Final answer:
The key component of the management by objectives approach to performance management is the establishment of SMART goals, which are Specific, Measurable, Achievable, Relevant, and Time-bound.
Step-by-step explanation:
The management by objectives (MBO) approach to performance management involves a few key components, one of which is the establishment of SMART goals. The term SMART is an acronym that stands for Specific, Measurable, Achievable, Relevant, and Time-bound, all of which are attributes that goals should have to be effective. Employees and managers work together to identify and establish goals that are Specific (clear and detailed), Measurable (with criteria for measuring progress), Achievable (attainable), Relevant (aligned with the company's objectives), and Time-bound (with a deadline).
So, when looking at the options provided:
- Assessing competency achievement is not specific to MBO, although it may be involved in any performance management system.
- Using critical incidents to define performance expectations does not align directly with the core principles of MBO.
- Establishing SMART goals is a key part of the MBO approach and, therefore, the correct answer.
- Developing behaviorally anchored rating scales is another method of performance assessment, but not peculiar to the MBO approach.
Therefore, the part of the management by objectives approach to performance management is c) Establishing SMART goals.