The popular performance management framework known as Objectives and Key Results (OKRs) was developed by Intel and subsequently adopted by businesses like Google, LinkedIn, and Twitter. The framework is made to help establish objectives and measure accomplishments in an open and transparent manner.
On the other hand, performance reviews are a procedure where a person's performance is assessed against predetermined criteria. Reviews of an individual's work are meant to give constructive criticism and highlight areas for development.
Although using OKRs for performance reviews might seem like a no-brainer, it's actually not a good plan to do so. We will look at why performance reviews and OKRs don't work well together in this essay.
First of all, OKRs are made to be a group endeavor rather than an individual effort. The idea behind OKRs is that teams should collaborate to establish goals and key outcomes that are in line with the overall objectives of the business. This strategy encourages teamwork and makes sure that everyone is pursuing the same goals. When OKRs are used to measure individual performance, it can foster a competitive atmosphere where team members are more concerned with improving their own performance than collaborating to accomplish common objectives.
Additionally, OKRs are intended to be ambitious, which means that they should push teams to accomplish more than they otherwise would have. Team members may establish lower goals in order to guarantee that their goals are met when individual performance is assessed using OKRs. This undermines the goal of OKRs, which is to inspire organizations to aim high.
Furthermore, using OKRs for performance evaluations can lead to a circumstance in which team members are punished for circumstances that are out of their control. For instance, if a team member sets a goal to boost website traffic by 50% but a sudden market change causes traffic to drop, the team member may be penalized for falling short of their goal. Team members may become frustrated and demotivated as a result of this unjust situation.
On the other side, performance reviews are made to be more unique. They give managers a chance to discuss a person's strengths and weaknesses and assist them in identifying areas where they can develop. When performance evaluations are linked to OKRs, the emphasis switches from personal growth to accomplish particular goals. As a result, there may be a tendency for team members to prioritize accomplishing goals over personal growth and development.
Furthermore, OKRs are intended to be updated frequently, whereas performance reviews are frequently carried out yearly or biannually. This implies that evaluating team members based on out-of-date goals could result from using OKRs for performance reviews. Team members may become frustrated and confused as a result, thinking that their performance is being judged according to outdated goals.
In conclusion, although using OKRs for performance reviews may seem like a logical fit, doing so can actually be a very bad plan. OKRs are intended to be a collaborative endeavor rather than an individual one. Individual performance evaluations based on OKRs have the potential to foster a competitive atmosphere that is detrimental to teamwork and common goals. Furthermore, using OKRs for performance reviews can penalize team members for circumstances beyond their control, put the emphasis on achieving particular goals rather than overall growth, and result in evaluations that are out of date.
The use of OKRs for team collaboration and performance reviews for individual growth should be kept separate in companies. Setting aspirational objectives and key outcomes that are in line with the overall objectives of the business should be a team effort. Separate performance reviews should be held, giving managers the chance to give feedback on a person's strengths and weaknesses and assist them in identifying areas for development.
In conclusion, even though it may seem like OKRs and performance reviews go well together, it can actually be a very bad plan to use OKRs for performance reviews. To foster a productive and collaborative work atmosphere, organizations should concentrate on using OKRs for team collaboration and performance reviews for individual growth.
If you liked this article and you are looking for a way to align everyone in your organization, let’s have a call or simply download our OKR Guide. We also offer OKR consulting and OKR training, but our approach differs from other companies, we believe OKRs should be fully integrated with your product development. If you’re not ready to talk to us yet, attend our weekly OKR webinar.