Society For Human Resource Management (SHRM) Certified Professional Practice Exam

Which of the following is NOT a step in the MBO process?

1. Monitor performance

2. Reward the performer

3. Review competitors

4. Set goals

The correct answer is: Review competitors

The MBO (Management by Objectives) process is primarily focused on aligning an organization’s goals with employee performance. In this framework, several critical steps guide the process: 1. **Set goals**: This initial step involves defining specific, measurable objectives that are aligned with the overall strategic goals of the organization. The emphasis is on clarity and mutual agreement between management and employees on what the expectations are. 2. **Monitor performance**: Once the goals are set, continuous monitoring of employee performance against these goals is essential. This step ensures that employees are on track and allows for any necessary adjustments to be made along the way. 3. **Reward the performer**: After evaluating performance, recognizing and rewarding achievements is crucial. This serves as motivation for employees and reinforces the importance of meeting the objectives set in the earlier stages. While understanding competitors might be relevant for overall business strategy and can influence goal setting, it does not directly constitute a step in the MBO process itself. Instead, the MBO framework is internally focused on performance management and goal achievement, making the inclusion of competitor analysis outside the primary steps of MBO.