Management by objectives (MBO) is a technique in which supervisor and subordinate jointly set goals for the latter and periodically assess progress toward those goals. One can engage in a modest MBO program by setting goals with your subordinates and periodically providing feedback. However, “MBO” usually refers to a formal organization wide program in which managers at each organizational level meet with subordinates to hammer to goals that make sense in terms of each department’s assigned goal. The process typically includes using special forms and assessing employees’ progress frequently.
The MBO process typically consists of five steps:
- Set organization goals
- Set department goals
- Discuss department goals
- Set individual goals
- Give feedback
Management by objectives (MBO) is a technique designed to improve motivation and commitment by having the manager and employee jointly set objectives, assess progress on the objectives, and evaluate the end results.
Management by Objectives (MBO) involves setting specific measurable goals with each employee and then periodically reviewing the progress made.