OKRs

objectives and key results.

WHAT ARE OKRS?
Objectives and key results (OKRs) are a framework for defining
and tracking goals and their outcomes within a business. 
The objective is qualitative, and the key results are quantitative.
They are used to focus an entire business around one big, bold
goal. OKRs are usually set during a defined time frame, most
likely quarterly or annually. 
If you were to start planning out or writing OKRs you would
need to keep these two questions in mind:
1. What do you want to accomplish? The answer to this will be
your objective.
2. How are you going to achieve this? The answers will give
you your key results.

objective
The objective defines a big goal to be achieved (the
‘what’ or ‘where do we want to go’).

and key results

Key results measure progress towards the objective
(‘how do we know we’re making progress?’).

+ initiatives
Initiatives can be considered as the actual steps you
take. Put simply, your initiatives are a to-do list of how
you are going to achieve your key results.
 OKR EXAMPLE.
An example of an OKR for an HR/people and culture manager:

Objective:
Improve employee engagement

Key results:
1. Increase employee participation by 10% in the quarterly engagement survey
2. Increase employee satisfaction by 5% as reflected in the quarterly engagement survey
3. Leadership commit to 4 action items related to feedback
Communicate action items and leadership owners/champions to business through all-hands
meeting and internal newsletter by June 2020

Initiative:
Based on [Key Result, 2. Increase employee satisfaction by 5% as reflected in the quarterly
engagement survey] An initiative to help achieve this would be:
Brainstorm with key culture influencers what they want to see improved or introduced

Pro tip: Make sure you give yourself a timeframe to achieve your OKRs.
 WHY OKRS?
Team alignment.
Using OKRs effectively, you will be able to align and connect all your employees to your
company goals easily and efficiently. Your entire workforce will have visibility over the
company goals and how their team (and individuals) can contribute towards that.

Clear direction.
Because all your employees have visibility over company goals, it allows businesses to
give clear direction to every team as well as individuals about how they will be affecting
that and contributing to its success. This will, in turn, improve resource allocation and
management.

Increased productivity.
OKRs can increase productivity for every employee through a clear focus on business
goals. If an individual knows exactly what they are aiming for and can be recognised for
their efforts towards certain objective, key results or company goals, they will be more
productive and try harder! Boost individuals’ engagement and empowerment through your
goal-setting process.

Trackable.
Businesses can easily track the progress towards a particular business goal, especially if
they’re using tools like Employment Hero to manage their OKRs.

More insight for everyone.

Everyone in the company will be able to see exactly how goal progress aligns with the
company’s vision, strategy and top priorities. They will have better insights and visibility
across the business’ success and the areas that still need work.
 WHY DOES
EMPLOYMENT
HERO USE OKRS?

Alex Hattingh
Chief People Officer

The main reason we love using OKRs at Employment Hero is the

transparency to align every person in the organisation to the
company’s annual goals. With this method, each person can
develop their OKRs to make sure they align with what the
company is striving to achieve.

Key results go so much further than KPIs or a regular “task list” -

they have to be output-driven and metrics-driven. There are often
a lot of initiatives and to-do lists behind achieving a key result –
however, the key result is the output driving each person or team

OKRs are also hugely beneficial in structuring one-to-ones with

your employees as you can quickly cover progress or potential
roadblocks on particular OKRs. You don’t have to sit there and
recall an entire 12 months of achievements either, but instead, you
have a nice online method of capturing accomplishments and
outputs without onerous performance reviews.

Finally, we love using OKRs at Employment Hero because it helps

with complete transparency across the company. OKRs also drive
accountability across every team; anyone in the company can see
where and what any other team or person is working on at any
given time.
 OKRS VS. KPIS.

What are KPIs?

Key performance indicators (KPIs) have been the flavour of choice for performance management
for some time now. KPIs vary from role to role and goal to goal, but essentially, they are the
metrics that best define your success.  For HR, common KPIs can be absence rates or costs,
employee satisfaction or turnover rates. For business owners, KPIs are likely keeping track of
total profit margins, revenue growth rate or inventory turnover.

KPIs monitor individual performance for all employees. Take the aforementioned KPI of profit
margins, for example; a cashier isn’t going to be concerned with profit margins. Instead, their
KPIs might be the number of customers they serve over an hour or the results of a customer
satisfaction survey. KPIs identify areas that need improvement, but they rely on managers to
ensure that KPIs are kept top of mind. Because KPIs are individual targets, they can easily be
forgotten if managers don’t hold their team accountable.  

