Also known as: Employee Performance Review, MbO
Management by Objectives (MbO) is a performance management technique that leverages clearly defined objectives as a central leadership tool. Unlike top-down approaches, MbO is built on the principle that goals are mutually agreed upon by both supervisors and employees. This collaborative goal-setting process ensures that employees are actively involved in defining their targets and are more likely to stay motivated and engaged.
A core component of the MbO approach is the manager’s commitment to supporting employees in achieving their goals. This support is provided through regular check-ins, performance discussions, and guidance meetings that help employees stay on track and overcome challenges.
Core Elements of Management by Objectives
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Objective System: A structured framework consisting of overall goals and specific sub-objectives, aligned with organizational strategy.
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Organizational Clarity: Clearly defined roles and responsibilities that empower employees to take ownership of their tasks.
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Performance Monitoring: A control system that continuously measures and analyzes deviations between target goals and actual performance, allowing for timely interventions.
How Management by Objectives Works
The MbO process is based on delegating responsibility for actions to employees, while the manager retains leadership responsibility. This shift not only lightens the managerial workload but also enhances employees’ sense of ownership and identification with the company’s broader objectives.
By aligning individual and team goals with the strategic direction of the organization, Management by Objectives creates a transparent and accountable work culture that drives performance, boosts motivation, and fosters continuous improvement.
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