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Frequently Asked Questions About Performance Management, Performance Appraisals, Employee Reviews, Appraisal Forms and More

What IS MBO (Management by Objectives)

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.

See also: The Performance Management Reference Library: Management By Objectives