March 19, 2019
Can you use OKRs in performance reviews?
Deloitte research confirms that the majority of managers think that the annual performance review doesn’t serve its intended purpose. Still, some managers may wonder if they can blend modern techniques, such as OKR goal setting, with the annual performance review to make it more effective. Marrying OKRs with this once-a-year legacy practice will lead to too many setbacks, so the answer is no.
But managers can use OKRs in continuous performance management (which is the modern replacement of standalone annual performance reviews). OKRs are a modern goal setting technique and, while not meant to be used with traditional and legal performance reviews, it should be used with continuous performance management and regular check-ins.
OKRs and legacy annual reviews don’t mix...
OKRs are real-time. And they push teams to stretch and excel, taking smart risks to achieve ambitious goals. But if there’s a chance teams could be penalized for failing to deliver on those ambitious goals (i.e., a poor rating on a performance review), they’ll be more inclined to scale back their efforts. Also known as sandbagging, this resistance can thwart your overall company progress.
...but OKRs and performance check-ins do mix.
By now, your company should have stopped using outdated annual performance reviews, as many Fortune 500 companies have already done. Smart executives now use OKRs instead with continuous performance management (based on regular, ongoing, real-time check-ins) to align with and motivate their teams. Not only does it accelerate performance by giving teams a direct line of sight into how their work impacts company goals, it also ensures everyone is focusing on important company priorities.