Management by Objective

What is Management by Objective?

Management by objective (MBO) is a performance management approach where managers and employees collaboratively set specific, measurable goals aligned with organisational objectives. Introduced by Peter Drucker, MBO involves defining clear objectives, developing action plans, and conducting regular reviews to assess progress. Performance is evaluated based on whether the agreed-upon objectives have been achieved. MBO promotes employee engagement through participation in goal-setting and provides a transparent basis for performance appraisal, compensation decisions, and career development discussions.