What method involves evaluating an employee against mutually set goals?

The method that involves evaluating an employee against mutually set goals is Management by Objectives (MBO). This approach focuses on the collaborative goal-setting process between managers and employees, allowing for clear, specific objectives to be defined. Employees are assessed based on how well they achieve these agreed-upon objectives, creating a sense of ownership over their performance and alignment with organizational goals.

In MBO, both the employee and manager participate in establishing measurable criteria for success, ensuring that expectations are clearly communicated. This method promotes accountability and motivation, as employees can see the direct impact of their work on achieving group and company outcomes. By regularly reviewing progress toward these objectives, the MBO process also facilitates ongoing feedback and adjustments, contributing to both personal and organizational development.