5 Challenges You Can Address With OKR Goal-Setting Framework

The Objectives and Key Results (OKR) goal-setting framework helps organizations turn good ideas into excellent execution. However, businesses often find it challenging to introduce OKRs in the workplace at first. Here are five common mistakes made when setting goals.

1. Having too many OKRs to accomplish

OKRs aim to drive focus. Therefore, it is essential to have 3-4 objectives per quarter or year (depending on the complexity), with 3-5 Key Results per Objective.

By limiting focus on just a handful of Objectives and Key Results, you can prioritize what is essential, better manage the workload, and efficiently accomplish the targets.

2. Focusing more on accomplishing 100% of your Objectives

Typically, goals are set with a preconceived notion that the workforce (for example sales) that does not achieve its targets is not doing its job properly. This is not the right approach for setting OKRs.v

The idea of an OKR goal-setting framework is to enable employees to push their boundaries, innovate, and not demotivate them.

Ideally, your employees should strive to achieve 70%-80% of an objective in each quarter. Choosing objectives that are impossible from the beginning will only cause frustration later.

3. Confusing company-level Objectives with revenue targets

It is often considered that a company-level objective is to “reduce costs by X%” or “increase revenues by Y%.” Unfortunately, these are not objectives but KPI targets — performance levels you want to achieve. They only clarify the overarching focus area for the quarter or year.

So, if the goal is to boost revenues, a quarterly objective could be on acquiring new partnerships or expanding to a new market segment. Whatever objective is identified can be then broken down into smaller goals.

4. Mixing OKRs with employee compensation

It is not surprising to know that 75.6% of companies want to tie performance with compensation. Often appraisals are the only formal record of an employee’s contribution to the business, proving it difficult to find other reasoning for salary review.

Basing compensation on OKRs can lead to understated targets and overstated accomplishments. For example, if salesperson A has a solid work ethic and is proactive in their job, but for some reason, they could not achieve their monthly quota, then they miss out on their bonus.

On the other hand, salesperson B is not as driven as A but has a much lower monthly sales target that is achievable, then they are entitled to a bonus. B does not deserve compensation as much as A, but that happens because of the imbalance in the goal-setting framework. That is why it is best to uncouple employee compensation from the goals.

5. Not giving enough to review the OKRs

Some of the key reasons why companies use the OKR goal-setting framework is because it aligns everyone in the right direction, connects employees to business goals, tracks the progress towards goal achievement and improves employee engagement through regular check-ins.

One major reason why OKRs are so effective is that they make it easy to check in on progress. The catch is they must truly track the OKRs with regular reviews.

If your team sets objectives at the beginning of the quarter, but you fail to follow up on the progress made every week or two weeks, you will realize not much has been done at the end. Therefore, encourage employees to complete at least 10% of their quarterly objectives each week.

That creates a pattern allowing them to complete their OKRs in full even with a grace period of 2-3 weeks, and you can address bottlenecks before they become unmanageable.

Use a goal-setting software such as Unlock:OKR to attain measurable business outcomes and allow everyone to keep an eye on the big picture (the company’s vision).

Conclusion

The unfair analysis of employee performance often leads to poor collaboration amongst team members and lower productivity. OKRs put an end to that — provided the goals are set right at the outset. Hopefully, this article will help you approach the goal-setting framework properly.