Peter Drucker coined the term Management by Objectives (MBO) in his book, “ The Practice of Management”. Management By Objectives (MBO) is a concept in human resource management that aims at the establishment of a management information system to measure actual performance against defined objectives. The merits of MBO are that it improves employee moral and employee commitment to work, and builds a better communication between management and employees. The MBO theory suggests that having a say in employee goal setting, will ensure better participation and commitment from employees. It was coined in 1954.