OKRs Can Support Performance Management - Here’s How

OKRs are used by teams and organizations everywhere to translate high-level strategy into short-term goals. As a team dedicated to managing your company’s human resources (HR), you might be overseeing teams who are using OKRs in their own work or are interested in implementing them for yourself. But while OKRs are a great tool for teams looking for ways to plan out what they intend to achieve and how to get there, they’re not the best for evaluating employee performance.

Don’t fall into the trap of pinning compensation to key results. Instead, here are four ways you can use OKRs to bring out the best in your employees, encourage collaboration and drive employee engagement. 

Why OKRs Don’t Work Well for Performance Management 

Goal setting has historically been used by HR teams as a way to evaluate an employee’s performance. However, experts generally advise against the use of OKRs for traditional performance management, where employees are assessed and rewarded for individual performance. 

In fact, doing so can lead to situations where we see unhealthy competition between members of the same team, weak goals picked over challenging ones because they were easier to accomplish for a bonus, and demotivated employees.

Instead, OKRs work best when used to measure team and company performance, not individuals. Rick Klau, Chief Technology Innovation Officer at Google, echoes this, saying, “OKRs are not synonymous with employee evaluations. OKRs are about the company’s goals and how each employee contributes to those goals.” Performance management should be separate from employee OKRs. 

As an HR team, use OKRs not for individual evaluation, but as a way to keep employees accountable, engaged, and inspired to work together towards a set of common goals.

Tip: If you need help setting up an OKR framework for your team, here’s a handy guide to help.  

How HR Teams Can Use OKRs Effectively

1. Write high-level OKRs – for your own team

Just like any other team, OKRs are a wonderful way for HR teams to set their own goals for the year. While the leadership team is responsible for setting the company direction or the ‘why,’ it is up to individual teams and departments to work together and set the ‘how.’ 

Get your team together to set the key results the team will work on for each cycle and the tasks needed to accomplish them. Don’t brainstorm alone; working together will help your team feel more connected to each other and other teams. You can also use a hierarchy tree that shows how tasks link back to each OKR as a reminder that the work done contributes to a wider goal. 

A screenshot from the OKR for Jira app

Use a hierarchy tree to show who is responsible for which task, and how each key result relates back to the objectives.

Lastly, don’t set easy goals. As an HR team manager, encourage stretch goals – if you’re completing every goal, you’re not aiming high enough. OKRs work best by pushing boundaries, not by setting easy goals. 

Here are some examples of OKRs that HR teams can set: 

• Objective: Improve flexible work options for employees.

  KR #1: Evaluate three solutions for cloud storage and select the best one for the team.

  KR #2: Ensure sufficient IT support by having a 1:40 ratio of technicians to employees.

  KR #3: Achieve a 90% satisfaction rating of the new system.

• Objective: Improve the onboarding process for new employees.

  KR #1: Onboard all new employees within the first two months of them joining the company.

  KR #2: Increase the pass rate for new employees to 95%.

  KR #3: Achieve a 90% satisfaction rating of the onboarding process among newcomers.

2. Review teams’ OKRs to find gaps

One of the most challenging tasks for HR teams is discovering how you can best support the teams under your purview so they can achieve more. It can be difficult to pinpoint exactly what the team needs outside of annual reviews or one-on-one meetings. 

The OKRs can be a great source of data on possible gaps. Every OKR cycle includes review meetings where teams are encouraged to bring up any issues or blockers they may have met along the way. Some of these issues may be things that HR can help with, such as ensuring a team has enough skilled people to complete a project within the period.

Ask questions such as:

• What was the main reason that prevented you from completing the set goal?

• Was there a particular resource or skill that was lacking?

• What are your ideal working conditions to be the most productive?

In addition, ensuring that employees have what they need to perform at their best at work will make them feel supported, raising engagement and motivation.

3. Focus on outcomes, not output

OKRs boost performance on the whole because the objectives provide everyone a sense of purpose. By explicitly defining success, clear goals can enable employees to do their best work. 

While OKRs should not be a direct evaluation for employee performance and compensation, they can be a source of great data. For example, an employee who took initiative to set and lead a difficult goal, even if it wasn’t 100% achieved, is someone who showed accountability and demonstrated valuable leadership skills. Someone like that could be a great leader in the future.

You can also use outcomes to design individual development plans. If something didn’t go well, one reason could be because the individual needed more training or experience in that area, which opens them up for a discussion on possible training plans. If something did go well and an employee excelled in a particular subject, they could be placed to teach others or become a subject-matter expert in the company. 

Don’t forget your own team. As a manager, give your teams qualitative feedback on OKR-related behavior, such as “I like how you took the lead by volunteering to oversee the first key result” or “If you’re not sure what to work on next, you could always refer back to the team’s OKRs when prioritizing tasks.”

4. Use OKRs to encourage (and reward) teamwork

Successful teams collaborate and communicate well, and the OKRs provide a base system that encourages these traits. 

If you’re interested in using OKRs for your own HR team, set this expectation for teamwork from the start by including everyone involved during the goal-setting stage and keeping your goals transparent. When teams work together towards a goal, they’ll feel that they ‘own’ the product and share ownership in the results. 

If you’re supporting teams who use OKRs, look at the key results to see which teams have pulled together over the past year to achieve some truly incredible moonshot goals – these are the teams where everyone has contributed significantly over a period and should be recognized for their collaboration. Use a tool that tracks the progress of OKRs and links them to tasks assigned to teams. That way, you can monitor which key results a team has contributed to and identify highlights. 

How an OKR tool helps teams visualize and keep track of progress

OKRs are a great tool for any team – especially HR teams. But managing multiple teams’ OKRs on top of your own processes can be challenging, which is why you might want to consider using a performance management tool or an OKR tracker. 

If your employees use Jira, the best way to get an overall view of the OKRs and how the work assigned contributes back to the goals is with a Jira app. OKR for Jira links Jira issues with OKRs, allowing HR teams and managers alike to see all the issues under each key result. It also comes with a shared dashboard to ensure transparency and help keep the OKRs fresh in everyone’s minds.

Whether you are considering using OKRs for your own team or are supporting other teams using OKRs, a tool will help automate many of the small details, freeing you to focus on what matters the most – the people. 

Author Bio: Weronika Spaleniak is the Product Lead at Digital Toucan, an Atlassian app vendor dedicated to creating apps like OKR for Jira that bring data to life for agile teams. One of her most recent projects is an implementation guide designed to ensure a smooth rollout for teams looking to implement the OKRs.