What is Management by Objective?

The process of setting objectives in the organization to give a sense of direction to the employees is called as Management by Objectives.

Management by Objectives; a system that seeks to align employees' goals with the goals of the organization. This ensures that everyone is clear about what they should be doing, and how that is beneficial to the whole organization. It's quite easy to see why this type of managing makes sense – when the parts work in unison the whole works smoothly too. And by focusing on what you're trying to achieve, you can quickly discriminate between tasks that must be completed, and those that are just a waste of valuable time.

Some of the important features and advantages of MBO are:

  1. Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment. This increases employee job satisfaction and commitment.
  2. Better communication and coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the organization and also to solve many problems.
  3. Clarity of goals
  4. Subordinates tend to have a higher commitment to objectives they set for themselves than those imposed on them by another person.
  5. Managers can ensure that objectives of the subordinates are linked to the organization's objectives.