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Human Resource Management – What is to be achieved - Management by Objectives

The MBO exercise entails defining “What” is to be achieved i.e. the Key Performance Areas (KPA). This refers to the core areas of delivery for which an individual is responsible in his role. For example, achievement of sales targets, agent recruitment and team building etc. Every employee is expected is expected to have some KPA’s pre-defined to bring about variety in his role.

Measure of Success

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It is the performance yard-stick to assess if the performance is on track or off track. This could be a quantitative measure like percentage, numbers, days, currency etc. or a qualitative measure like feedback.


It refers to the weight assigned to a particular Key Performance Area (KPA) in the MBO sheet. A higher weightage on a KPA signifies the relative importance of that KPA vis-à-vis other KPAs with lower weightage.

Types of Targets

A critical step towards detailed & transparent expectation setting is accomplished by agreeing upon 3 types of targets against each KPA-

  • Threshold Target: conveys the minimum performance expectation
  • Normal Target: defines the standard performance expectations for the position.
  • Stretch Target: incorporates progressive elements of “stretch” to increase the challenge of the role, yet still achievable when delivering personal best. While the normal targets do bear a degree of “challenge”, the “stretch” targets bear significantly higher levels of performance expectation than Normal Target.

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