The challenge of the burgeoning complexity of administering mental health programs calls for increasingly sophisticated management strategies. Management by objectives is an administrative tool that may assist mental health managers in meeting administrative needs as well as service demands in a more efficient fashion. Management by objective is based on the principles of (a) stating objectives in measurable terms, (b) staff participation in decision making, and (c) performance-based rewards. This paper describes results of a pilot management-by-objective project applied to an outpatient service in a community mental health center.