The days of yearly review are gone. Now leverage continuous performance management to drive engagement, retention, and culture, on a regular basis.
Wouldn’t you agree that the unleashing of the pandemic coupled with the dynamism and uncertainty is pushing businesses to rethink all aspects of their scalability, including performance management?
Invariably, there is a sentiment to move away from the traditional methods focused on annual interventions to invest into something more continuous and regular.
In this article, we will explore the rise of continuous performance management, what it means, its merits, and how you can leverage its unique capabilities.
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Continuous performance management entails focusing on different performance management processes at regular intervals throughout the year, on an ongoing basis. The central focus here is to highlight the importance of a holistic performance management approach, marked by regular check-ins and frequent feedback to facilitate better business results.
Contrary to the traditional performance management approach, which solely focuses on annual interventions and check-ins, continuous performance management advocates the need to connect more frequently to foster a sense of belongingness, engagement, and an enriching experience.
You need to adopt continuous performance management to keep pace with the new employee expectations, changing nature of the businesses, and customer experiences to enable organizations to not only survive but thrive. Organizations today no longer operate in a stable environment. Invariably, goals, timelines, expectations, cannot be set a year in advance and be left to annual interventions as advocated by traditional performance management systems.
The market dynamics, cut-throat competition, and agile business conditions are pushing organizations to constantly reinvent and innovate to ensure business continuity. Therefore, performance management, monitoring, evaluation and realignment, once a year can no longer suffice the changing requirements.
Moreover, continuous performance management, by the virtue of facilitating regular connections, has the potential to foster greater communication and collaboration, which can enable businesses to thrive in a connected world. On the other hand, the traditional annual appraisal approach promotes silos in working, preventing engagement and creation of shared value.
With a firm understanding of the what and the why, let’s understand the key elements that make continuous performance management stand apart. The following four elements ensure that businesses are not stuck with rigid goals and metrics and give them the room to innovate and create value:
In a continuous performance management system, focus on dynamic goal setting with more importance towards near and short term goals. The objective here is to ensure flexibility and continuously reinvent the goals based on business needs and market circumstances. Dynamic goal setting ensures that the goals are regularly validated and updated to create maximum organizational impact.
The next element for continuous performance management is frequent and two-way feedback. There are two facets at play here.
While the traditional approach focuses on a top to bottom feedback, the continuous performance management advocates a bottom up feedback mechanism as well. Thus, the objective is to have a holistic and regular approach to feedback.
While frequent feedback is a more formal intervention, regular check-ins are an integral part of continuous performance management. Regular check-ins seek to address challenges and realign expectations during the course of a task or a project.
Instead of waiting till the end, as advocated by annual performance management, the continuous approach believes that regular check-ins between employees and their managers, amongst co-workers and across the organization lead to better collaboration, greater alignment and collective responsibility.
Continuous performance management requires organizations to introduce the element of self evaluation. Under the traditional approach, the leadership and managers are solely responsible for evaluating the performance of employees.
However, the continuous performance management approach encourages employees to evaluate their performance on a regular basis. The objective is to identify for oneself the challenges as well as the opportunities to contribute to one’s own professional development, and, thereby, further organizational growth.
The final element of the continuous performance approach for our discussion today is constant recognition and appreciation. Continuous performance management provides the opportunity to regularly monitor employee productivity and value creation, and, consequently, reward the top performers.
The idea is to appreciate efforts and good performance in real time — even for smaller wins — rather than wait till the end of the year. This has the potential to act as an incentive for the recipients to feel acknowledged and valued for their contribution as well as for others to improve and get rewarded the next time.
There are several benefits that organizations that have adopted continuous performance management claim to have reaped. Here are the top seven which make the most sense for organizations as well as individuals:
Regular check-ins, frequent feedback, and interventions lead to greater avenues for employees and managers to connect and collaborate. Employees are often more happy and satisfied as opposed to traditional performance management.
According to research, 95% of managers report they are “unhappy” with traditional performance reviews. Therefore, a continuous approach leads to a greater sense of engagement and belongingness. Employees feel a part of a larger vision when they are frequently reminded of the big picture and their contribution to the same.
