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The Impact of Management by Objectives on Employee Behaviour and Performance

The present research is aimed at exploring the impact of management by objectives (MBO) on employee behaviour and performance. To fulfil the objective of the present research, a review of the available literature was conducted. Management by Objectives is one of the most recent performance appraisal techniques managers apply to assess the performance of their employees. The goal setting process can be carried out by managers in collaboration with employees. This contributes to the motivation of the employees and to the effect. In addition, feedback is an important part of the MBO process. Above all, goals have a positive and significant influence on the behavior and performance of employees. A systematic literature search is used. The researcher approaches MBO as an independent variable; Employee behavior and performance as dependent variables; and the relationship between them all, as shown in previous research. Also the correlation among the variables is based on a meta-analysis. Findings show that MBO process creates a state of employee motivation, satisfaction, commitment, loyalty which show the behaviour of the employees. This in turn leads to improving the performance of the employees. Also, the goal set must be realistic, acceptable and relate to the functions of the organization. Furthermore, feedback is an important part of the MBO process which plays great roles in making the employees feel they are valued and what they do is appreciated. This also contributes to enhancing employees' performance. When employees receive feedback on their performance, their behavior improves.