Creating Exceptional Performance through Objectives and Key Results

Yet this is how many organisations manage performance among team players; setting annual goals that have little buy-in from their team members and are not regularly revisited. Moreover, managers are often ill-equipped to provide effective and honest individual and team feedback and recognition or to conduct conversations about achievable goals.

Organisations are mobilising significant resources around performance management with sub-optimal returns. The impact of performance management processes on employees is significant – with positive and negative outcomes depending on how well it is managed.

To achieve the shift to a more inspirational and motivational performance management approach, we recommend the use of “Objectives and Key Results” (OKR). OKR is a goal setting and performance management methodology used by many leading organisations such as Adobe, Intel, Gap, Google, LinkedIn, Spotify and Twitter.

OKRs have five key benefits. They:

1. Enable companies to “repurpose thousands of working hours and millions of dollars from tasks that do not drive performance”. For this reason, about 70% of multinational companies are moving to a form of OKR performance management and away from the annual review process. (Sources: GAP Inc. and HBR, The Performance Management Revolution)
2. Help teams focus and deliver higher results on what matters and define what not to address. This is especially important where teams are working remotely.
3. Aid in the development of employee trust, engagement and recognition because they rely on regular communications and feedback and are targeted to the specfic needs of team members.
4. Support transparency across teams and incentivise people to collaborate and help each other win. The approach relies on ongoing conversations with teams to re-align goals and determine how they can work together to achieve them.
5. Allow companies to become more agile through the regular review processes.
   

There are three critical components to OKR performance management systems: Objectives, Key results and Feedback:

An OKR approach differs from the standard annual performance management process in several ways. For example, key results are outcome and not task based, regular real-time feedback is provided to and from managers, colleagues, direct reports and others, rather than in an annual planning meeting. Performance management and compensation discussions are separated to focus on the development of team members.

As in the case of the Olympics, implementing an OKR approach takes times and discipline but it can also help teams deliver gold medal performances and business results alike.