4. Please indicate your agreement/disagreement as to whether the following are necessary conditions for the application of the MBO—goal setting in the municipalities:The revision of the institutional framework for the MBO—goal setting process.0.5%0.9%12.2%59.5%27.0%
Adequate training for all involved in the MBO—goal setting process.0.0%0.9%5.9%48.6%44.6%
The support of the MBO—goal setting process by the elected municipal administration.0.5%1.8%9.5%51.4%36.9%
The support of the MBO—goal setting process by the supervisors (i.e., heads of Directorates/Departments) and employees.0.5%0.5%6.3%52.3%40.5%
The institutional assurance that MBO—goal setting will NOT be punitive but will aim to improve skills and knowledge.0.9%0.9%8.1%37.8%52.3%
The institutional assurance that MBO—goal setting will NOT have a punitive nature but will aim to identify the conditions that prevent the achievement of the goals/objectives.0.9%0.9%9.0%39.2%50.0%
The essential application of the Master Plans of the municipalities.0.5%1.8%14.4%50.0%33.3%
B5. Mark whether you agree/disagree that the following initiatives contribute to the successful implementation of the MBO—goal setting in the municipalities:The release of a “Goal Setting Guide” providing instructions on technical aspects related to formulating and implementing goals.0.0%1.8%18.9%51.8%27.5%
Establishment of an advisory service for MBO goal setting at the ministerial level of the Central Government.1.4%4.1%18.5%48.6%27.5%
Municipalities receive support from specialized advisory bodies, both public and private.0.9%4.1%15.8%53.6%25.7%
To implement MBO—goal setting as an integral part of employee job performance evaluation.8.6%13.5%26.1%33.3%18.5%
B6. Please indicate whether you agree/disagree that the implementation of the MBO—goal setting contributes to the following:Improvement of the employees’ individual performance.0.9%5.4%21.6%53.2%18.9%
Improvement of the ongoing communication processes among the employees of the municipality’s services.0.5%5.9%29.3%45.0%19.4%
Strengthening the link between work performance and the bonus system.2.7%6.8%26.1%46.8%17.6%
Enhancement of the validity of the employee performance evaluation process.2.7%6.8%24.3%50.0%16.2%
Improvement of the relationships among colleagues working in the same service unit.4.1%13.1%39.2%33.3%10.4%
Enhancement of the working relationships across all levels of the service/administrative hierarchy, including employees, supervisors, and elected administration3.6%10.8%35.6%36.9%13.1%
Enhancement of the services offered to citizens.1.8%5.0%18.9%50.5%23.9%

