Last updated 20 May 2022 ·
When it comes to achieving your business goals, having a robust performance management process can be very effective as long as you’re not just following a checklist but putting in the thought and effort necessary to achieve results daily. OKRs, objectives and key results provide a highly effective goal-setting framework that simultaneously facilitates performance management and strategy execution.
To help you understand what an effective performance management process combining OKRs can look like, we have listed six steps to consider below:
Use SMART objectives
One of the major prerequisites for an effective performance management process is to ensure measurable performance. SMART objectives ensure the work is specific, measurable, attainable, relevant and time-bound (SMART). Setting quantifiable goals means performance can be continuously monitored, achievements can be celebrated, and everyone is focused on the right things to move the business in the right direction.
OKR software can help incorporate the five SMART principles when setting objectives and key results. In Google’s OKR platform, a section asks users how their objectives are SMART: What value? Why are they important? How will we measure success?
Encourage ownership of execution
OKRs allow each employee to be 100% responsible for their portion of a company’s overall strategic mission and purpose; they are encouraged to own their part of the plan and are accountable for their progress. This empowers them to take ownership of their own pace of execution and, in doing so, encourages high performance, improved productivity and success.
Measure results throughout
You must measure results throughout, which is why working with an OKR software system is helpful. This type of goal-setting tool will help you measure progress against specific outcomes and is a great way to identify opportunities for improvement. To help track progress, consider implementing standard reporting measures, where you report on both individual results and collective results as a team and business.
Align individual, team, and company expectations
Any performance management process should combine the critical strategic priorities of the business as a whole with those at a team and individual level. Using OKRs allows business owners and leaders to align the individual, group, and company expectations due to the way they cascade from the leader and filter throughout all levels and teams in the business. Once everyone is aligned towards achieving the common business goals and fully understands why they are doing what they are doing, this can dramatically affect productivity, efficiency, and effectiveness. With an OKR software solution in place at all times, leaders can easily measure progress on key initiatives of all team members against quarterly or monthly updates and weekly check-ins.
Know when to change direction
No matter how successful a project or endeavour is, it’s essential to stop and take stock of where you are. That is, it’s necessary to have periodic reviews and check-ins to ensure that you’re still on track. If you aren’t, then make adjustments to return to the focus.
Due to the highly structured nature of OKRs, such performance monitoring becomes more easily achievable through system dashboards and summaries. Such top-level performance statistics will serve three key purposes:
- Identify whether the current focus and direction are working as planned and producing a good result. If not, you will become aware of this quicker and equipped to change direction.
- You can identify rising stars in your business which helps to retain top talent.
- You can identify any areas for development or improvement and implement suitable actions to address these.
Take action on knowledge gained during the process
After every performance review, take some time to digest what you’ve heard from leaders, managers and employees. A performance review is not just for managers to tell employees what they think they did right or wrong. It’s also an opportunity for both parties, manager and employee, to discuss how you can improve in those areas (as well as others). Reviewing those notes after each session can help you identify opportunities for improvement. We recommend that OKRs be reviewed every quarter to ensure they are still aligned with what the overall business strategic focus is. Each OKR cycle reveals learnings that can be considered for the next time around, making continuous improvements all the time.
If you are considering introducing OKRs into your business, download our free resource - The OKR Builder™ today. It contains a step-by-step guide on how to write compelling OKRs that cascade seamlessly throughout your business.