Management by Objective-MBO

Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identify their objectives, time lines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach objectives.

Management by Objectives (MBO) was first outlined by Peter Drucker in 1954 in his book 'The Practice of Management'. In the 90s, Peter Drucker himself decreased the significance of this organization management method, when he said: "It's just another tool. It is not the great cure for management inefficiency... Management by Objectives works if you know the objectives, 90% of the time you don't."

MBO (or management by objectives) is a technique credited to management guru Peter Drucker, to describe a method of performance management that is based on the setting of clear and measurable objectives, and the use of those objectives to evaluate and review performance. When done correctly, MBO is probably the best, and fairest way to plan for and create effectively performing employees, although, of course, if the implementation is poor, the outcomes will be poor.

Here's a formal definition:

Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identify their objectives, time lines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach objectives.

By Drucker - Management by objectives can improve the performance of an organization by transforming an organization%u2019s goals into personal goals. Personal goals are determined by their contribution to the objectives of the whole organization. And each person knows how his contribution is combined with the contributions of others to reach the objectives of the organization.

By Jacquelyn Lynn - This article builds a case for setting "stretch goals"—tough, but attainable. It continues with how to define the goal so it meets important criteria: quantifiable, long-term goals broken down into weekly or monthly milestones and continual monitoring of progress. The last section explores how to build commitment by employees to the goals. One approach: "Level with your people about why the goal is critical."