HR Glossary

Management By Objective (MBO)

MBO is a strategic management model outlined by the management guru Peter Drucker in his book ‘The Practice of Management’ in 1954. The model is aimed to improve the performance of the organisation and are mutually agreed upon by the management and the employees. This model of management believes that when the employees have a say in the goal setting, they tend to be more willing to participate and work progressively for the achievement of organisational goals.

Management by objectives outlines five steps that organizations should use to put the management technique into practice. To put it into practice, the employees must revise the organisational objectives. The next step is to comprehend the organisational objectives into the employee objectives. After that, the employer is supposed to encourage the employees to achieve their individual objectives and monitor their performance.