What is Management by Objectives and How Does it Work?

Management by Objectives (MBO) is a process in which a manager and employee collaborate to set, track, and monitor specific goals over a given period of time. This technique is designed to align objectives across the organization, increase employee engagement, and boost productivity.

Goal-based management uses the

company's main objectives to determine individual objectives. This allows all members of the organization to see how their work contributes to the company's overall goals and priorities.

MBO is an important component of a professional management style, which has been proven to lead to successful growth. For example, a group of managers (sales, promotion, advertising) who report to a vice president of marketing should formulate their collective objectives and define ways to help each other and evaluate the effectiveness of others in the common task. Typically, each manager's range of options is limited to one option for a part of organizational action or improvement of specific statistics. The less time spent per customer and fewer calls, the better the customer service manager will accomplish his goals.

However, considering individual objectives first does not minimize the importance of the organization's objectives. MBO is a supervised and managed activity so that all individual objectives can be coordinated to work towards the overall objective of the organization. The management of IT company Hewlett-Packard (HP) has said that it considers politics a fundamental component of its success. It is also important to consider environmental factors that may hinder the achievement of goals, such as lack of resources or administrative support.

Reliable management information systems are needed to set relevant objectives and monitor their outreach relationship objectively. Costs decrease and profits increase, but customer service managers are killing the company and have no joy in their work. In order for MBO to be successful, managers must be able to evaluate their employees' performance objectively. This allows managers to do the work that needs to be done step by step to allow for a calm but productive work environment.

If there were none, both managers and their superiors could have made an earlier and more comfortable decision about separation. Each manager should receive specific compensation for how well they develop people, based on those evaluations.