OKR vs. KPI: How they compare and work together

OKR vs. KPI: How they compare and work together

Recommended reading: Benefits of using OKRs goal-setting software

What’s the difference between OKRs and KPIs?

OKR stands for Objectives and Key Results. An OKR is made up of 3 separate components — an Objective, Key Results and Initiatives. 

Simply put, an Objective tells you where to go, a Key Result will let you know whether you’re there or not and Initiatives will tell you what you need to do to get to your destination. Initiatives are often confused with Key Results, it’s important to note that they’re not the same thing. In case you were confused, head over to this article

It leads to unfair and inaccurate performance reviews

OKRs are collaborative by nature and push employees and teams to move out of their comfort zones. Evaluations based on these objectives do not offer an authentic performance report of individual employees. 

Rather, it reflects the comparative evaluation of a group of people working together to fulfill common goals. 

Results in the creation of unusually modest and simple objectives

The primary aim of the OKR framework is to help companies set realistic and ambitious objectives. With the framework’s scope for failure, employees set difficult objectives even if they are not able to fulfill them. 

But, linking OKRs with performance evaluation eliminates this advantage. This is because failure to achieve the goal impacts the benefits employees get. This prevents them from setting goals that may be too difficult or too risky. 

Shifts employees focus on their output rather than the outcome

When companies link OKRs with performance reviews, the objectives are cascaded down to individual employees for easy evaluation. This results in huge multiplication of OKRs at the employee level and makes managing them quite difficult. 

Most importantly such cascading of objectives shifts the focus of teams and employees on the output at the individual level rather than the outcome at the organizational level. This negates the very essence of OKRs which are designed for setting common business objectives. 

Comments are closed

Frequently Asked Questions

What does OKR software refer to?

OKR software refers to specialized software tools and platforms designed to facilitate the implementation, management, tracking, and analysis of the OKR (Objectives and Key Results) framework within organizations. OKR software provides a digital solution for setting and aligning goals, tracking progress, and fostering collaboration across teams and departments.

Which is considered the best OKR software?

The “best” OKR software can vary depending on your organization’s specific needs, goals, size, and preferences. There are several well-regarded OKR software options available, each with its own strengths and features. It’s important to evaluate these platforms based on your organization’s requirements. Here are a few popular OKR software tools that are often considered among the best: Asana, WorkBoard, Perdoo, 15Five, Weekdone, Koan, Gtmhub, Betterworks and Atiim.

How do I select suitable OKR software?

Selecting suitable OKR software requires careful consideration of your organization’s needs, goals, and operational processes. Choose the right OKR software based on the Organization’s Needs, Key Features, Budget, Available Options, Demos, Trials, User-Friendliness, Integration Capabilities, Scalability, Customization Options, Support, Training, Team Consultation, References, Trial Period, Long-Term Value, Data Security and Privacy.

Should OKRs be measurable?

Yes, one of the fundamental principles of the OKR (Objectives and Key Results) framework is that Key Results should be measurable. The concept of measurability is crucial for creating clear and actionable goals that can be tracked, evaluated, and adjusted as needed. Measurable Key Results provide a tangible way to determine progress and success.

Is it essential for everyone to have OKRs?

While the Objectives and Key Results (OKR) framework can provide numerous benefits to organizations, it’s not always necessary for every individual or team to have formal OKRs. The decision to implement OKRs should be based on the organization’s goals, structure, culture, and the specific challenges it aims to address.

What is the ideal duration for setting OKRs?

The ideal duration for setting OKRs depends on various factors, including your organization’s goals, industry, project timelines, and the pace of change within your industry. There is no one-size-fits-all answer, but here are some common timeframes to consider:

  • Quarterly OKRs: Many organizations follow a quarterly OKR cycle, setting objectives and key results every three months. This shorter timeframe allows for more frequent adjustments and adaptations to changing circumstances. Quarterly cycles are especially useful in fast-paced industries and for teams working on projects with relatively short timelines. 
  • Annual OKRs: Some organizations prefer to set OKRs on an annual basis, aligning their objectives and key results with their fiscal year. This approach provides a longer planning horizon and can work well for industries with longer project timelines or less frequent changes. 
  • Biannual OKRs: For organizations that fall between the two extremes, a biannual OKR cycle (every six months) can strike a balance between flexibility and longer-term planning. 
PHP Code Snippets Powered By : XYZScripts.com