Final answer:
Management by Objectives (MBO) is a systematic performance appraisal method where specific goals are set with employees, then their performance is reviewed against these goals periodically, with performance appraisals often documented several times a year.
Step-by-step explanation:
Management by Objectives (MBO) is a performance appraisal method that involves setting specific measurable goals with each employee and then reviewing the performance periodically to assess how well the employee has achieved these goals.
In this approach, goals are typically agreed upon between the employee and their supervisor, ensuring that organizational goals are aligned with the employees' and contributing to the overall mission of the organization.
Performance appraisals, as part of an MBO system, are documented typically several times a year, with an emphasis on a formal process at least annually which may be accompanied by a face-to-face meeting to communicate performance feedback directly.
The MBO process is designed to improve performance by clarifying responsibilities, prioritizing objectives, and setting a timeline for deliverables.
It provides an opportunity for supervisors to reinforce positive performance elements and discuss potential rewards for goal attainment, such as pay increases, or consequences for underperformance.
Moreover, the appraisal process ideally contributes to identifying areas where an employee requires further training, thereby advancing their competence and ability to contribute to the organization.
However, the suitability and impact of performance appraisals, including MBO, can vary widely based on its alignment with the organization's culture and the effectiveness in which it is implemented.