MBO (Management By Objectives)

MBO (Management By Objectives)

Management by objectives (MBO) is a personnel management technique where managers and

employers work together to set, record and monitor goals for a specific period of time. Organizational goals and planning flow top-down through the organization and are translated into personal goals for organizational members.

Characteristics of MBO

• It is a technique and philosophy of management.
• Objectives are established for all levels of the organization.
• Objectives in MBO provide guidelines for procedures.
• A periodic review of performance is important.
• Employees are provided with feedback an actual to planned performance.

Process of MBO

• Establish long term goals.
• Establish specific performance objectives.
• Develop action plans.
• Appraise result.
• Take corrective action.

• Management by exception (MBE)
• Planning
• Decision Making Process
• Definition of Management

Need and importance of MBO

• MBO procedures clear and measurable performance goals.
• MBO program sharpens the planning process.
• MBO helps in developing effective controls.
• MBO encourages commitment rather than compliance.
• MBO improves communication between superiors and subordinates.