Continuous performance management seeks to ensure that performance challenges are addressed in real time to augment productivity and impact the bottom line. Statistically speaking, companies adopting continuous performance feedback significantly outperformed competition at a 24% higher rate.
Therefore, continuously evaluating performance and focusing on development can lead to better financial results for the organization.
When they are constantly engaged, appreciated and included, employees’ commitment and dedication towards the organization increases. Invariably, this reduces the voluntary turnover rate and promotes greater retention.
Furthermore, when employees stay longer it creates a positive employer branding facilitating attraction of top talent, as well as building a strong succession pipeline.
Frequent check-ins and interventions not only augment engagement but also facilitate greater connectedness. Connecting and collaborating to review performance and improve it ensures that employees know more about one another, are able to build authentic relationships, and the workplace dons a more human and impactful cultural fabric.
Under the traditional performance management system, employees and managers wait till the end of the year to voice their concerns about what’s not working well, which invariably is quite late, especially in the fast paced world today. The team members of managers who provide weekly feedback instead of annual are 5.2 times more likely to strongly agree that they receive meaningful feedback. Continuous performance management enables real time feedback and improvement to ensure that only the most effective and efficient practices and processes are followed.
Continuous performance management pushes employees to work hard and give in their best all year long and not just on the days closer to the annual review. Globoforce research shows that 51% of employees believe that annual reviews are inaccurate, and 53% say it does not motivate them. Whereas, a continuous approach promotes a sense of responsibility to perform well everyday and each day counts. Invariably, this leads to a culture where high levels of performance becomes a norm.
Finally, organizations which adopt continuous performance management are agile and resilient. They are capable of reinventing their goals, processes and practices, and adapt to any changing circumstances. This agility and resilience is critical for business continuity and maintaining a competitive edge.
Despite the remarkable benefits and advantages, organizations are apprehensive and reluctant about adopting a continuous performance management approach. There are three major reasons behind such reluctance, including:
Continuous performance management requires greater efforts and interventions on the part of the managers and leaders. They often see it as an additional burden and shirk away from this responsibility as they are unable to see the immediate merits for themselves as well as for the organization.
It is important to create the right case and explain to them how in the long run, continuous performance management can create a seamless high performance journey.
It is true that frequent interventions and continuous management requires a greater time commitment than annual reviews. This is, thus, seen as a roadblock where organizations feel it is a waste of time.
However, it is important to undertake a cost benefit analysis to understand how continuous performance management holds the key to various tangible and intangible benefits mentioned above, which would require additional resources and commitment if a continuous approach is not adopted. Using a continuous performance management tool saves 100+ manager hours by automating the entire process.
Finally, many organizations do not have the right tools or are unaware about the right metrics to make sense of the value created by continuous performance. In such a situation, this transformational approach is dismissed as ineffective and not an organizational priority. Here, organizations must partner with the right platforms that can help gauge the results of continuous performance management and translate it into organizational impact.
An understanding of the key elements, benefits and apprehensions of a continuous performance management system leads us straight to comprehending how to facilitate organization-wide implementation for the same. These following six steps can enable organizations to start implementing and reaping benefits of the continuous performance management system:
It is important to start with seeking a buy-in from the leadership as well as the employees. Continuous performance management requires some investment in tools and resources to facilitate regular check-ins and frequent interactions. It also requires a mindset shift and greater effort on the part of managers and employees to connect more frequently and align performance and goals often.
Therefore, the first focus must be on getting everybody in the organization onboard with the idea by illustrating the top benefits both for the organizations (like greater productivity and business continuity) and for the employees and managers (like greater growth and development).
Manager and executive buy-in must be followed by considerable investment and focus on manager training. This involves investing in training to facilitate behavioural change amongst managers to facilitate competencies for coaching and transforming the way they communicate.
Continuous performance management requires a greater degree of communication and collaboration between managers and employees, and, therefore, investment in building leadership, mentorship and coaching skills is instrumental.
