Performance management is a corporate management technique that assists managers in monitoring and evaluating the performance of their staff. The purpose of performance management is to create an atmosphere in which people can perform to their full potential in order to accomplish the highest-quality work in the most efficient manner possible.
A systematic performance-management programme ensures that managers and employees are on the same page when it comes to objectives, goals, and career advancement, as well as how individuals’ work fits into the company’s overarching strategy. Individuals are viewed in the context of the larger workplace system when it comes to performance management. In theory, you want to achieve the highest possible performance level, although this is considered unattainable in practice.
Performance-management programs use traditional tools such as creating and measuring goals, objectives, and milestones. One tool that is used by various organizations is an OKR, or Objective and Key Results. In this article, we discuss how an OKR works, and the benefits of using one.
OKRs are a goal-setting tool for teams and individuals that helps them develop challenging and ambitious goals with measurable outcomes. They are a way to keep track of progress, build alignment, and encourage participation in working towards tangible goals. OKRs can be broken down into two parts, as the name implies: Objectives, and Key Results. An Objective is simply what is to be achieved. By definition, objectives are significant, concrete, action-oriented, and (ideally) inspirational. They are broad and resonate with the overarching goal(s) of the company. Examples of objectives of a company may be to increase revenue, build reputation, broaden outreach, etc.
Key Results, on the other hand, can be thought of as milestones that tell you whether or not you are working towards your objective.
They serve as a baseline for determining how close you are to achieving your goals. Effective KRs are specific and time-bound, as well as realistic. They are, above all, measurable and verifiable. There is no grey area, no space for question when it comes to meeting the requirements of a crucial result – you either meet them or you don’t.
Individuals and organizations should keep a few things in mind when setting their OKRs. First of all, it is important to set an optimum number of Objectives, usually between three to five. More than this can lead to over-extended teams and a diffusion of effort. Moreover, it is necessary that your Objectives contain expressions that push for achievements, rather than consistency – avoid using terms such as “keep hiring”, “maintain position”, etc. The expressions should contain endpoints rather than a process, and these endpoints should be tangible, objective, and unambiguous. When it comes to Key Results, there should be about three KRs per objective. These should be measurable milestones which, if achieved, will directly advance the objective. Again, KRs should describe outcomes, not activities, and should include evidence of completion.
Using OKRs in organizations has many benefits. First of all, it aligns the goals of the individual employee with the overall goals of the company. As a result, it also gives direction to teams and individuals. Through OKRs, it is possible to track regular progress towards goals rather than only doing term evaluations. OKRs allow organizations to set ambitious yet
achievable goals, and achieve measurability, accountability, and transparency. Lastly, OKRs boost individuals’ engagement and empowerment through their goal-setting process. Many well-reputed companies today, such as Google, Intel, Facebook, and LinkedIn, use OKRs to evaluate the performance of their employees.
About the Author: Payal is an undergraduate student, pursuing a major in Psychology. While her aspiration lies in clinical psychology, she is keen on learning about all fields in the domain of mental health. She thrives on books, music, and traveling, and dreams of making it big someday.