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What is management by objectives MBO?

A management model aims to improve performance, or it is a process of defining objectives

with an organization, so that management and employees agreed to the objectives and
understand what they have to do to achieve objectives.

What are the benefits of MBO?

 It is to participating of goals studding, choosing courses of actions and decisions making.

 An important part of the MBO is the measurement and the comparison of the employee’s
actual performance with the standards set.
 When the employees themselves have been involved with the goals setting and choosing
the course of action to be followed by them, they are more likely to fulfill their
responsibilities.

link objectives with Establishment of Definition of firm's

incentives by the objectives per employee overall goals by top
software system by direct management management

Feedback and performance

Progress and goals giving to employee is an
achievemetnts measurment adjustement of training to their
capabilities

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What are the advantages of MBO?

 Helps to focus on goals achievement.

 Evaluates performance.
 Highlights needs for improvements.
 Asses on the right track.
 Increases motivations.
 Guaranties that everyone is on the same page, as employees have a better knowledge of
the organization goals.

What are the disadvantages of MBO?

 Employees neglecting important matters, not included in their goals list.

 Being too bureaucratic.
 Difficulties of defining objectives.
 Temptation to unethical behavior.
 Focusing only on outcome goals.

MBO works if you know the objective

Yet
90% of the time you don’t

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  Goals should be challenging but easy (if goals are too easy, employees are not motivated,
and if the goals are too difficult, employees are depressed).
 Clear and simple goals, better performance.
 Goals must be smart, measurable, actionable, realistic, specified and time sensitive.
 The top management should be committed to MBO.
 Goals should be re-established frequently (quarterly).

 Should focus on the evaluation of

results
 Insure that the right objectives
were assigned to the right people
based on analysis

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 identifie
provide
objectives for
information
each employee
about the firm's
& track to the
goals
end

evaluate
performance compare self
with a 360 with supervisor's
degree evluation
feedback

allow employee
fit between
to track the
competencies
evaluation of his
& suitable
current and past
objectives
performance

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 Finds areas of Improves employees's Identifies training needs
improvement motivation

Increases fairness in the Uses capabilities to

rewarding process increase profits

Better training process

Increased motivations

Increased number of employees

Improvement of company’s image

Involvement of all employees

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