Certified Human Resource Professional (CHRP) Practice Exam

Which of the following is part of the management by objectives approach to performance management?

1. Assessing competency achievement.

2. Using critical incidents to define performance expectations.

3. Establishing SMART goals.

4. Developing behaviourally anchored rating scales.

The correct answer is: Establishing SMART goals.

The management by objectives (MBO) approach is fundamentally built on the concept of setting clear, measurable objectives that employees strive to achieve within a defined timeframe. Establishing SMART goals aligns closely with this philosophy and is an integral part of the process. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound, ensuring that goals are not only clearly defined but also realistic and trackable. By encouraging the establishment of SMART goals, MBO provides a structured framework for both employees and managers to understand expectations and assess progress. This enhances accountability and motivation, as employees are aware of their objectives and can see how their performance contributes to larger organizational goals. It fosters a collaborative environment where managers and employees can work together to define objectives that drive performance and progress. In contrast, while assessing competency achievement, using critical incidents, and developing behaviorally anchored rating scales are all valid aspects of performance management and evaluation, they do not specifically pertain to the core function of management by objectives as focused on the mutual agreement and pursuit of established objectives. Thus, the emphasis on SMART goals highlights the essence of the MBO method.