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Management by Objectives (MBO)

A goal-focused performance management method that sets clear, measurable objectives and judges performance by how well results align with project outcomes.

Key Points

  • Objectives are jointly agreed and cascaded from organizational strategy to project and individual goals.
  • Goals should be specific, measurable, achievable, relevant, and time-bound, with success criteria defined upfront.
  • Performance is reviewed by comparing actual results to the agreed objectives and the project's outcomes.
  • Requires regular feedback and the ability to adapt goals as project priorities evolve.

Example

In a software release project, the project manager and team lead agree on objectives: reduce average cycle time by 20% and achieve a 95% automated regression pass rate by the end of the release. Team performance is evaluated against these targets and the quality of delivered features.

PMP Example Question

Which approach focuses on setting measurable goals and assessing team performance based on achievement of project-related results?

  1. Management by Objectives (MBO)
  2. Management by Walking Around (MBWA)
  3. Earned Value Management (EVM)
  4. Delphi Technique

Correct Answer: A — Management by Objectives

Explanation: MBO emphasizes agreed, measurable objectives and evaluates performance by how well those goals tied to project outcomes are met.

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