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Table 1. Reliability of questionnaire dimensions.
Table 1. Reliability of questionnaire dimensions.
Questionnaire DimensionsCronbach’s AlphaNumber QuestionsTotal of Answers
B1. The main obstacles for the implementation of MBO—goal setting *0.79811222
B2. The main technical obstacles preventing the implementation of MBO—goal setting0.8244222
B3. What conditions are needed for the application of MBO—goal setting0.7996222
B4. Necessary prerequisites for the application of MBO—goal setting0.8597222
B5. Initiatives which contribute to the successful implementation of MBO—goal setting0.7524222
B6. The contribution of the implementation of MBO—goal setting0.8997222
* The term MBO was also addressed as “MBO—goal setting” because in the Greek public sector, MBO was closely associated with the goal-setting process.
Table 2. The research sample.
Table 2. The research sample.
VariablesCategories of VariablesFrequenciesRelative Frequencies
SexMale7634.2%
Female14665.8%
Age20–3000%
31–40135.9%
41–509643.2%
51 and above11350.9%
Marital statusMarried4319.4%
Unmarried17980.60%
EducationSecondary education4118.5%
Technological institution degree2410.8%
University degree6027%
Master’s degree8839.6%
Ph.D. degree94.1%
Years of service in the public sector0 to 5 years104.5%
6 to 10 years83.6%
11 to 20 years8036%
More than 20 years12455.9%
Position of employment in the municipalityEmployee12355.4%
Head of department6529.3%
Head of directory3114%
Head of general directory00%
Non-permanent staff31.4%
Working law status/position in the municipalityPermanent employee15770.7%
Under contract of indefinite duration5223.4%
Under fixed-term contract115.0%
Elected representative/non-permanent staff20.9%
The size of the municipality I work at (in total population):Less than 10,000 inhabitants00%
From 10,000 to 25,000 inhabitants4018%
Over 25,000 inhabitants9040.5%
Is metropolitan *9241.4%
Job position/
I work at: 		Financial services4721.2%
Administrative services7634.2%
Social services177.7%
Citizens’ Service Centers (KEPs)156.8%
Environment, Sanitation and Recycling services167.2%
Technical and engineering services3214.4%
Programming and IT Services198.6%
* Metropolitan municipalities of RCM: Thessaloniki, Ampelokipon–Menemenis, Kalamarias, Kordelio–Evosmou, Neapolis–Sykeon, Pavlou Mela, Pylaias–Hortiati.
Table 3. Relative frequencies of the participants’ answers to the questionnaire question B11 (n = 222).
Table 3. Relative frequencies of the participants’ answers to the questionnaire question B11 (n = 222).
Study Variable/QuestionResponse OptionsFrequenciesRelative Frequencies
NO13560.8%
YES83.6%
B11. Does the MBO apply in the municipality you work?An alternative procedure (apart from Law 3230/2004) is used to monitor employee efficiency and performance.229.9%
Not fully applied5725.7%
Table 4. Descriptive statistics of the study variables in B1 and Β2 questions (N = 222).
Table 4. Descriptive statistics of the study variables in B1 and Β2 questions (N = 222).
Study Variable/
Question		Response OptionsMinMaxMeanSD
B1. The main obstacles
to the implementation
of MBO—goal setting
in municipalities: 		Insufficient political support from the Central Public Administration153.740.915
Insufficient political will from municipal leaders to support MBO implementation.153.840.955
No link between goal setting and pay/benefit incentives.153.990.882
Lack of cooperation between supervisors and employees.153.361.048
Concerns about connecting MBO-goal setting with performance evaluation.153.541.091
Fear of exposing superiors’ inability to perform their duties.153.531.054
Concerns associated with disclosing employees’ performance limitations.153.431.081
A training deficit exists among municipal employees regarding MBO goal setting.154.080.878
Constraints within the municipal organizational system impede the implementation of contemporary administrative practices.154.070.897
Lack of an effective and equitable performance measurement institutional framework.154.320.836
Superior authorities (e.g., Regions and the Ministry of the Interior), have not provided adequate tools for goal-setting processes (e.g., performance measurement indicators for municipal services).154.130.852
B2. The main technical obstacles that prevent
the implementation of the MBO—goal setting
in the municipalities:		Lack of service-specific performance indicators.154.050.780
Lack of clear and measurable indicators.154.080.745
Lack of adequately configured applications for the preparation and monitoring of MBO per service.153.900.871
Absence of specialized training programs related to MBO—goal setting for municipalities.153.920.960
Table 5. Descriptive statistics of the study variable in question B4 (N = 222).
Table 5. Descriptive statistics of the study variable in question B4 (N = 222).
Study Variable/
Question		Response OptionsMinMaxMeanSD
B4. Please indicate your agreement/disagreement as to whether the following are necessary conditions/prerequisites for the application of the MBO (goal setting) in the municipalities:The revision of the institutional framework for the MBO.154.120.676
Adequate training for all involved in the MBO.154.370.637
The support of the MBO by the elected municipal administration.154.230.727
The support of the MBO by the supervisors (i.e., heads of Directorates/Departments) and employees.154.320.653
The institutional assurance that MBO will NOT be punitive but will aim to improve skills and knowledge.154.400.752
The institutional assurance that MBO will NOT have a punitive nature but will aim to identify the conditions that prevent the achievement of the goals/objectives.154.360.759
The actual application of the municipal “Master Plans”.154.140.757
Table 6. Descriptive statistics of the study variable in question B5 (N = 222).
Table 6. Descriptive statistics of the study variable in question B5 (N = 222).
Study Variable/QuestionResponse OptionsMinMaxMeanSD
B5. Mark whether you agree/disagree that the following initiatives are essential for the successful implementation of the MBO—goal setting in the municipalities:The release of a “Goal Setting Guide” providing instructions on technical aspects related to formulating and implementing goals.154.050.732
Establishment of an advisory service for MBO goal setting at the ministerial level of the Central Government.153.970.863
Municipalities receive support from specialized advisory bodies, both public and private.153.990.813
To implement MBO—goal setting as an integral part of employee job performance evaluation.153.401.183
Table 7. Descriptive statistics of the study variable in question B3 (N = 222).
Table 7. Descriptive statistics of the study variable in question B3 (N = 222).
Study Variable/
Question		Response OptionsMinMaxMeanSD
B3. Please indicate whether you agree/disagree that the following conditions must be met for the MBO—goal setting to apply in the municipalities:To set clear and distinct goals for each municipal service.154.380.610
The employees should participate in the goal-setting process.154.190.751
Goals should be communicated between supervisors and employees.154.360.643
Those involved (elected officials, supervisors, employees) must know the intended results of achieving the objectives.154.350.674
Clear criteria should be established for monitoring and controlling the achievement of the objectives.154.430.640
Supervisors and employees should be given the opportunity to operate freely and independently in determining the methods and timelines for achieving their goals.153.920.907
Table 8. Descriptive statistics of the study variable in question B6 (N = 222).
Table 8. Descriptive statistics of the study variable in question B6 (N = 222).
Study Variable/QuestionResponse OptionsMinMaxMeanSD
B6. Please indicate whether you agree/disagree that the implementation
of the MBO—goal setting contributes to
the following:		Improvement of the employees’ individual performance.153.840.824
Improvement of the ongoing communication processes among the employees of the municipality’s services.153.770.844
Strengthening the link between work performance and the bonus system.153.700.929
Enhancement of the validity of the employee performance evaluation process.153.700.913
Improvement of the relationships among colleagues working in the same service unit.153.330.968
Enhancement of the working relationships across all levels of the service/administrative hierarchy, including employees, supervisors, and elected administration153.450.972
Enhancement of the services offered to citizens.153.900.884
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Liozidou, M.; Stafyla, A. Management by Objectives (MBO) in the Greek Local Government: An Empirical Study on the Municipalities of the Central Macedonia Region (Part I). Proceedings 2024, 111, 17. https://doi.org/10.3390/proceedings2024111017

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Liozidou M, Stafyla A. Management by Objectives (MBO) in the Greek Local Government: An Empirical Study on the Municipalities of the Central Macedonia Region (Part I). Proceedings. 2024; 111(1):17. https://doi.org/10.3390/proceedings2024111017

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Liozidou, Maria, and Amalia Stafyla. 2024. "Management by Objectives (MBO) in the Greek Local Government: An Empirical Study on the Municipalities of the Central Macedonia Region (Part I)" Proceedings 111, no. 1: 17. https://doi.org/10.3390/proceedings2024111017

APA Style

Liozidou, M., & Stafyla, A. (2024). Management by Objectives (MBO) in the Greek Local Government: An Empirical Study on the Municipalities of the Central Macedonia Region (Part I). Proceedings, 111(1), 17. https://doi.org/10.3390/proceedings2024111017

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