Familiar with Perdoo and the content we write? Then you’ve probably heard us say that OKR isn’t a tool for employee performance management.
OKR and employee performance management serve different purposes. OKR helps organizations translate their strategy into short-term goals for teams and individuals. The OKR framework is, therefore, built to serve the organization as a whole and not manage the individual performance of its people — that’s the role of employee performance management.
Having said that, there’s no doubt that people are your most powerful resource. They’re at the forefront of driving execution and realizing growth as they’ll be the ones working directly on your goals (OKRs & KPIs). OKRs, therefore, provide great insight into an employee’s performance.
In this article, we’ll share how you can effectively embed OKRs in your performance reviews.
What is a performance review?
As a manager, you want to ensure your team is engaged, working towards the same end goal, and performing well. Performance reviews aka appraisals are a powerful tool to give and receive feedback, assess what went well over a period of time, identify what can be improved, and build future plans together.
It’s important to set up regular performance reviews with each individual. And, goals could play a crucial role in such meetings.
Embedding goals in performance reviews
There are many valuable areas to discuss in your performance reviews: career aspirations, functional expertise, development areas for role success, demonstration of values, ability to execute, quality of execution, etc. OKRs are among the many sources of information that help managers understand how an employee is performing and ensure employees understand what’s expected of them.
Here are 3 ways you can embed OKRs in your performance reviews using Perdoo:
- Evaluate execution
OKRs are inherently collaborative in nature, so individual performance evaluations shouldn’t reflect whether OKRs were achieved or not. Instead, take a look at all the goals an employee leads and discuss OKR-related outcomes and outputs.
Your people will continuously be working on various activities and outputs to help your organization deliver its strategy. At Perdoo, we call these activities “Initiatives.”
Initiatives push the organization toward an outcome, and therefore, are a great tool to evaluate employees’ contributions toward higher-level Objectives. They also tend to involve less collaboration than other types of goals (ie. OKRs and KPIs) and can be a great measure of individual employee performance.
If you’re using an OKR software like Perdoo, you could pull up the employee’s profile page or export it to have it in the meeting. Things to discuss:
- Did they do a good job executing this OKR?
- If not, then consider:
- What didn’t go well?
- What could have been done better?
- Based on learnings what should be done moving forward?
Another option in Perdoo is to pull up the Initiatives led by the individual — head over to Custom Reports and filter based on Initiatives and the lead. Click into the Initiatives to have more focused discussions around the execution of the activity and the related outcomes.
2. Use outcomes to design individual development plans
Performance reviews help understand the employee’s strengths and weaknesses and what they should develop in the future in order to achieve better results. When closing your OKRs it’s important to rate execution and list down the lessons learned of what did and didn’t go well.
Discuss such performance-related behaviors around the OKR. Celebrate wins and talk about areas of strength and how they can best be used to support teams or the organization as a whole.
If something didn’t go well, one of the aspects could be that the individual was not prepared or qualified enough to deliver the expected results. Openly discuss areas for improvement and how the organization can support the individual’s growth.
In Perdoo you can pull up the closing notes for closed OKRs that the individual was leading over the previous quarters, click into the closed OKR to discuss details around the learnings and steps moving forward.
3. Focus on OKR-related behaviors
On a macro level, make OKR-related behaviors one of the many inputs into your appraisal system, not only to keep them front and center but to also create a window into individual performance that directly affects the growth of the organization. It’s best to make these behaviors role-specific, too. For example:
For managers and executives:
- Are they able to identify the right OKRs to focus on?
- Do they proactively help direct reports to achieve their goals on time?
For individual contributors:
- Are they willing, and able, to lead Objectives?
- Do they complete Initiatives on time?
To conclude, OKR isn’t a performance management tool, but instead provides managers with concrete insights into an individual’s performance and contribution to the organization as a whole.
Individuals are motivated when they see purpose in their work and are likely to perform better when they know their efforts contribute to the success of the organization. OKRs, therefore, are a powerful tool to provide that sense of alignment and direction.
When discussing an individual’s performance, their contributions to the team’s and organization’s goals should be a significant part of the review so that the individual feels the connection between their development and the company’s priorities.