Management by Objective (MBO) is a management system that is oriented

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Management by Objective (MBO) is a management system that is oriented

Management by Objective MBO is a management system that is oriented

Management by Objective or Mbo is a method of companies believed to be able to increase employee motivation in terms of work. Because, this one strategy will be more results-oriented, not in the process. So, every company’s activities must be able to fit the target set.

Then, why is MBO able to increase employee motivation, how is the process of applying in the business world? Well, so you don’t need to be confused anymore, then here we provide complete information for you.

Understanding Management by Objective

In the world of work, very many employees feel they are no longer in line with the company. Also, the opposite, many companies feel that some employees are not in line with their vision. The suitability between the company and employees is a very crucial thing.

To avoid the negative thing, you can use a strategy called Management by Objective.

Reporting from the Hrzone page, Management by Objectives or MBO is a process carried out within the company so that every employee behavior will be able to be in harmony with the company’s goals.

Whereas if we quote from the Workfront page, Management by Objectives is a process that determines the company’s main objectives and also uses it to design the objectivity of each company.

This process must be carried out by each manager and also employees in a company. These two parties have the opportunity to be able to discuss objectives and objects that must be needed. In the end, this strategy will be more oriented to something that can be produced by the team, employees, and companies.

The benefits of implementing management by objectives

Simply put, Management by Objectives is carried out so that it can compare the performance and achievement of employees with the targets contained in the company. With the presence of this comparison, employees can measure the extent to which they have to improve their abilities.

This form of improvement should not be done forced. Because the entire objectivity specified must be based on the results of the discussion between the employees and the manager. So, later employee motivation will increase automatically.

Advantages of Management by Objectives

Quoted from the Corporate Finance Institute page, there are several advantages and disadvantages of the MBO which you have to consider. The following are the advantages of Management by Objectives:

1. Mbo is a more results-oriented process

Mbo is a process system that is more results-oriented to the results and focuses on determination and also control of the objectives so that it will encourage the manager in carrying out more detailed planning

2. Managers and employees must know their roles

Every employee and manager in the company must understand their respective roles so that later there will be no ambiguity or certain confusion.

3. The manager must be able to set a more measurable target

The manager must be able to set targets, priorities, and more measurable performance standards. In addition, responsibility and personnel authority must also be determined.

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4. Making individuals more aware of organizational goals

Generally, what often happens is that employees only care about the goals and the surrounding environment. But by implementing Management by Objectives, they will be very proud because they have been directly involved in the company’s goals. Later, this will be able to increase morale and employee commitment.

5. Mbo often highlights career development areas

Management by Objectives Very often highlights areas where each employee requires further training and leads to the development of his career.

6. Periodic Evaluation System

Periodic evaluation systems contained in Management by Objectives will allow each employee to find out how well they are in terms of doing their work. Because, Mbo will indeed provide a strong emphasis on the aim of being measured, and the assessment carried out will also be more specific, objective, and fair.

7. Improve communication

In Management, by Objectives, You must be able to improve communication between management and employees.

Management Loss by Objectives

In addition to the seven advantages above, Management by Objectives also has advantages, including the following.

1. Must be supported by top management

As one of the concepts of management, the MBO can only succeed if it has full support from the top management, the Founder, or the company owner.


2. Mbo is not liked by employees

Most employees do not like this management system, because it will demand that they are under pressure to associate with the management when the determination and destination that is determined is very high, so it is no longer realistic.

Later, this can reduce employee capital and cause suspicion. They will assume that Management by Objectives is one way for company management to be able to work harder and provide more dedication.

The emphasis contained in the Management System by Objectives is on the qualifications and targets intended. This will not leave the subjective base, because several areas are difficult to give assessments, and even more difficult to evaluate.

3. Confiscate a lot of time

Management by Objectives demands that more frequent meetings and reports that add responsibility and managers will be higher. Maybe some managers don’t like this system.

Elements in Management by Objectives (MBO)

As one of the management systems, of course, Management by Objectives has various elements attached to themselves. Various elements that are always in the Management System by Objectives are as follows:

1. Commitment to the program

An effective Management By Objectives program will provide the terms of commitment to managers at every level of the organization to the achievement of various personal and organizational goals and also the Management By Objectives process. It will be necessary for a lot of time and energy to create a successful Objectives Management program.

2. Determination of Puncak Management Goals

Effective planning programs can generally begin with the role of the top manager, which is in charge of setting various preliminary purposes after consulting with each member of other organizations.

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The aim must be expressed in the form or with certain terms that can be measured. By using this method, then the manager and also subordinates will have a clearer idea related to what is expected by top management to be achieved, and they can also monitor direct relations of their work by achieving the company’s goals.

3. Individual goals

In making an effective Management By Objectives program, the purpose of determining the goal at each level is to help each employee clearly understand what they hope can be achieved.

The aim of each of these individuals must be determined by conducting consultations between individual parties and also their superiors. This joint consultation will help the manager in developing a more realistic goal and will help subordinates in expanding their view.

4. Participation

The degree of subordinate participation in terms of setting goals is very diverse. On one extreme side, the possibility of subordinates participates only with their presence when the goal can be determined by the management.

On other extreme sides, manager subordinates may be very free to set their own goals and methods in achieving. However, these two extremes tend to be ineffective. As a general guideline, the higher the level of mutual participation between the managers and subordinates, the more purpose will be achieved.

5. Autonomy in Implementation of Plans

After completing the goal and has been approved, then the individual has the freedom in terms of choosing equipment to achieve its objectives.

With the existence of normal limits of organizational wisdom, then the manager must be freer in developing and also implementing various programs of achieving their respective goals without having to intervene.

6. Achievement review

Managers and subordinates must hold periodic meetings to be able to review progress against its purpose.

During this review process, they will decide whether there are some problems. If there is, then what they can do to be able to solve it. Nila is needed, what goals can be changed.


So, Management by Objectives is a company management system carried out based on goals that have been agreed upon by managers and employees. This strategy has an advantage, one of which is to increase the enthusiasm and motivation of each employee.

One more thing to remember by a company besides Management by Objectives is financial management. This is very important because it will greatly determine the company’s financial health conditions.

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