Once everyone is onboard with the right skills and competencies, the natural next step is to set goals and OKRs which are dynamic, agile and flexible. A focus on SMART goals can facilitate continuous performance management. Second, the goals must be agile and flexible. This suggests a move away from the traditional rigid goals which leave no room for transformation.
The goals should be aspirational, but at the same time must be dynamic enough to change to keep pace with the changing business conditions. Conditions like the pandemic of 2020 cannot be anticipated a year in advance, and business goals must be flexible enough to be reinvented based on the circumstances in hand.
Based on the goals and OKRs, the next step for effective implementation of a continuous performance management system is to foster a culture of 1:1 conversations between employees and their managers. These regular conversations must have a structure and cadence to ensure they are not missed out.
Such conversations can help eliminate roadblocks by discussing challenges and potential solutions. Connecting regularly also helps to build authentic relationships and breed trust. Finally, this can lead to a greater sense of belongingness, improve engagement, and ultimately boost performance.
Next, organizations must leverage different platforms that help facilitate effective continuous performance management. For instance, SuperBeings enables organizations to measure employee pulse as well as capture the level of performance with daily pulse surveys. Based on the responses, managers can align their outlook and benefit from industry best practices to create a high performance culture.
The objective is to collaborate with tools which can facilitate the process of capturing and analyzing employee data on a regular basis and translate into meaningful insights to manage and improve performance.
Finally, it is important to measure the effectiveness of the continuous performance management system and understand its impact on organizational productivity and bottom line. While some aspects of the process will work well, others will require some work and optimization to achieve the desired goals.
It is also important to gauge the level of adoption and reasons behind low adoption to address the same. Choosing a platform that integrates in the flow of work requiring zero context switching for employees and managers, thus increasing adoption.
Most fast growing organizations agree that steps for implementation coupled with a few best practices form the secret recipe for successful continuous performance management. Let’s look at the top five practices to ensure maximum impact.
The goals must be created collectively. This entails involving employees in the goal and OKR setting process to ensure a sense of commitment and ownership. When employees take part in setting the goals they tend to be more accountable. Furthermore, they have a better understanding of their role in achieving them and what is expected out of them.
Continuous performance management requires a focus on feedback from different stakeholders. This involves managers, subordinates, co-workers, professionals from other departments as well as self evaluation. The idea is to get a holistic picture of the employee’s performance, not just on technical skills and productivity, but on different ways they are able to create value for the organization.
The transition from the traditional annual performance management must be gradual and incremental. Transforming annual reviews to daily reviews in one day will topple the status quo and lead to an overwhelming situation across the organization. Therefore, annual management should be transitioned to quarterly review and interventions and with time, frequency should be increased to make it a continuous effort.
A focus should be on integrating the available technology tools with existing processes to facilitate greater effectiveness and reduce the cost and time to start from scratch. For instance, leveraging platforms like SuperBeings that integrate with Slack or MS Teams can be instrumental in promoting better and regular communication and collaboration between teams. It also helps gauging team pulse and capturing the level of performance regularly to identify areas and ways to improve.
Finally, continuous performance management requires organizations to shift away from the traditional notion of evaluation, which focuses on measuring productivity and organizational impact. Rather, the focus should be on employee development to facilitate the growth and development of the most important organizational asset and resource, the employees. The idea is to align organizational and employee goals and promote a more collaborative approach which entails impact for businesses as well as those who participate to foster its success.
As we draw this discussion to a close, it is evident that continuous performance management is integral for organizations to thrive in the new normal. On one hand, it helps meet the need of the new millennial workforce for most fast growing organizations which expect and demand frequent feedback. On the other hand, it enables businesses to stay agile and resilient to reinvent and innovate and stay relevant with the changing market dynamics.
If you are starting your journey towards continuous performance management platforms like SuperBeings can facilitate a smooth ride. With capabilities to continuously gauge employee pulse and translate it into meaningful insights for better performance and manager development, To build a high performance culture book a demo below.