What are OKRs?

Like KPIs, OKRs also brings focus to the areas of the business that make the biggest difference.
Unlike KPIs, they are collaborative, operating on a company, team and individual level that
promotes transparency and accountability for all employees. 

OKRs switches the focus from results to aspirations or goals (aka ‘objectives’) that can be
achieved by fulfilling several important tasks (aka ‘key results’). OKRs require businesses, teams
and employees to define their desired destination, the achievements that will confirm (or deny)
their arrival and the time they must arrive by. It also requires companies, individuals or teams to
articulate what initiatives they will take to get there (yes, there’s another step not included in the
acronym, but OKRIs just doesn’t have the same ring to it!).

Remember; objectives aren’t measurable. They are a goal or aspiration that is attained by
completing the key results.
Should you use KPIs or OKRs?
So which is better? Well, we hate to sit on the fence, but the truth is both KPIs and
OKRs have their uses; you just have to know what to use when. OKRs are about
changing processes. Whether you’re troubleshooting a problem within the
business or wanting to grow and innovate, use OKRs as a strategic framework to
enact change. Your KPIs may help you decide on what the key results for new
objectives will be, but they aren’t part of the process.  Consider your KPIs as a
baseline; they indicate that everything is going well and there are no issues that
need to be addressed.

If your KPIs start to slip, that means something’s going wrong – you can use OKRs
to get back on track. After you identify an area of the business that needs
improving, it can become its own OKR.

For example, if an HR manager noticed that the company’s retention rates were
dropping, he or she could make their objective to encourage employee loyalty.

Key results could include:

1. Conduct weekly employee happiness surveys with a 50% participation rate 
2. Implement a peer to peer recognition program with over 100 individual pieces
of recognition over the quarter
3. Reduce turnover by 20%

Note that the objective (encourage employee loyalty) isn’t measurable, but the key
results are. An HR Manager would then break down the key results even further
into initiatives. For example for the first key result, 'Conduct weekly employee
happiness surveys with a 50% participation rate':
Research best employee engagement survey tools 
Make the business case for an employee engagement tool 
Launch surveys and communicate the ‘why’ to employees
Monitor participation 

Without monitoring the turnover rates, the HR Manager wouldn’t have

known a change was needed. The business would have lost more and
more staff. Turnover is expensive, so the more it happens, the more it
eats into your margins. Who wants that?
The problem with only using KPIs is that there is a lack of visibility. If
the CEO wasn’t meeting regularly with the HR Manager, and the HR
Manager wasn’t engaged enough to monitor their KPIs, the business
would have suffered. Using KPIs to accurately measure productivity is
only possible if employees and managers alike are on the ball. 

OKRs, on the other hand, are collaborative. Each employee should

have at least one goal that contributes to the team goal, and team
goals should have at least one goal that contributes to the company
goal. And because key results are assigned to owners, employees are
more accountable for their output. 

If you’re using Employment Hero’s Goals module, then anyone in the

company can view their colleagues OKRs, as well as the company-
wide goals.

This also improves employee engagement with the goals and vision
for the company easily communicated.

Not ‘either/or’, but both.

As you can see, comparing OKRs and KPIs is like comparing apples to
oranges. OKRs and KPIs serve different functions. KPIs measure
performance (or lack thereof!), whereas OKRs are a framework that
businesses can use to change processes or outcomes for the
better. Our take?

You should always keep an eye on your KPIs, but OKRs are your
pathway to growth.
 MAKING THE
MOST OF OKRS.
Start with your big hairy audacious goal (or 5-year plan!)
I can already see some of you scratching your heads, “what’s a big hairy audacious
goal?” you ask. A big hairy audacious goal (BHAG) is used to help your company reach
for the stars. Essentially a BHAG is a long-term goal that changes or defines your
business trajectory. We believe every company should have a BHAG that helps them set
a huge, awe-inspiring mission for the future. If your company isn’t there just yet, that’s
okay! Perhaps you can start by looking at your 1, 5, even 10-year plan for the company -
what do you want to have achieved by each point?

This will give you the best chance at setting aspirational objectives. An OKR describes
both what you will achieve (objective) and how you are going to measure its achievement
(key results). This makes OKRs a highly effective goal-setting technique. Being able to
make an accurate measurement is what makes a goal a goal. Without it, all you have is a
desire or vision.

