In a Management By Object process, below are the typical steps as considered by managers.
1. Manager does the much needed thinking process of setting the goals frame work for his subordinate.
2. In a formal discussion, the goals are conveyed to subordinate and if needed changes are made.
After this real world managers tend to stop and expect the subordinate to achieve the goals. However it is important for the subordinate to know, will achieving these goals help him in achieving certain change, increment, change in designation and so on..
Imagine expecting a dog to jump without showing a biscuit, why will it do? all of us know this simple fact about dog that unless biscuit ( reward) is shown, it will not exhibit any desired action. Why does the managers expect otherwise scenario when it comes to there subordinates..
Subordinate understands that he has to achieve these goals by end of the year, good, but why? its a blank and leaving such an important answer unattended will not lead to a successful MBO process.
When we are talking about MBO process, I assume, hygiene factors are met for subordinate, otherwise it does not make sense for manager to setup far reaching goals with subordinate, as without hygiene factors likely the employee will not be with the organization for a long enough time to plan a MBO with him... But consider when manager has set up goals without rewards and unfortunately the subordinate is unhappy with one of the motivation factors, worst ever case for a MBO process. At the first place, rewards are not linked to goals leaving little hopes to the subordinate about achieving those goals and upon that he is not seeing required motivation in his current role, why would he perform? and a big failure of the complete MBO process..
Hence a real world manager must and should speak about rewards in the very next point after stating the goals. Even better is provoke the subordinate, create salivation effect by stating the rewards first and then state the goals....