Management by objectives

Management by objectives (MBO) is a process where a manager and employee agree on goals and then develop a plan to achieve them. The goal is to align objectives throughout an organization and increase employee participation and commitment. MBO is a strategic approach to enhance the performance of an organization.

Steps in the MBO process

SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound.

1. Set goals

2. Set realistic goals

3. Jointly participate in goal setting, planning, and controlling

4. Provide feedback

5. Collaboration with employees

6. Assess progress

7. Reward excellent performance

8. Encourage improvement

9. Review goals

MBO categorization

MBO objectives can be categorized into three types:

1. Strategic: Broad, general objectives determined by company management

2. Tactical or Team: More specific objectives set for teams or departments

3. Operational or Individual: Specific objectives belonging to an individual