Management By Objectives (MBO) is another method of assigning bonuses, tied to goals that are set at an individual or team level for the employee. On paper this sounds better because you articulate what the team needs to do, and then the team members or individual get paid more if they do it. Yet I’ve seen companies burn so many calories trying to figure out what these MBOs should be! Sometimes it takes so long to set the MBOs that by the time they’re set, they’re irrelevant or wrong. Then employees are focused on achieving the goals versus doing what’s right.
