“Annual performance reviews are costly, exhausting, and mostly futile.”
John Doerr, author of Measure What Matters
Performance appraisal jokes are an all-time favourite when it comes to corporate comedy. It’s the same gossip every year, and if case it’s not, you know that’s going to get discussed.
But ambiguous performance measurement can be removed if one adopts OKR into their work culture. It’s pretty much straightforward under OKR when it comes to performance - it reflects how ambitious goals you can set, perform consistently and achieve. There is more clarity on whether you should be rewarded or punished, thanks to OKRs transparency.
In this chapter of the OKR guide, we will dive deeper into optimizing overall organizational performance and improving employee performance using OKR alignment.
There may come times when your team or management may lose faith in OKR as an exercise. It could feel as if it's another burden. But OKRs are meant to reduce burden, so in case if it's increasing it, it just means you aren’t implementing OKR the right way.
OKR alignment is crucial for its success. Before diving in for performance, check for any OKR alignment issues so that your organization and employees do not face the burn in their performance reviews.
Here are 3 best practices to ensure the strategic OKR alignment is maintained:
It’s important to ensure that your employees and management teams understand the concept of OKRs. Things can go wrong when the basis of knowledge itself is not cleared up. Take Projects for educating your company about OKRs, like making it mandatory to read this OKR guide!
Other methods include conducting OKR workshops and organizing OKR playbook sessions regularly. Your new employees also need to get acquainted with OKR culture, so play special emphasis on curating an organization-specific OKR guide for new hires.
Do your OKRs come together towards the vision and mission of your organization? Are your employees able to align on achieving OKR Key Results and not get distracted with something else in their day-to-day job? Frequent discussions via weekly OKR reviews can help you understand in what direction your organization and your OKR are going.
Nobody likes last-minute changes, but with OKR, small changes in the plan as one executes their Projects to achieve OKR Key Results are common. Hence, inculcating communication and OKR transparency as default work culture is important within teams to ensure healthy OKR drills.
Detect any early signs of issues in OKR alignment so that you can be empathetic with your employees and managers in case of low performance.
Adoption of Continuous Performance Management (CPM) triggered due to shortcomings of Annual Performance Reviews. While OKRs drive strategy and goal setting, it also requires dedicated assessment that can be taken care of with the CPM model.
Thus, integrating OKRs and CPM allows combining high-level organizational goals to the daily activities of their employees, ensuring better execution.
OKR can be one of the aspects to consider as ‘context’ for performance reviews. This helps connect goals and strategic decisions made with the daily activities of your employees.
Please note, using OKR as the sole performance review tool can reduce your employee performance, because there can be so much more they might have contributed that won’t be taken into account. Also, as mentioned prior, low OKR grades do not mean 'low performance' of the team but are data indicating the OKR needs to be redefined. Hence, have other metrics too into your CPM exercise.
In this section of the OKR guide, we share 3 best practices to integrate OKR into your CPM:
CPM enables your OKR program with feedback data points that you can use to optimize your Key Results and Projects. This is facilitated by the regular check-ins that managers can use to guide their employees to maximise their outcomes by rewriting Projects.