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The right compensation management practices and policies can make or break your employee experience. Of course, there is merit in linking compensation and performance to drive organizational success, it can lead to several questions and implementation problems as well.
Read on to get all your compensation management related questions answered.
Let’s start with the very basic question of why fair compensation is important and the merits it brings along. It is no surprise that if you are paid more and are compensated according to your efforts, you are likely to give in your 100% and stay with an organization longer. However, there are other factors that support fair compensation:
Thus, fair compensation as a part of compensation linked performance management has the potential to facilitate better employee outcomes such as engagement, experience and performance.
To make compensation fair and inclusive in all aspects, it needs to have a clear foundation. Most organizations have relied on performance reviews as a way of reflecting on performance as a means of compensation decisions. However, there are several competing views both for and against tying compensation to performance reviews.
Clearly, there are both sides to the story.
The most favorable outcome will be to keep performance as one of the parameters for compensation, but not the sole foundation.
Additionally, as one of the best practices, performance reviews can be conducted on a regular basis, where some are only developmental in nature and others can be tied to compensation management.
As discussed, focusing only on performance reviews for compensation management needs a relook. Working with growing organizations, we have curated a list of the top five performance and compensation management practices you can leverage:
Ensure that your compensation structure aligns with the market trends so your employees don’t feel underpaid and leave.
Provide complete transparency and clarity to your employees on what constitutes high levels of performance and what it will take to earn a raise or appraisal.
Have specific, well defined and measurable criteria for the compensation strategy to ensure that there is complete transparency.
Salary in hand or the pay check your employees receive is accompanied by a range of benefits that are a part of the compensation structure and cost to the company, but are often overlooked by employees. Make sure they are widely communicated.
Ensure that there is a base pay range for every role and profile with variable additions based on candidate competencies.
The idea of fair compensation and linking compensation and performance management, leads to a very interesting concept of distributive justice. On a broad level, distributive justice essentially focuses on ensuring that the compensation received by employees is fair and equitable and is based on objective and rational grounds which are uniform for all. Here are a few ways to ensure distributive justice:
Measure potential and market value of the employee in addition to experience and expertise to ensure distributive justice for high potential employees
Another interesting component of compensation and performance management that you must acquaint yourself with is pay transparency. Essentially pay transparency refers to how openly or freely employees within an organization can discuss their compensation with others.
This is not only limited to the check they take home but other perks and benefits they are entitled to. Invariably, many platforms today also enable individuals to anonymously share their salaries online and get insights from others doing the same. However, there are diverse views on when it comes to pay transparency for an organization.
Those who advocate for pay transparency believe that it can enable large scale impact for the organization across performance management.
However, there is a flip side to pay transparency too with some common pitfalls that need to be addressed proactively.
In the last section of this article, we will focus on how managers play an integral role in compensation and performance management and the best practices to guide managers to have effective compensation conversations with their team members.
Almost 58% organizations do not train managers on pay communications
This startling statistic clearly highlights how despite the apparent importance of compensation management, the focus on ensuring a seamless process is rather limited. However, organizations today can play a leading role in enabling their managers to have better pay communication and conversations by following these tips:
It is quite evident that compensation and performance management are intrinsically interlinked and if leveraged well, compensation has great potential to not only drive performance, but also facilitate engagement, retention and much more.
However, to ensure the same, you need to have a very structured, transparent and fair compensation strategy and policy. Furthermore, you must, don’t forget to invest in training your managers to bridge any gaps and constantly gauge and address employee pulse — to ensure fair compensation for all.
Talent development is critical for growing organizations which see the workforce as their biggest asset. Focus on developing their talent stack not only leads to a pleasant employee experience, it also augments the overall performance and productivity for an organization.
While you may come across many ways to facilitate talent development, leveraging the competency framework can help you move the needle very quickly.
Let's see how.
Before moving directly to how you can implement the competency framework, let’s quickly understand the 5 stages of talent development.
The first stage involves planning for your talent needs based on your organizational priorities and creating the position profile based on the skills, attitudes and other competencies.
