OKRs vs SMART Objectives for Performance Management

Aug 8, 2023 | Performance Management Discussion

OKRs vs SMART Objectives


In this frank and revealing discussion, we look at OKRs vs SMART Objectives. Specifically, their utility when it comes to employee performance management.

Almost all performance management processes include setting and reviewing employee performance against their objectives. And again, almost always the use of SMART objectives is encouraged. (Specific, Measurable, Attainable, Relevant and Time-bound).

But then OKRs came along. OKRs, or Objectives and Key Results, have been championed by tech giants like Google and Intel. The concept is simple: set ambitious, qualitative objectives and then measure progress using quantitative key results. The beauty of OKRs lies in their flexibility and adaptability. Unlike traditional goal-setting methods, OKRs encourage teams to set ambitious objectives that push the boundaries of what they think is possible.

We’ve explained SMART objectives before. And we’ve explained OKRs before. But we’ve not talked about OKRs vs SMART objectives. Until now that is..


Why We Need Personal Objectives in Performance Management?

Personal objectives are an essential component of performance management for several reasons. Firstly, setting performance objectives allows individuals to have a clear understanding of what is expected of them and what they need to achieve. This clarity helps employees stay focused and motivated, as they have a specific target to work towards. Additionally, personal objectives provide a framework for evaluating performance and progress. By setting measurable goals, individuals can track their achievements and identify areas for improvement. This enables them to receive feedback and recognition for their efforts, which promotes a sense of accomplishment and drives continuous growth. Moreover, personal objectives help align individual efforts with organisational goals. When employees have clear objectives that are in line with the company’s strategic priorities, they can contribute to the overall success of the organisation. In conclusion, personal objectives play a crucial role in performance management by providing direction, promoting growth, and fostering alignment between individual and organisational goals.

SMART Objectives fulfil this need perfectly well. But then came the new kid on the block – OKRs.


If SMART Objectives Do The Job, Why Look At OKRs?

Well, OKRs, offer a different approach to goal-setting. Unlike the traditional SMART objectives, OKRs allow for more flexibility and adaptability. With OKRs, teams are encouraged to set ambitious objectives that push the boundaries of what they think is possible. By focusing on key results, progress becomes measurable and transparent. This promotes a sense of accountability and drives teams to strive for excellence. Plus, OKRs provide a clear framework for measuring success and progress towards goals. While SMART objectives have their merits, OKRs offer a fresh perspective and can be a valuable tool in driving growth and success.

They are also very tempting operationally. It looks like a framework that is simple to use and increases productivity. Set ambitious results and get more out of your employees – right?


Well, not quite. There are a few problems..


Problems With OKRs


They can be confusing to the average employee

Let’s start with a very practical problem. When you create a performance management tool like PerformanceHub, you need to build into that tool an ability to set, track and review objectives. PerformanceHub does just that. We would say that it does it really well, especially the way that PerformanceHub visualises the objective cascade. But enough blowing our own trumpet, what about OKRs?

We considered supporting OKRs in the past. Like many others, we read the book “Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs” by John Doerr. After reading it, we pencilled out a way to follow the guide in PerformanceHub. But, no matter how we tried to design support for OKRs, it always turned out to be a little complicated. We worried users would get confused, and we’re super careful to make sure PerformanceHub is easy to use. At that point, we decided to park the project and wait for a prospect to ask for the feature.

Soon prospects and customers started to ask for OKR support. Time to dust off our designs! But we soon hit the next hurdle..

Everyone has a different idea how to implement OKRs

Well, this is interesting! Every customer or prospect we spoke to had a different idea of what OKRs were. And how they were going to use them in their business. How can that be? We’ve all read the same books after all.

It turns out that, as good as the framework looks on paper, practically speaking, you have to make a few compromises. And people were compromising in different places. Even within the same organisation. That’s not good when you are trying to create a performance management tool lots of different businesses will use. Even if you added configuration items to allow fine-tuning by customer.

No matter, we spent time designing and discussing what the OKR feature should look like. We planned to make a start on implementing it in the 2nd half of 2018. Until that is, something unexpected happened..

People lost interest in OKRs

Yes, you read that right. Before we implemented a solution, new prospects stopped asking about OKRs. And the prospects we were talking to simply started to use PerformanceHub’s SMART objectives feature.

By 2020, almost nobody mentioned OKRs. Now, in 2023 it’s very rare for any prospect to mention them. If they do, I always ask how they have implemented OKRs and to this date, I have never got the same answer twice.


Why Have OKRs Lost Their Shine In Performance Management?

Well, I think that it comes down to the fact that SMART objectives do the job perfectly well. Remember, we’re talking about performance management here. How YOU are measured on YOUR performance and the impact that might have on YOU. They are easier to create, manage review and for employees to get their head around in general.

Also, remember that OKRs are supposed to be ‘stretch objectives’. The methodology suggests that 20% of key results can be missed, and the objective still be considered delivered. People just don’t want that sort of ambiguity when it comes to personal performance reviews.


Concluding The OKRs vs SMART Objective Battle

In conclusion, when it comes to performance management, SMART objectives are the way to go. Unlike OKRs, SMART objectives leave no room for ambiguity or confusion. They provide a clear framework for measuring individual performance and its impact on overall success.

If you want to maximise your performance and achieve your goals, I urge you to check out the SMART objectives in PerformanceHub. By utilising this powerful tool, you can set attainable objectives, establish realistic deadlines, and track your progress towards success. Don’t leave your personal performance to chance – take control and make sure you’re on the right track.

Remember, compliance with the rules is crucial. So, what are you waiting for? Take the necessary steps to improve your performance and achieve outstanding results. Choose SMART objectives and watch as your profits soar and your personal growth reaches new heights. Don’t settle for mediocrity when you can aim for excellence. Start utilising the power of SMART objectives today.

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