Small Business Glossary and Definitions

Management by Objective (MBO) is a management model where an organization defines its performance objectives in a step-by-step process with the goal of motivating employees to higher performance. In the MBO model, the staff members have a voice in developing the objectives, making the success of the organization a mutual goal for employees and employers.

By breaking down performance into a series of steps, employees have a clear understanding of the process and manageable performance goals at each phase of work. Developing metrics that measure success and accomplishment also serve to motivate employees to higher performance levels.