Based on the position profile, you need to start attracting talent for the position. You can do so by spreading the word in the right networks, through job portal platforms, etc. The objective is to ensure that you are reaching out to the right network. You can also explore the right candidate for the position internally to considerably save hiring and training costs.
Once you have identified the right person, the next stage of talent development is extending the offer to the person after a thorough background check as well as a competency and expectation match. It also requires creating personalized onboarding plans for the first 30-60-90 days of the candidate’s journey within the organization. Read our guide to employee onboarding to learn more about onboarding do’s and don’ts.
The main focus of talent development starts with providing the right development and learning opportunities to your workforce. This can involve upskilling for both technical and soft skills, leadership building or any development intervention based on the need of the role and position.
Finally, talent development involves undertaking initiatives to retain your talent. While learning opportunities are important, facilitating engagement, wellness, motivation, etc. all contribute to employee retention.
If you are wondering how the competency framework aligns with talent development, you need to start by decoding what the framework actually stands for.
Put simply, a competency framework is a set of behaviors, skills, abilities and attributes that an organization considers imperative for creating a high performance culture.
The competency framework can be implemented at all stages of the talent development or the employee lifecycle within an organization. The idea is to ensure that certain core competencies are kept at the heart of the decision making that in any way impact the workforce.
Competency framework based talent development is very important for employee retention. Talent development practices when undertaken effectively have the potential to encourage team members to stay with the organization for long and at the same time become ambassadors to help attract high quality peers.
Here are the top reasons why competency framework based talent development matters:
Now that we have covered the basics of talent development and competency framework, let’s understand how leveraging the latter to advance the former can create a far reaching impact for organizations.
The first step is to create a competency framework which involves identifying the key competencies which will be instrumental in guiding all decisions around talent development. Depending on the nature of your organization, there can be categories within the competency framework that you seek to focus on. Your competency framework should focus on behaviors, skills and attributes which are critical for performance and overall success. The following steps can help you create a competency framework for talent development:
The responsibility of creating the competency framework is collective. It starts with involving the executive leadership to ensure alignment with the vision, people managers to ensure they are ideal for the culture you are trying to build and functional managers to ensure inclusion of right competencies for each role and position. Furthermore, involving those on the ground can be fruitful as they have the best idea of what competencies are critical and others which are good to have.
Once the competency framework for talent development is ready, the next step is to align it with your recruitment process to ensure precise and effective hiring. There are a few steps along the way:
The onus of implementing the competency framework during selection lies primarily with the HR team and recruiters who assess the candidates with different tests and assessments. Team managers and leaders also play a role in assessing functional competencies and fit.
Irrespective of whether an employee is onboarded before or after you have implemented the competency framework for recruitment, you need to ensure competency based performance management and development opportunities.
From a talent development perspective, the focus of the competency framework should equally be on developing employees for their next or subsequent role based on the specific competencies for the same.
The onus of aligning performance and development with the competency framework lies with team managers as they are best able to determine the performance gaps. Furthermore, employees with their managers can identify competency gaps for better performance and focus on the right learning and development interventions to bridge the same.
Finally, the competency framework must also impact the subsequent rungs of talent development where an employee moves up the ladder from one position to the next. Based on the organizational matrix and competencies for each level, you need to identify key attributes that differentiate one level from another and ensure the same is communicated to your employees.
In a nutshell, it is quite evident that the competency framework can inform and advance every stage of talent development for fast growing organizations. If you implement such a framework across the employee lifecycle, you will significantly reduce your chances of a wrong hire and will be able to nurture a workforce that aligns on the vision, goals and overall organizational culture.
A clear competency based talent development approach can help you achieve high levels of performance which is observable and measurable.
While most people managers are able to create a business case for setting OKRs as well as for the adoption of an OKR software by leveraging industry benchmarks and best practices, there is a need to explicitly decode the return on investment of using an OKR tool as well.
Unless they are able to clearly illustrate how the return achieved using a goal management software is greater than the investment, it becomes difficult to sustain the adoption and get long-term leadership buy-in.
