OKRs for Employee Perfomance

The current realities and thinking, including OKRs (Objectives & Key Results, like at Google), the abundance of (big) data, the faster pace of business in 2021 than 1962

It is time to pull our support to employees out of our 1962 models of Job Descriptions, Annual Employee Performance Review, etc. The current realities and thinking, including OKRs (Objectives & Key Results, like at Google), the abundance of (big) data, the faster pace of business in 2021 than 1962, and significantly higher levels of employee education and cognitive capabilities, we can do better.

Modernize your Balanced Scorecard to Engage Employees

78% of business leaders rate employee engagement as the urgent and important issue. Forbes says that "engaging people well" is becoming one of the biggest competitive differentiators in business.

You have what it takes...

The interesting thing is that most organizations already have the foundation for engaging employees - your Balanced Scorecard for employee performance. After all, your balanced scorecard captures your strategy and translates it into operational terms.  What if we took your scorecard two small steps further -

  1. Break the strategic goals into quarterly Objectives, and
  2. Assign clear accountability to individuals and teams

...so that everyone knows what they need to get done and by when.  

Daniel Pink in Drive: The Surprising Truth About What Motivates Us, calls this "Purpose". Purpose is the first of three intrinsic rewards that is required to motivate and engage employees.

Now comes the magic part

What if people earned more "strategy points" by making greater progress on more important activities? They could now see, day-to-day / week-to-week;

  • Where their priorities are (i.e. organizational alignment from the top to the bottom...or the bottom up to the top!).
  • How they were contributing to the organization, allow people to feel rewarded for their activities.
  • How to self-manage themselves, making sure they spent their time and efforts on the things of most benefit.
  • Who to work with to achieve cross-functional objectives - removing the 'silos' from any organization.

This also changes the performance conversation - no longer do you need annual employee performance reviews...Now you can have more frequent, less formal conversations with individuals, across teams and around the world.

These strategy points allow people to attain Mastery, the second intrinsic reward that Daniel Pink talks about. Daniel argues, like with on-line gaming, that this sort of feedback is enough to engage employees, but you could also use these points to reward employees - such as "leveling up"... the right number and combination of points could allow someone to take on a larger project, maybe sit in on an Executive meeting, etc.

Autonomy

The last important part is… give the employees and teams the autonomy to get their jobs done.  Just so long as they know what they need to do (Purpose) and they have the skills and resources to get the job done (Mastery), they can use your modernized scorecard to track their progress and self-manage towards success.

What Should be on the Employee Scorecard?

Strategy Points

At Hirebook we use the above mentioned approach to determine Strategy Points... Activities are assigned as "Strategy Points" based on a formula that scores each Activity's impact on weighted Strategic Goals. An Objective with lower strategic impact might earn, say 50 points. A high impact project might earn, say, 257 points.

Role

Based on your role, you can earn a percentage of the Activity's points. Think of RACI (Responsible, Accountable, Consulted, Informed). If I am Accountable, I earn 100% of those points. If I am Responsible, I earn, say, 80% of those points.

Target

What we expect to achieve this quarter. In theworld, this is the metric associated with the Key Result. Think of S.M.A.R.T. measures. Some targets are found in your business plans, financial plans, or sometimes just in leadership's head!

Performance

Performance for any Activity has two key dimensions: Progress and Performance. Progress tells us how close you came to completion (e.g. I am Bordering Completion... 90% of the way done ). Performance is a reading of the quality of work done (e.g. We have 98% first-call resolution of trouble tickets). Not all Activities have both types of metrics. All metrics are compared to the target. In cases where an Objective has more than one metric, the employee performance is based on an index of them.

The Shopping List of Possible Elements on the Employee Scorecard

At any time an employee / their team / their manager should be able to see:

Performance by Objective

How well am I doing against the target? Number of Strategy Points earned vs. number of Strategy Points available for that Activity.

Performance by Role

How well am I doing across all the Activities for which I am the "Accountable" person? Separate from that on the employee scorecard metrics, how well I am doing across all the Activities for which I am one of the "Responsible" people?

Overall Performance Score

How well am I doing across all my Activities, weighted by my Role in each of those Activities. ( "Accountable Score" * 100%) + ("Responsible Score" * 80%) + etc.

Speed (or Velocity)

How many Strategy Points have I earned over this period (week, month, quarter).

Efficiency or Work

How many Strategy Points have I earned vs. resources used to earn those points. e.g (Strategy Points Earned) / (# Accountable and Responsible people involved).

Power

The rate at which progress is made.... Technically {(Unit of Work)/Time}. In this case we would use Work / Period (week, month, quarter).

Flow ("In-The-Zone" time)

"Flow" has some hard definitions to it (for more read Wikipedia or watch Mihaly's TED talk) My summary of Flow is... How much time at work are you "in the zone"? How much are you wholly invested in the present activity? If the challenges of your work are below your capabilities, you will be bored. If the challenges of your work exceeds what you have the capability of completing (either because of skills or capacity), you become anxious. The sweet-spot is the right mix of challenges for your capabilities.

We can measure flow with a combination of the above metrics and two survey questions for the employee.

Employee Engagement Scorecard

An index that expresses the "stickiness" of your work. We can measure engagement by looking at the on-going progress made across some of the above measures.

I have a dream where each employee can clearly see what they need to accomplish, their role, the timing, the outcomes, who is going to work with them, etc. And they can get feedback - performance views, an overall score… and a bunch of interesting statistics. When you use Hirebook, you and your team have access to a dashboard that shows the progress made in different tasks, objectives and how they Take advantage of our software and lead your team towards success!




Brett Knowles

Brett Knowles is a thought leader in the Strategy Execution space for high-tech organizations. His client work has been published in Harvard Business Review, Forbes, Fortune, and many other business publications.

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