Correct Answer:
A. Setting mutually agreed goals between manager and employee
Management by Objectives (MBO) is a strategic management model that aims to improve organizational performance by clearly defining objectives that are agreed upon by both management and employees. The core principle of MBO is setting mutually agreed goals between manager and employee. This collaborative process ensures that employees understand what is expected of them, align their efforts with organizational goals, and feel committed to achieving those objectives. Goals are typically specific, measurable, achievable, relevant, and time-bound (SMART).
- Observing employees secretly is a surveillance tactic and not part of the MBO philosophy, which emphasizes transparency and collaboration.
- Comparing employees against each other is more characteristic of forced ranking systems, whereas MBO focuses on individual goal attainment and development.
- Focusing only on past mistakes is a reactive approach; MBO is proactive and forward-looking, concentrating on future goals and continuous improvement.