When assessing organizational performance, which approach involves both managers and employees in goal setting?

The approach that involves both managers and employees in goal setting is Management by Objectives (MBO). This method aligns the goals of individuals with the overall objectives of the organization, promoting collaboration and engagement. In MBO, managers work with employees to define specific, measurable goals that contribute to the organization’s success, ensuring that everyone has a clear understanding of their roles and responsibilities. This collaboration not only enhances motivation and ownership among employees but also fosters communication and feedback between employees and managers throughout the process.

MBO is distinct from approaches like traditional evaluation or top-down management, where goals might be set unilaterally by managers without employee input. By incorporating the perspectives of both parties, MBO creates a more inclusive environment that can lead to improved performance and job satisfaction. Furthermore, peer review focuses on feedback from colleagues rather than establishing shared goals, which is central to the MBO process. Thus, MBO stands out as the approach that effectively integrates both managers and employees in the goal-setting process.