Chapter 08: Performance Management
135. Describe the management by objectives (MBO) approach and explain how it overcomes the limitations of results-
based reviews.
In an MBO, employees establish objectives (such as production costs, sales per product, quality standards, and
profits) by consulting with their managers and are then evaluated based on meeting those objectives. An MBO
system consists of a cycle that begins with setting the organization’s common goals and objectives and
ultimately returns to that step. The system acts as a goal-setting process whereby objectives are established for
the organization (Step 1), departments (Step 2), and individual managers and employees (Step 3). Employees
help establish specific goals, but those goals are based on a broad statement of an employee’s responsibilities
prepared by the person’s supervisor. The employee-established goals are then discussed with the supervisor
and jointly reviewed and modified until both parties are satisfied with them (Step 4). The goal statements are
accompanied by a detailed account of the actions the employee proposes to take to reach the goals and how
they will be measured (the metrics). During periodic reviews, the progress the employee makes toward the
goals is then assessed (Step 5). The goals and metrics may be changed at this time as new or additional
information is received. After a period of time, the employee does a self-evaluation and documents what he or
she has accomplished. The person and his or her manager then jointly review and discuss the self-evaluation
(Step 6). The final step (Step 7) is reviewing the connection between the employee’s performance and the
organization’s.
136. Explain the different types of performance evaluation meetings and feedback sessions.
There are three basic types of formats for providing feedback during a performance evaluation meeting or
feedback session: tell-and-sell, tell-and-listen, and problem-solving.
1. Tell-and-Sell. The skills required in the tell-and-sell format include the ability to persuade an
employee to change his or her behavior in a certain way. This may require the development of new
behaviors on the part of the employee and skillful use of motivational incentives on the part of the
appraiser/supervisor. But because there is less communication on the part of the employee, this format
is less than ideal. However, it may be used if other formats haven’t worked, the employee is resistant
to change, or the employee is reluctant to participate in the discussion.
2. Tell-and-Listen. In the tell-and-listen format, the appraiser or supervisor communicates the strong and
weak points of an employee’s job performance during the first part of the session. During the second
part of the session, the employee’s feelings about the evaluation are thoroughly explored. The tell-
and-listen method gives both managers and employees the opportunity to release and iron out
any frustrating feelings they might have.