One of the most common questions I get about OKRs is “How can I use these for performance reviews?” or if the person has done their homework, “Why can’t I use these for performance reviews?”
Why can’t you?
OKRs have several key jobs: Creating focus. Uniting a team. Pushing towards greater accomplishments. It’s that last one I worry about when you tie them to performance reviews.
OKRs, when done right, are all stretch goals. If you tie them to performance reviews and bonuses, you incentivize sandbagging. Why would you gamble your livelihood on bold goals when you can set goals you can actually meet. And then you can have a nice bonus and get on with your life.
But then, how do we do performance reviews?
How did you do them before? I’m guessing it had something to do with performance. Doing performance reviews is an understood art, and I’m sure there are over a hundred books on Amazon explaining how various experts think you should do it.
The way I like to do it is pretty simple. Do reviews every quarter. A year is too long to wait. People can go to hell in a year. As well, as a manager all you can recall is the last three months anyhow, so why wait?
Have all your employees write 250 word essays on what they accomplished last quarter. If you are using the simplified OKR driven status email format, it’s quite easy to dig up accomplishments. Then, if each manager has 6-8 direct reports, it should be easy for her to read the reports and see who is moving the needle and who isn’t.
Finally, have the hard conversations. It’s easier to have an uncomfortable conversation about how an employee is not meeting expectations than a miserable conversation about how they are fired. Give feedback early and often. It fits well with the continuous learning model OKRs promote.
OKRs are not a silver bullet. They are not an all-encompassing management strategy. They are just a way to set and make hard goals. Be sure to pair them with the best practices in the industry.