What is Management by Objectives?

What is Management by Objectives?

Management by Objectives (MBO) is a performance management approach where managers and employees work together to identify, plan, and achieve specific objectives within a set timeframe. The process aligns individual goals with the overall goals of the organization.

Key Features of Management by Objectives

  1. Goal Alignment: Ensures that individual objectives support organizational goals.
  2. Collaboration: Involves joint goal setting and planning between managers and employees.
  3. Performance Measurement: Establishes clear criteria for measuring progress and success.
  4. Accountability: Holds employees accountable for achieving their objectives.

How Management by Objectives Works

The MBO process begins with the establishment of clear and measurable objectives at the organizational level. These objectives are then cascaded down to individual employees, who work with their managers to develop specific action plans. Progress is monitored through regular check-ins and performance reviews. At the end of the review period, achievements are assessed, and new objectives are set for the next cycle.

Best Practices for Implementing Management by Objectives

  1. Set SMART Goals: Ensure objectives are Specific, Measurable, Achievable, Relevant, and Time-bound.
  2. Regular Feedback: Provide continuous feedback and support to help employees achieve their goals.
  3. Encourage Participation: Involve employees in the goal-setting process to increase commitment and motivation.
  4. Align Objectives: Ensure that individual goals are aligned with the strategic objectives of the organization.


Benefits include improved alignment between individual and organizational goals, increased employee engagement, and enhanced performance accountability.

Objectives should be reviewed regularly, typically on a quarterly basis, to track progress, provide feedback, and make necessary adjustments.

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