OKR is NOT a Checklist for Performance Review
OKR is a popular goal-setting framework used by many companies, and it is used to align everyone's goals with the company's overall mission. OKRs have proven to be an invaluable tool for aligning individual, team, and organizational goals. However, despite their utility in goal management, it's essential to recognize that OKRs should not serve as a mere checklist for employees’ performance reviews. Instead, companies should prioritize meaningful conversations between managers and employees to set clear expectations, fostering alignment with company goals and supporting individual growth and development.
What is OKR
OKR, which stands for Objectives and Key Results, is a goal-setting framework introduced at Intel by Andy Grove and later adopted and adapted by Google thanks to John Doerr. At its core, OKR involves defining clear Objectives, which represent ambitious, high-level goals, and Key Results, which are specific, measurable metrics that indicate progress towards those objectives. Key results are measurable and should be easy to grade with a number (Google uses a scale of 0 – 1.0).
To illustrate, Google's top-level Objective for years has been "to organize the world's information and make it universally accessible and useful." Different groups within Google then create their own Objectives that align with this overarching mission. For instance, at my group Google Cloud Infrastructure, we might set an Objective as "to organize GCP data information and make it accessible and useful for Googlers." Key Results under this Objective could include metrics like the percentage increase in data accessibility or user satisfaction scores.
OKRs are designed to cascade down from the company level to smaller teams and even individual employees, ensuring alignment with the broader organizational goals. This hierarchical structure allows organizations to maintain focus and track progress at various levels.
Why Not Use OKR for Performance Review
While it may be tempting for companies to use individual OKRs as a checklist for performance reviews, this approach is flawed for several reasons:
OKRs are often ambitious. OKRs are typically set with a "stretch" goal in mind. This means that they are challenging and may not be 100% achievable. If OKRs are used as a checklist, then employees may be tempted to set less ambitious goals in order to make sure they can always meet them. This can lead to discouragement for employees to innovate and to take risks.
Collaborative Nature of OKRs: Many OKRs can only be achieved through collaboration among several individuals or teams. Using a simple OKR scoring system doesn't provide context or insight into who contributed the most. Relying solely on OKRs for performance evaluation can lead to unfair assessments.
Neglecting Soft Skills and Behaviors: OKRs primarily focus on quantitative, outcome-oriented metrics. They often overlook the development of essential soft skills, such as leadership, ability to collaborate, and communication, which are critical for long-term career growth.
Risk of Short-Term Focus: OKRs are typically set for relatively short timeframes, often a quarter or a year. Focusing too heavily on these short-term metrics can discourage employees from pursuing longer-term initiatives or investments that may benefit the company in the future.
Prioritizing Expectations and Conversations
Instead of using OKRs as the sole basis for performance reviews, companies should emphasize well-defined and mutually agreed-upon expectations. These expectations should arise from meaningful conversations between managers and employees. They should then agree on a timeline for reviewing progress, such as a one-year performance cycle, and making adjustments as needed.
The managers - employees’ conversations should cover the two dimensions:
Top-Down Expectations: Managers should clearly communicate what the company expects from each employee based on their roles and levels, ensuring alignment with the organization's goals. These expectations can be tied to OKRs, emphasizing how individual contributions contribute to broader objectives.
Bottom-Up Expectations: Employees should have the opportunity to express their skill development goals, career aspirations, and personal growth targets. These bottom-up expectations are crucial for personal development and employee satisfaction.
Regular check-ins and reviews should be scheduled to discuss the status and progress of these expectations. This approach provides a more holistic view of an employee's performance, considering not only what they achieved but also how they contributed and developed along the way.
By combining the quantitative metrics of OKRs with the qualitative insights gained from these conversations, organizations can create a more comprehensive and effective approach to performance evaluation. Managers can make more informed decisions about the employees’ developments and performance ratings, ensuring the employees thrive and contribute to the company's long-term success.