Management by Objectives

05/02/2023

Process of defining objectives within an organization– Systematic and organized approach– Allows management to focus on achievable goals– Allows management to attain the best possible results

from available resources Key features:

– Goal setting– Choosing course of action– Decision making

Aim: to increase organizational performance by aligning goals and subordinate objectives throughout the organization– Employees more likely to fulfill their responsibilities

when they are actively involved in defining objectives Incentives linked with results

The MBO Concept

05/02/2023

Strategic Objectives

Operations Objectives

Branch/Department Objectives

Individual Objectives

MBO Pyramid

05/02/2023

Start period

Review and define

objectives

Set employee objectives

Monitor progress

Evaluate performance

Reward employees

MBO Cycle

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Objective Criteria

Is It Specific?

Is It Measurable?

Is It Appropriate?

Is It Realistic?

Is It Time-Bound?

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Improvement Objectives

Innovation Objectives

Types of Objectives