Management by Objectives (MBO) is a strategic approach to improving an organization's performance. It is a process in which the objectives of the organization are defined and transmitted by management to the members of the organization with the intention of achieving each objective. Goal-based management uses the company's main objectives to determine employee objectives. MBO allows all members of the company to see what they have achieved in relation to the company's main objectives and priorities while performing tasks.
This shows how activity and outcome go together and can dramatically increase productivity. The process of setting objectives in the organization to give employees a sense of direction is called Management by Objectives (MBO). Obviously, no goal will have significant incentive power if they are forced decisions that are not related to a person's underlying personal dreams, desires, and aspirations. An important step in the MBO approach is the monitoring and evaluation of the performance and progress of each employee against the objectives set. Objectives can be set in all domains of activities, such as production, marketing, services, sales, R&D, human resources, finance, and information systems. For reasons I have already indicated, it should be fully legitimate in all businesses that these concerns serve as the basis for setting individual objectives.
Management by objectives defines the roles and responsibilities of employees and helps them define their future course of action in the organization. Some may argue that my criticisms are unfair, that many organizations start their planning and goal setting from the bottom up. Another reason is that often, when senior management sets goals, they are not aware of significant barriers to achievement, which makes managers cynical. If that is the case, then the key environmental factor in accomplishing tasks and managing growth is the relationship between the manager and the manager. Ongoing feedback is complemented by frequent formal evaluation meetings where superiors and subordinates can discuss progress toward goals, leading to greater feedback.
Also in these contexts, the manager could raise questions and concerns about qualitative aspects of performance. The functions of these managers can be centralized by appointing a project manager who can monitor and control the activities of the various departments. Management by objectives is still practiced today, with a focus on planning and development that helps several organizations. Once this is done, the MBO process assumes that the manager a) will work hard to achieve it, b) will be pushed internally because of this commitment, and c) will be accountable to the organization for doing so. Therefore, the higher a person rises in an organization and the more varied and subtle the work, the more difficult it is to pinpoint objectives that represent more than a fraction of their effort. If there were none, both managers and their superiors could have made an earlier and more comfortable decision about separation.