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Ask HR: What is MBO?

Management by Objectives (MBO) was first popularised by Peter Drucker in his 1954 book The Practice of Management.

Though it’s dated way back in the 1950's, the practice of setting goals & focusing on achieving them has been the primary focus for most successful MBO practicing companies.

The interesting element of Drucker’s MBO principle is to ensure stringent management practices that enables a continuum of clearly assigned & cascaded goals top down to every single employee in the organisation. The idea is to focus on the actual performance results vs the activities involved.

As the year draws to a close in several weeks, it’s imperative that the management starts training & aligning their teams with setting new goals for the coming year.

Goals set must be SMART, i.e., Simple, Measurable, Attainable, Relevant & Time bound. Management must ultimately focus on the below 5W/1H model to put MBO into practice: 1. What are your company's 2021 Strategic Objectives (SO)? 2. When are these SO's to be achieved? 3. Why are these SO's important to your company's vision & mission? 4. Where can you get resources, budget & tools to ensure you achieve those set targets? 5. Who (RACI) are the individuals responsible & accountable for each SO & others who will be consulted & informed of the progress? 6. How will you measure success for the goals set?

Coming out with an MBO for your company is an important investment of time & energy, but in the end, it helps align your entire organisation to stay focused on deliverables.

To learn more about MBO, Goal Setting & KPI, email your inquiries to:


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