{"id":11878,"date":"2019-03-19T15:36:55","date_gmt":"2019-03-19T14:36:55","guid":{"rendered":"https:\/\/www.small-improvements.com\/?p=11878"},"modified":"2019-03-19T15:36:55","modified_gmt":"2019-03-19T14:36:55","slug":"okrs-vs-employee-goals","status":"publish","type":"post","link":"https:\/\/www.small-improvements.com\/blog\/okrs-vs-employee-goals\/","title":{"rendered":"What HR needs to know about OKRs and employee goals"},"content":{"rendered":"

The hype around OKRs, a goal-setting framework that originates in the Silicon Valley tech scene, continues to grow. I\u2019m personally a big fan of the framework, but there seem to be many misconceptions among executives and HR professionals about how OKRs fit into employee goals and performance reviews<\/a>.<\/p>\n

I learned a lot about the framework\u2019s pitfalls and success factors at Perdoo, a pioneer in the OKR software and coaching market. Now that I\u2019m with Small Improvements, where goal setting is part of our ongoing performance management tool<\/a>, the topic still comes up a lot. And it bugs me.<\/p>\n

Having seen both sides, I believe that organizations should draw a clear line between OKRs and employee performance management.<\/p>\n

What are OKRs?<\/h2>\n

The concept of OKRs (objectives and key results) is a set of best practices for setting, sharing, and tracking goals in ambitious organizations. As the first company that used OKRs after Andy Grove invented it at Intel, Google revealed how they adopted it in Rick Klau\u2019s 2013 video How Google sets goals<\/a>. This became the foundation for what we mean when we say OKRs. But due to the open-source nature of the OKR framework, approaches vary.<\/p>\n

The focused organization<\/h3>\n

Organizations use OKRs to communicate clear priorities, maintain alignment across teams, and stay focused on what makes the biggest impact. They typically set three to five objectives <\/span>every year<\/span><\/i>, each with about three key results. Teams do the same <\/span>every quarter<\/span><\/i> to support those top-level OKRs. Each OKR consists of an inspiring statement (objective) and multiple outcomes that measure its success (key results).<\/span><\/p>\n

Radical, not incremental, change<\/h3>\n

It\u2019s recommended to keep business as usual out of your OKRs because you want to focus on meaningful change in the foreseeable future. Standard procedures and maintenance work still get done, they are just not reflected in your OKRs. Many organizations use stretch goals to push for big achievements, so getting to 70% progress usually counts as a good result. To encourage ambitious targets and avoid<\/span> sandbagging<\/span><\/a>, all major OKR experts recommend decoupling OKR completion from compensation and bonuses.<\/span><\/p>\n

Tip: If your organization doesn’t use the framework yet, check out our article on the potential downsides of OKRs<\/a>.<\/em><\/p>\n

The case against individual OKRs<\/h2>\n

In addition to company and team OKRs, some organizations have employee OKRs as well. There are, however, many reasons for not having them. The most common issues I’ve seen are added complexity and less autonomy for individuals as well as blurred lines between business outcomes, tasks, and personal development.<\/p>\n

Spotify\u2019s HR team, for instance, reported<\/a> that OKRs only work well for them on a corporate level. As a fast-moving company, they could no longer afford to have individual OKRs slow them down without adding value. So they abandoned them and established a take on individual objectives that allows for agility and autonomy:<\/p>\n

\u201cIndividuals\u2019 objectives are set to make sense independent of the changes in direction our business takes. This way our individuals can focus on making the business work, instead of on making the OKR process work.\u201d<\/i><\/p><\/blockquote>\n

Even Rick Klau, the man behind the famous Google video where he still promoted individual OKRs,<\/i> later recommended in a tweet<\/a>:<\/p>\n

“Skip individual OKRs altogether. Especially for younger, smaller companies. They’re redundant. Focus on company and team-level OKRs.”<\/em><\/p><\/blockquote>\n

Without the individual level, OKRs become less useful and relevant for employee evaluations. And that\u2019s a good thing. After all, the employee\u2019s contribution to short-term team objectives is only one of many criteria to assess performance.<\/p>\n

How employee goals are different from OKRs<\/h2>\n

Goals and objectives have a long tradition in performance management. On an individual level, goals can make evaluations fairer<\/a>, set expectations, create accountability, and emphasize personal development. So their purpose is very different from OKRs.<\/p>\n

\u201cOKRs are not synonymous with employee evaluations. OKRs are about the company\u2019s goals,\u201d explains Rick Klau<\/a>. \u201cPerformance evaluations \u2013 which are entirely about evaluating how an employee performed in a given period \u2013 should be independent from their OKRs.\u201d And Perdoo CEO Henrik-Jan van der Pol notes<\/a>: \u201cOKR is about the organization and not about an individual employee and his or her performance.\u201d<\/p>\n

Expectations and accountability<\/h3>\n

You want to hold employees accountable for certain results, regardless of the short-term focus areas you have set for the business. Say your OKRs are about attracting new customers, and retaining customers is not in anyone\u2019s OKR. Wouldn\u2019t you still expect certain people look after existing customers? Don\u2019t limit yourself by your OKRs \u2013 they are only part of what\u2019s going on in your organization.<\/p>\n

Performance<\/h3>\n

Individuals\u2019 performance goals are often about things they do or contribute rather than outcomes they generate. Good OKRs always measure outcomes, but most real<\/i> outcomes \u2013 like revenue or customer satisfaction \u2013 are a joint effort. So if you want to assess someone\u2019s performance based on goals they are solely responsible for, set them independently.<\/p>\n

[cs_gb id=12062]<\/p>\n

Learning and development<\/h3>\n

Setting personal development goals is pretty much mandatory in organizations where learning and development is a priority. But an employee who wants to learn something new will most likely not have a measurable impact on any current OKR with that skill. Learning is a process. A clear line between OKRs and professional development goals helps you think beyond quarterly or annual timeframes.<\/p>\n

Conclusion<\/h2>\n

How employees contribute to company and team-level OKRs should only be a small consideration in performance reviews. To make the most out of individual goals, employees should set performance and development goals independently. This will prove beneficial for your OKR program and<\/i> your people\u2019s growth. While objectives and key results belong in an OKR spreadsheet<\/a>, on a Confluence page<\/a>, or in a dedicated OKR tool, employee goals are better off in a performance management tool like Small Improvements.<\/p>\n","protected":false},"excerpt":{"rendered":"

There are many misconceptions about how OKRs fit into employee goals and evaluations. Here’s why organizations should draw a clear line between OKRs and employee performance management.<\/p>\n","protected":false},"author":29,"featured_media":12061,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[91],"tags":[],"class_list":["post-11878","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-performance"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.small-improvements.com\/wp-json\/wp\/v2\/posts\/11878","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.small-improvements.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.small-improvements.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.small-improvements.com\/wp-json\/wp\/v2\/users\/29"}],"replies":[{"embeddable":true,"href":"https:\/\/www.small-improvements.com\/wp-json\/wp\/v2\/comments?post=11878"}],"version-history":[{"count":0,"href":"https:\/\/www.small-improvements.com\/wp-json\/wp\/v2\/posts\/11878\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.small-improvements.com\/wp-json\/wp\/v2\/media\/12061"}],"wp:attachment":[{"href":"https:\/\/www.small-improvements.com\/wp-json\/wp\/v2\/media?parent=11878"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.small-improvements.com\/wp-json\/wp\/v2\/categories?post=11878"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.small-improvements.com\/wp-json\/wp\/v2\/tags?post=11878"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}