Continue reading to strengthen your business case on the same.
Let’s quickly understand how the OKR framework is integral for an organization, especially high growth companies. Most fast growing organizations have competing priorities they need to focus on with limited resources at hand.
Therefore, simply setting goals by adopting a top-down approach without supporting parameters can lead to confusion and incompetence. OKRs help drive away this ambiguity by linking measurable key results for each objective and facilitating a collaborative approach to achieving goals.
Here are the top three benefits of implementing OKRs in an effective manner:
OKRs enable employees and leadership to have a very clear focus on what needs to be accomplished and what work is out of scope. The idea is to have complete clarity on —
The last part is extremely important as it helps create a sharp focus and set priorities straight.
93% of employees don’t really understand what their organization is trying to accomplish in order to align with their own work.
This illustrates that there is a big absence of clarity and focus amongst employees when it comes to what needs to be accomplished, which stands in the way of creating a high performance culture. Therefore, OKRs can help reduce such uncertainty and ambiguity, making it easy for the workforce to concentrate on what matters.
Taking cue from the first point, the second benefit or purpose of implementing OKRs foris a need for clarity of expectations and overall team and organizational alignment. In case of fast growing organizations, there is an overlapping of roles and responsibilities and a lack of clarity on expectations from each employee. This leads to lower than average outcomes, productivity and revenue growth and data backs the same.
97% of employees and executives believe lack of alignment within a team impacts the outcome of a task or project. Whereas, companies that regularly exceeded revenue goals were 2.3X more likely to report high levels of alignment.
By ensuring organization-wide goal visibility, OKRs help teams to decode what is expected out of each team member and their respective contribution towards achievement of the shared goals. Thus, increasing alignment and collaboration.
Finally, setting and implementing OKRs is often a collaborative process. Employees get involved in and participate during the entire OKR process and feel engaged in the same. This greater involvement and participation leads to deeper levels of engagement and ownership of key results which drive impact.
OKRs also enable employees to also gauge their performance and measure their progress in an effective manner. This motivates them to get more involved in achieving the common weekly, quarterly and annual goals. This higher level of engagement directly impacts key organizational parameters such as retention, productivity, profitability, etc.
The business case for OKRs is very clear. However, for companies that are scaling up, with limited bandwidth and competing priorities, often setting OKRs itself gets left behind due to other business priorities.
If an organization focuses on a manual approach to the OKR system, there are several steps which require a lot of time and effort including setting and writing, implementing, tracking, grading, evaluating and modifying OKRs.
Fortunately, today there are OKR tools in the market, which can help automate all of these aspects to help simplify the OKR journey. The right goal management software can help you maximize the realization of the return on investment for your OKRs. Following are the top five ways in which an OKR software makes a measurable difference on the bottomline —
First, an OKR tool can help organizations document or record the OKRs in a way that is visible and accessible to all. There is supporting evidence to show that what gets documented has a higher chance of being achieved, as what is out of sight is often out of mind.
Individuals are 42% more likely to achieve goals when they are physically recorded.
Therefore, the OKR tool can enable organizations to clearly define the business and team OKRs in a written manner which can be reflected on, seen again and again to create instant recall for employees.
OKR tools are great for creating alignment and accountability. On the alignment front, the OKR software can help achieve high levels of strategic alignment on what is the responsibility of each team member across organizations towards the key business goal achievement.
Highly aligned companies grow revenue 58% faster and are 72% more profitable than their misaligned counterparts.
The dashboard of a good OKR software can help you constantly gauge the level of goal achievement, ensure that team members are aligned on different phases as well as keep a track of when their responsibility is due. It creates high levels of transparency.
Moreover, greater alignment leads to high levels of accountability. Generally, since there is a lack of alignment on responsibilities, there is an accompanying lack of ownership and accountability, and most employees shirk away from taking accountability.
84% of the workforce describes itself as “trying but failing” or “avoiding” accountability, even when employees know what to fix.
A goal management software like SuperBeings allows you to integrate OKRs with regular meetings and check-ins to keep track of progress. Thus, driving a culture of accountability.
