Companies have been using SMART goals for decades to remove some of the uncertainty in performance evaluations and set clear expectations. But in practice, employees only pay attention to their goals at review time. And after a whole year, these goals tend to become irrelevant.
OKRs take SMART goals further and give ownership of goals to employees and teams. They're a daily motivational tool as well as a means of communication and coordination for managers.
Benefits for your company
- Focused organization: by writing just a few goals, you go through the exercise of choosing what's important. It's true for the organization but also for teams and individual contributors.
- Reactivity: OKRs are typically set more frequently than traditional goals to keep them concrete and measurable (and add a bit of variety to work!). Teams are better able to react to changing business conditions.
- Effective communication: goals are a great means of communication for company and team leaderships. Your message will stick with employees better than any email announcement you could write.
- Transparency comes with OKRs and is how you're able to empower employees to make better decisions.
- Clear expectations: OKRs are a more sophisticated way to manage SMART goals and just like any SMART goal, they convey expectations.
- More engaged employees: an employee who owns a goal, has a greater sense of responsibility and is more engaged with a job they helped defined.
- Cooperation and alignment: OKRs are normally public. Teams sharing goals cooperate and are less constrained by hierarchical boundaries.
- Better performance: OKRs can be a way - all things equal - to measure performance at an individual level - and therefore to aim for higher results.
- Faster onboarding: When everyone can see current and past goals, new team members can immediately get the history of who they're working with.
- Easier performance evaluations: OKRs are often presented as unrelated to performance reviews. But virtually everyone uses OKRs during performance evaluation. If you proceed with caution, OKRs are a great tool that'll make the dreaded performance review more useful.
OKRs will make goals matter in your organization. Not for the sake of having goals, but so that each employee understands the context of their work and track their progress - like having a personal coach.
Now you're convinced, let's see what exactly an OKR consists in.