What is the difference between annual performance management and continuous performance management?

What is the difference between OKR and KPI?

KPI or Key Performance Indicator measures the current operations i.e. Business As Usual. OKRs or Objectives and Key Results point to the North Star or what you want achieve.

How many types of OKRs are there?

OKRs are of 2 types - 1) Committed 2) Aspirational.

1. Committed OKRs are the ones the team agrees that they will be achieved 100% despite minor setbacks in terms of schedules, resources and planning.
2. Aspirational OKRs address future state vis-a-vis the current state by asking "what could we do if we have extra resources and time"?

At what level should OKRs be set?

OKRs are typically set at 3 levels and are aligned vertically and horizontally. The three levels are

1. Organisational - these are company level objectives
2. Team - these are at a team or department level and are typically aligned vertically with company level or horizontally with other teams or departments
3. Individual - these are at individual employee level and are typically aligned vertically with team OKRs. In exceptional cases, individual OKRs can be aligned with company level OKRs.

How many OKRs should I set?

Typically 3 to 5 OKRs per quarter or 5 to 7 OKRs per half year should suffice.

Is alignment must for all OKRs?

Alignment is an important and integral part of OKR process. According to a Harvard Business Review, companies with highly aligned employees are more than twice as likely to be top performers. However, 100% alignment is difficult and rate to achieve. According to a poll of global CEOs, lack of alignment is the number-one obstacle to execute a growth strategy.

John Doerr, in his book "Measure What Matters", says, "High performing teams thrive on a creative tension between top-down and bottom-up goal setting, a mix of aligned and unaligned OKRs."

Whilst 100% autonomy is utopian, a 50-50 mix of top-down and bottom-up goals help teams innovate and thrive.

Can OKRs be carried forward from one performance cycle to another?

OKRs can be carried forward to next cycle mostly as an exception that as a rule. The central idea of OKRs is if they are set properly, they should be completed within the cycle.

Can OKRs be dropped or changed during the performance cycle?

OKRs are tracked several times during the cycle so that surprises can be avoided.

During such tracking it is possible that some OKRs have outlived their utility although this applies more to KRs than Objectives. Thoughtfully set objectives rarely implode within a quarter or a half-year.

When a OKR is consistently in red zone i.e. falling behind, it can be dropped. However, before dropping any OKRs, the team should reflect as to what they could not foresee at the time of planning the OKRs and how they can apply this learning in the future.

Also, the team should communicate to everyone whose own OKRs are depending on it.

Can I see OKRs of any other colleague?

Yes, you can see OKR of any colleague. Transparency is the central tenet of OKRs and it helps in building horizontal alignment.

What is Sandbagging?

Sandbagging is a process by which the team is setting OKRs that are just good enough and can be achieved within the cycle.

OKRs provide a unique opportunity to be extremely focussed, innovative and creative, for achieving breakthroughs to win in the marketplace.

Managers should encourage team members to pick up 1-2 aspirational OKRs. It is okay to not achieve 100% of an aspirational OKR. In fact, if someone is achieving 100% of the aspirational OKRs, they are effectively sandbagging.