HR Terminology Management by Objectives (MBO)

Complygate has put together a complete list of key HR terms, phrases, acronyms and jargon to assist HR professionals in navigating the extensive, ever-growing HR terminology. We would like to encourage you to read, share and make use of this terminology collection. If you have any suggestions of terms or keywords we have missed, please contact us and we will include them in our next update.

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What is management by objectives (MBO)?

Management by Objectives (MBO) is a strategic method to increase the performance of a business. This is a process completed by clearly and evidently stating the goals and objectives that are discussed and agreed between the management and employees.

Stated in a theory, when employees have their say in goals and objectives for the business boosts their motivation and commitment towards the organisation.

Benefits of management by objectives:


  • Employees will feel more motivated and feel more part of the organisation, this means that they will take more pride in their work. Allowing positive outcomes for the business.
  • It helps the organisation build a relationship between the employees and managers as they will be communicating with each other.
  • Management builds goals for the business to make it successful.

Drawbacks of management by objectives:


  • The goals can put pressure on the employees to complete the goals at a certain time.
  • The management by objective focus of the goals to make the business successful, they forget about the health of the employees, culture of the business etc.
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