What is OKR and How to Use it for Performance Management?

OKR, or Objective and Key Results, is a popular leadership technique that helps organizations establish, communicate and track their objectives. It is a holistic approach to managing the objectives and performance levels of employees at all levels of the company. An important purpose of implementing OKRs is to ensure that all employees are aware of the organization's objectives and that everyone works together to achieve them. When a workplace uses OKR, employees are encouraged to set very high goals and should document progress toward successful completion of key results with backup data.

Performance management software can measure and track employees' progress toward their goals in real time. A key aspect of the software is that it allows all employees to see the goals of all other members of the organization. Objectives and Key Results (OKRs) are a goal-setting methodology that helps organizations define, communicate, and track their objectives. The action plan should determine the exact set of projects, tasks and to-do list activities that you will need to map out in order for your objectives to become a success. The objective defines what the employee wants to achieve and the key results describe how the employee will achieve the goal within a specific time frame.

Google's scoring method provides the highest level of detail, using a percentage scale (0.0 - 1.0) to give each key result a numerical score at the end of the cycle. OKRs aim to achieve business objectives and superior organizational performance by aligning employee performance and results of the team. For example, if you want to “Win the World Cup”, you can set up two key result areas, such as “Tournament Average Goal Rate of 2.0” and “75% Ball Possession Rate”. Spending time defining team objectives and organizational strategy in a specific and measurable way can help align everyone's efforts. Be wary of key assignee roles, responsibilities, and deliverables to maintain a smooth process from point A to point B. Some think that OKRs are simply a more agile version of Peter Drucker's goal-based management (MBO) process, which requires objectives to be INTELLIGENT (specific, measurable, achievable, realistic and time-bound).

Instead, start each key outcome with an action verb and continue the sentence with a description of what will be delivered with evidence of completion. However, an important difference is that OKR objectives must be very aggressive, and 100% completion of key results is not as important as moving towards completion. At the end of the time period, you assess how well you have achieved those goals. Needless to say, you can't lead a successful team without formally documenting goals and objectives. The acronym OKR stands for Objectives and Key Results, it is a popular management technique or tool to help companies focus and implement the strategy.