HR Glossary

Management by Objective

What is Management by Objective?

Management by Objective (MBO) is a system of management that uses specific, measurable goals to guide and coordinate individual and departmental efforts. Managers and employees work together to develop objectives that are specific, measurable, attainable, relevant, and time-bound. Once the objectives are set, employees are held accountable for meeting them. MBO helps to ensure that everyone in the organization is working towards the same goals and that everyone is aware of what is expected of them.

Why do you need Management by Objective?

In order to effectively manage a company’s resources, it is important to have a system in place that allows for the measurement and assessment of progress and success. Management by objective (MBO) is one such system that can be used to help a company achieve its goals.

MBO is a management system that is based on the principle that employees should be given specific goals and objectives that they are responsible for achieving. In order to ensure that these goals are met, a company’s management team must work closely with employees to create and monitor these objectives.

The use of MBO can be extremely beneficial for a company. By setting specific goals and objectives, a company can measure its progress and ensure that it is on track to achieve its goals. Additionally, MBO can help to motivate employees by giving them a sense of ownership and responsibility for their work. Finally, MBO can help to improve communication between employees and management.

What sort of companies need Management by Objective?

There are a few different types of companies that need Management by Objective. Typically, companies that are growing rapidly need this type of management in order to keep track of all of the moving pieces. Additionally, companies that are facing tough competition or are in a declining market may also need to implement Management by Objective in order to improve their performance. Finally, companies that are looking to become more efficient and productive may also find value in this type of management.

How do you build a Management by Objective system?

The first step in building a Management by Objective system is to develop a set of specific, measurable goals for the organization. Managers and employees should work together to create achievable goals that are relevant to the company’s overall strategy. Once the goals have been established, everyone in the organization should be held accountable for meeting them. Regularly measuring progress against the goals helps ensure that everyone remains focused on achieving the organization’s objectives. Management by Objective systems can be adapted to any size organization, and they can be used to improve performance in any area, from sales to employee satisfaction.


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