What MBO means
The concept of management by objectives was, according to Addicted2Success.com, first systematically described in the 1950s by renowned management expert Peter Drucker. Its central idea is that an organisation’s performance improves when all its employees are clear about the goals they are expected to achieve, and understand how their work contributes to the company’s overall strategic objectives.
MBO's core principles
Do you want to improve your management style and increase your team’s effectiveness? Then incorporate the following core principles of the MBO technique into your strategy.
- Setting clear, measurable goals. MBO is based on the definition of specific goals that are achievable, measurable, and time bound (in accordance with the so-called SMART methodology). These goals must be agreed upon by both manager and employees. As employees are involved in setting the goals, they are generally much more motivated to achieve them.
- Employee involvement. Unlike the authoritarian approach, MBO assumes the active involvement of employees in the planning process. The manager discusses the goals with them and allows them a degree of autonomy in determining how to reach those goals.
- Regular evaluation and feedback. MBO includes ongoing monitoring of progress and regular feedback. This allows for timely adjustments to plans if necessary, and helps prevent problems before they develop into major issues.
- Evaluation based on results. Unlike traditional approaches, which may focus more on effort than outcomes, MBO emphasises performance. Employees are evaluated based on how successfully they meet the agreed goals, regardless of the methods used to achieve them.
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