What is Management by Objectives?

Management by objectives is a results-based approach to performance management. Upper-level management defines the strategic goals of the organization and passes these goals down to the next tier of management so they can define the goals they must achieve to enable the organization to meets its broader goals.

Management by Objectives (MBO) is a management process that emphasizes setting specific, measurable, achievable, relevant, and time-bound (SMART) objectives or goals for an organization, team, or individual employee. MBO is a goal-setting approach that is used to align the organization's goals with the objectives of individual employees, and to ensure that everyone is working towards the same goals.

The MBO process typically involves the following steps:

  • Setting goals: The manager and employee work together to establish goals that are specific, measurable, achievable, relevant, and time-bound.
  • Developing action plans: The employee develops an action plan to achieve the goals, which includes identifying necessary resources, timelines, and steps to be taken.
  • Regular progress review: The manager regularly meets with the employee to review progress towards the goals, and to provide feedback and support as needed.
  • Performance evaluation: At the end of the specified time period, the manager and employee evaluate the employee's performance based on the achievement of the agreed-upon goals.

    MBO is designed to help organizations and employees focus on specific objectives and outcomes, and to promote accountability and performance improvement. By setting clear and measurable goals, employees are more likely to understand what is expected of them, and to be motivated to achieve the desired outcomes.

    However, the success of MBO depends on several factors, including the quality of the goal-setting process, the quality of the feedback and support provided by the manager, and the level of buy-in and commitment from employees. When implemented effectively, MBO can be a valuable tool for improving organizational performance and employee satisfaction.