Goals improve performance, but if you start spending hours cascading goals up and
down the company they are not as effective. It takes up too much time and it’s too hard to
ensure all the goals line up with one another. This is exactly why OKRs do not cascade in
that way and instead use a market-based approach. Goals simultaneously go bottom-up
and top-down. The company as a whole can set the strategic OKRs that each team can
use to draft their own, individual and more tactical OKRs. OKRs that are structured this
way will ensure that each team OKR is aligned with the company.

This OKR model improves employee engagement whilst also creating a better
understanding of company strategy across the board. By setting bold goals and making
sure all employees know exactly how they are contributing to achieving them, your
business is on the path to success.
Our advice for setting objectives and key results.

Objectives
Directional
Objectives tell you where to go (key results tell you how to get there!).

Make them memorable

Objectives need to be memorable and have qualitative descriptions of exactly what
you want to achieve.
 
Keep them brief
Objectives should be simple, short, inspirational and engaging. If you can’t fit the
entire objective into one sentence – you’ve gone too far! 

Inspire and motivate

Objectives should motivate and challenge the team. They shouldn’t be dull. Think
outside the box for ways to include your company culture in your objectives and add
a little bit of fun.

Examples of objectives
Marketing:
Create a high-converting landing page
Increase brand awareness

Sales:
Hit bookings target month on month 
Hit and increase revenue target by X%

Product:
Successfully launch feature release by X date
Improve overall app performance
Key results  
Measurable
Key results are a set of metrics that measure your progress towards an objective. Make
them quantitative and measurable with metrics that clearly show their progress.

Know your limits

Limit each objective to 2-5 key results, otherwise no one will remember them.

Make them achievable

Key results for an objective are vital for achieving the objective at the end of the quarter.
Make sure your key results are achievable in the time frame you have. 

Challenging
Go hard, or go home! Key results are where your OKRs denote ambition. When writing your
key results, try to make the metrics uncomfortable but also realistic.

Examples of key results

Marketing
Increase conversion rate to 10% on X landing page
Post 2x blog posts a week 

Sales
Close X% of deals in November

Product
Increase Apdex score to 0.8
Conduct 16 testing sessions with target users
 COMMON OKR
MISTAKES.
OKRs are not a to-do list.
Use OKR to measure if you are adding value, not if you are delivering tasks. You can create a
to-do list around how you will complete key results if this helps you break them down. But if
you start using OKRs as your to-do list, you might start feeling slightly disheartened at the end
of each day when you haven’t ticked much off.  OKRs run over entire quarters in most
companies and are bigger goal measurements than your Asana list or Trello board. 

Don’t set too many OKRs.

This mistake is a common occurrence in businesses. Your OKR list should be that quarter’s top
business priorities and the definition of what is most important during that quarter. If you start
creating too many OKRs, employees will start to feel disengaged, unmotivated and uninspired
by the incomplete list of growing OKRs. 

Make sure your OKRs are aligned.

The whole point of OKRs is to use them as a company alignment tool, so you should never set
your OKRs in isolation. You have to talk to the other teams in the business, all employees
individually and make sure all OKRs are connected to achieve the overarching company goals
or vision. 

“Set it and forget it".

The dreaded ‘set and forget’. Every businesses faux pas. OKRs are not New Year’s
resolutions; they are for the quarter not just for Christmas, so without regular follow-through,
you will never achieve them! Make sure you are regularly checking in with OKRs, monitoring
your achievements or where you can improve to reach them by the end of the quarter.
 OKRS ADVICE
FOR LEADERS.

As a leader – you must help your employees own their OKRs.

Remember OKRs are not a to-do list for your employees or harsh
targets and deadlines they need to meet. They are there to inspire
your team and make sure they know exactly how they can
contribute to your company goals. 

To do this, make sure you are being fully transparent with the
company OKRs, values and goals and then guide your employees
into how they can structure their OKRs in the same way.  This is
what we have implemented at Employment Hero HQ. Every
employee is empowered to set their OKRs and work out exactly
how they want to contribute to the company goals.

These are then reviewed in weekly one-on-ones with the

employee and their manager. Providing employees a sense of
ownership in this way keeps them more engaged, motivated and
productive in their working day.

It also gives them a massive sense of achievement and provides

more opportunities for recognition – showing them and the whole
business exactly how they contributed to the company’s success.
 OKRS NOW IN
EMPLOYMENT
HERO.
OKRs
get started.
Talk to a friendly specialist today about how
to get started with OKRs in your business.

info@employmenthero.com