There are new trends out there, you will read about it on social media platforms and other People engagement forums, they call it OKR’s or Objectives and key results.
What is this new OKR thing everyone is talking about?
According to Wikipedia:
OKR’s or Objectives and key results is a goal setting framework used by individuals, teams, and organizations to define measurable goals and track their outcomes.
In most cases this includes a hierarchy that can be represented as follows:
Basically, it allows the user to start with the Mission and Vision and from there follow on to the Goals, strategy, tactics and finally the Action plans to achieve their targets, while allowing you to measure how they perform.
How things use to be done (Performance Management)
In the “old days” where the only way to measure performance of staff was by conducting Performance reviews by defining KPAs (Key Performance Areas) that apply to an individual and how they deliver their work, and then go into further details by defining KPIs (Key Performance Indicators) that allowed the user to know what to measure for the performance outcomes.
There are many frameworks that allow this, with the basics being a Performance Management form, that is completed by everyone and filed, never to be looked at again, and in some cases a more advanced online system that track the scores and produces a results sheet and tracks the scores to influence Salary increases or not.
The Problem with the “old way”
With only Performance management being used, the managers are creating their KPA’s and KPI’s in line with the known performance issue areas. For example, if an Employee is not performing in a specific area, the manager will ensure that the KPAs and subsequent KPIs that are assigned to that Employee will focus on those short comings. Also placing more weight on the areas that need improvement. Unfortunately, this does not focus on any of the overall strategic areas that the strategy has decided they need to focus on for growth.
This also measures an employee’s performance based on a biased “feeling” from the manager, rather that allowing a non-biased evaluation of an Employee in a specific role or job. In short, the performance management is not used as a positive employee engagement tool, giving valuable feedback to the employee to grow their career, but rather as a instrument to punish them for bad behaviour.
New way of doing things (OKR’s)
With more and more companies adopting the OKR approach they now implement plans around fewer but more general performance metrics to track, but with the key being that they look at it from the top down.
The actual Strategy session conducted by Executives and top management now defines the performance metrics and what needs to be focused on, by not going into too much detail.
The benefit of an approach like this is that you can see of the performance is contributing to the overall OKR’s, and if the business is moving towards the strategic plans laid down by management.
Merge the Past and the Future
These two models are quite different, and they each focus on a important area, the strategic plans and roadmap put down by Management, and the actual performance of the people in the positions that contribute to the revenue and operations of the business, the life blood in the veins of the organisation.
Now, if we can find a way to have both these models in a single methodology, then it would allow us to track everything from Top to Bottom. In fact, you would be able to know how much a single Employee contributes to the overall strategy of the business. Imagine the power of being able to see exactly where the strategic impact of the workforce is having its biggest impact. Is this not the pinnacle of measuring Employee performance?
How to achieve this in your business
With Online HR systems that contain performance management systems, we can now start seeing tools that generate valuable insights for the Executive and top management teams. Now quick decisions can be made based on real time information, allowing larger organisation to be more agile in making changes to the organisation based on accurate insights and data.
In HRSimplified we merged the Performance management world that looked at KPAs and KPIs, with the new models that focus on OKRs and Outcome strategies.
By defining your OKR’s first, the system now allows managers to setup Templates that contain KPA’s and KPI’s that are linked to Job titles in the business. These are linked through to the OKRs allowing the scores to be rolled up from KPI and KPA right through to OKR top levels.
With the Performance Management Insights dashboards, the rolled-up performance management scores seamlessly contribute to the OKRs scores, showing the user exactly how the Individual OKRs are receiving focus from each manager/team/department.
As older models get retired and new models are adopted, its sometimes not a bad idea to see how models could potentially work together to give us even more powerful toolsets to get more out of our businesses
To see how HRSimplified can help your business manage your performance framework, setup a demo with one of our consultants here.