Management By Objectives Empowers Productivity At Work

Management By Objectives
Management By Objectives

Management by objectives (MBO) is a popular method of management that is used in organizations across many different industries. It is a method of management that is focused on setting and achieving goals. The idea behind MBO is that by setting measurable goals and objectives, an organization can more easily and effectively achieve its desired outcomes.

The previous blog explained that the business objectives define the purpose, direction, and goals of a business and provide a roadmap for the company to achieve its goals. And another previous blog defined how to define objectives.

Management by objectives (MBO) emphasizes the importance of setting specific, measurable, achievable, relevant, and time-bound (SMART) goals for employees and aligning them with the overall goals of the organization. The approach involves managers and employees collaborating to establish objectives, evaluating progress, and rewarding success. MBO is a useful tool for companies seeking to enhance employee motivation, productivity, and overall performance.

Implementing MBO

Goals should be clearly defined, with a set timeline and clear expectations of what needs to be achieved. Additionally, goals should be achievable and realistic, taking into consideration the organization’s resources and capabilities.

5 Step Approach for Implementing Management By Objectives
5 Step Approach for Implementing Management By Objectives

When it comes to implementing MBO, the key is to develop and communicate a clear plan of action. This involves mapping out the goals and objectives, the resources needed to achieve them, and the timeline for achieving them. It is important to ensure that all stakeholders are aware of the plan and that each individual worker understands his or her role in achieving the goals.

Once objectives are established, managers and employees should develop action plans for achieving them. This involves outlining specific steps that need to be taken and determining who will be responsible for each task. For example, the sales team may need to research potential clients, create a marketing plan, and assign specific team members to reach out to each potential client.

When implemented correctly, MBO can be a powerful tool for organizations as it enables them to focus on results and performance rather than activities. This, in turn, helps organizations to become more efficient and productive. However, implementing MBO correctly is not always easy, and it is important to understand the concept and its application for it to be successful.

Monitoring progress

Once the plan is in place, it is important to monitor progress and evaluate outcomes. This includes tracking progress against the goals and objectives, as well as reviewing outcomes. It is important to continually adjust the plan if necessary, in order to ensure that it is still realistic and achievable.

Allow for adjustments to be made if necessary and provide an opportunity to celebrate successes. For example, the sales team may hold weekly meetings to review progress and identify any roadblocks.

Finally, employees should be rewarded for achieving their objectives. Rewards can take many forms, such as bonuses, promotions, or recognition. The key is to provide meaningful incentives that motivate employees to work toward achieving their objectives.

Example of how MBO can be applied in the real world

To give an example of how MBO can be applied in the real world, let’s look at the case of a small business. In this scenario, the business owner has set a goal for the business to increase its profits by 10% in the next 12 months. To achieve this goal, the owner has broken it down into smaller objectives, such as increasing the number of customers, improving customer service, and increasing the marketing budget.

The business owner is then tracking and measuring the progress of each of these objectives. For example, the owner is tracking the number of customers by using customer surveys, the quality of customer service by using customer feedback forms, and the marketing budget by tracking the number of leads generated. Tracking and measuring the progress of each objective ensures that the desired goal is being met.


MBO can be a powerful tool when it comes to setting and achieving goals. It provides a clear structure to help ensure that objectives are met on time and as expected. Furthermore, it helps to create a sense of purpose and a sense of shared goal. It also help to motivate employees and teams to work harder. This is why many businesses use MBO to help set and achieve their goals.

It is important to understand MBO concept and its application in order to get the most out of it. Clear, measurable objectives and a plan of action can ensure all employees are working towards the same goals and objectives. With the right implementation, MBO can be a powerful tool for achieving organizational success.

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  • Ram

    Ram, the author of "Business Development: Perspectives" on Amazon Kindle, has a wealth of experience in business development across multiple industries. He has over 30 years of experience in commodities, FMCG, and software industries, and has held various leadership positions in these sectors. In the commodities and FMCG industries, Ram served as GM of Business Development for southern India, where he successfully established new businesses and expanded existing ones. In the software industry, he was Regional Director of Business Development for Asia, where he was responsible for expanding the company's presence in the region. Ram has a proven track record of turning around loss-making ventures and establishing successful businesses. Ram has also served as the Director of Industry Partnerships and IT Blog editor at a software company, showcasing his expertise in technology and industry partnerships.

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