I’m a Director of Software Engineering and we use OKRs at my company. I’m really liking the framework! Our biggest question is: How do we rate a software engineer’s performance against the team’s OKRs? Does the individual software engineer have individual OKRs, or do I rate their performance based on their contributions/impact to the OKRs? Hope my question makes sense.
Thanks for writing in and for your terrific question. It might sound confusing at first, but remember that individual OKRs still represent collective commitment. While OKRs and performance are related, we never recommend linking them directly to individual reviews. Here are a few reasons why:
OKRs are not the sum of all things. They’re not meant to capture every action or responsibility of an individual, nor are they a job description. Performance reviews are meant to evaluate a team member on their job in its entirety. There will be many elements of a team member’s job that won’t directly impact OKRs, and it would be unwise to judge them solely on this basis.
A team member can be great at their job and fall short on their OKRs. OKRs are meant to stretch teams to their fullest potential, and learning from failures is an invaluable aspect of the process. For example, many teams find tremendous value in achieving only 70% of an aspirational OKR, which, on a grading scale would be a C-. Does that mean those team members are C- employees? Not necessarily! Though the results of the OKR may only be C-, the work the employee put in and the value they added to the company could very easily garner them an A+.
Contribution to OKRS will vary from team member to team member. As OKR ownership is voluntary and should be taken up by whoever’s best suited to it, the work that goes into OKRs will not always be evenly distributed. Some team members might own two to three Objectives, others one or two KRs, and others may just contribute with their work. Evaluating team members solely on their contributions to OKRs doesn’t seem like a particularly fair system.
If a team member fears consequences for not achieving their OKR 100%, it defeats the purpose entirely and can end up working against you. This is why we strongly discourage leaders from tying compensation or promotions (generally end results of evaluations) to OKRs. The “hit the benchmark… or else!” environment often forces team members to switch into survival mode and their focus will shift from the good of the team to the good of the individual. For example, say a team leader brings in more sales than was projected in their OKRs, but achieves it by being a poor or overly controlling manager. The OKRs may look great, but overall, the employee performed poorly.
Sure, OKRs can be part of evaluation conversations, but avoid making them the main focus. OKRs are, above all else, about collective commitment. If OKRs become about holding individuals accountable, or the main factor evaluating a person’s performance, you’ve strayed from their purpose. We recommend evaluating your employees through a much more holistic lens.
Thanks for writing in, Kevin, and best of luck to you on your OKR journey.
Billy from the What Matters Team