It is very common for companies to set OKRs and then evaluate them only at the end of the quarter/year. There is a lack of mid-term tracking which makes it difficult to gauge whether the progress is aligned with the key results or not.
40% of people that write down goals don’t check whether they’ve achieved them. Moreover, only 5.9% of companies communicate goals daily.
An OKR software can help you address this concern by facilitating day-to-day OKR progress tracking. A daily dashboard and history of 1:1 and team check-ins on OKRs, can help organizations track developments over time.
It can also help identify and resolve any performance issues that stand in the way of goal achievement preemptively. At the same time, even if organizations are tracking and monitoring OKR progress, doing so with a manual process is inefficient. An OKR tool can automate most of these processes to enable HR and people managers to spend more time on driving results.
Another major concern that organizations face when it comes to OKRs is being prepared and ready for the same. Many line managers and others struggle with writing effective OKRs. Many organizations believe setting OKRs once is enough. However, that is far from the truth.
Research says, companies that set performance goals quarterly can generate 31% more returns than those reassessing annually.
Using an OKR software can help eliminate all these challenges.
Finally, an OKR software can promote high levels of collaboration for goal achievement. For many organizations, the inability to collaborate leads to low levels of results, diminishing the ROI for OKRs.
86% of employees and executives cite lack of collaboration or ineffective communication for workplace failures.
Using a good OKR software makes collaboration seamless by aligning cross-functional projects and tracking cumulative progress. Invariably, an increase in degree of collaboration is a direct ROI of an OKR tool which can create far reaching impact.
In this final section of the article, we will talk about the key parameters that can help you gauge the ROI of an OKR software. While the above mentioned are primary impact areas, most of them have a qualitative aspect to them.
Gauging the ROI requires backing of data points from employee experience and business results, which the following parameters can help explain.
Organizations should start by gauging whether or not transparency and alignment on goals has increased. This can be measured using employee pulse surveys to understand their opinion on how well they have visibility of goals and clarity on what they need to work towards. Therefore, the first ROI parameter for an OKR software is to identify the increase in level of transparency to ensure everyone is working in the same direction and there are no gaps or overlap in efforts.
The main purpose of an OKR tool is to facilitate the effective and efficient achievement of the goals set by an organization. Thus, the next parameter to measure ROI should revolve around the degree and time period of goal achievement.
You can start by comparing the degree of goal achievement by leveraging OKR grading to see if there is a significant improvement in percentage terms as compared to pre-OKR tool period. Second, it is important to gauge whether or not the goals/key results have been achieved in a shorter period of time or not. Since the OKR platform facilitates better alignment, collaboration, tracking, etc., it can help organizations achieve or realize the goals faster.
Third, there are several administrative overheads that accompany the setting and implementation of goals/OKRs. These include tracking, grading, etc. for managers and providing inputs on the part of employees. The ROI of an OKR software can be gauged by mapping whether or not these overheads come down.
The next parameter for ROI calculation is to measure the change or increase in revenue after the adoption of an OKR software. Since an OKR tool seeks to enable organizations to achieve their goals faster, cost effectively and to a greater extent, there should be an increase in the revenue realized.
According to Larry Page, co-founder, Google claims that “OKRs have helped lead us to 10X growth, many times over.”
Finally, gauging the value of employee parameters like retention/turnover, productivity, engagement, etc, can cumulatively be leveraged to capture the ROI of an OKR tool. There are several ways to gauge these workforce parameters, along with factors like eNPS, etc. which have a direct business impact. Calculating them can help measure the ROI of the OKR tool for an organization.
It is evident that adoption of an intelligent OKR software is not only good to have, but integral for organizational success. Using the right tool has a direct business impact which can be measured in numbers using the ROI parameters mentioned in this article.
There are both qualitative and quantitative aspects to measuring the ROI and a balanced approach to both can empower organizations to align individual performance with business goals.
If you are considering implementing the right OKR software in your business, try out SuperBeings free 21 day trial. Book today. (No credit card or commitment required)