The Pros and Cons of Individual OKRs
OKR (Objectives & Key Results) is an excellent way to connect strategy with execution on a company and team level. Some companies also let employees set individual OKRs to add an extra level below their team OKRs. Before you introduce individual OKRs to your organization or decide to continue using them, make sure you’re aware of all their upsides and downsides.
The pros of individual OKRs
They enable individual performance management
Some HR managers will bring up that individual OKRs are necessary to track employees’ performance. That’s, however, not an actual benefit because it’s not in line with what the OKR framework is about. OKR is not about individual performance evaluation. It’s about focusing employees, teams, and the entire organization on the work that delivers the greatest business impact. In a recent HBR article, Jay Van Bavel and Dominic Packer point out the problem with rewarding individual performers: “Leaders need to reward behavior that advances the goals of the organization, rather than the individual.”
Individual OKRs involve every employee
An obvious benefit of individual OKRs is that they make every employee part of the OKR setting process. However, there’s another way to involve everyone: many companies keep OKRs on a company and team level, but they let all employees set Initiatives. Initiatives are the things you do to achieve an OKR.
The cons of individual OKRs
Individual OKRs add complexity
Especially for companies new to OKR, it takes a while to get into a flow with the framework, usually a couple of quarters. With company and team OKRs in place, adding individual OKR adds an extra level of complexity and increases the workload for managing and updating them. People then see OKR as a chore, rather than a choice, and OKR programs can quickly fail. Therefore, companies like Spotify or Delivery Hero decided to focus on company and team OKRs only. In their blog post, Spotify explains why they moved away from individual OKRs:
“We noticed that we were putting energy into a process that wasn’t adding value. So we decided to ditch individual OKRs and focus on context and priorities instead. We make sure everyone knows exactly where we are going and what the current priorities are, and then we let the teams take responsibility for how to get there.”
They conflict with the purpose of OKR
As mentioned before, individual OKRs can move the OKR program away from what the original aim of the framework. They tend to slip into the realms of individual performance management. As a consequence, you will experience more resistance when implementing OKR. You also risk your team losing focus on the ‘bigger picture,’ or the ‘why’ behind the work people chose to focus on.
Individual OKRs are also often misused for project management purposes. It’s important to understand the difference between OKR and project management and how they work together.
They narrow employees down to the ‘how‘
If talented employees know the direction of their company and its purpose, they should have the freedom to handle what’s needed to get there themselves. Initiatives allow individual team members to focus on the “doing” involved in moving the needle on Key Results, rather than using individual OKRs for this. It’s much simpler and easier to manage.
Like Spotify and many others, Pangaea (the British cosmetics lab behind brands like Medik8 and Nanogen) ditched individual OKRs:
“We moved away from individual OKRs and focused just on company and team level. This has freed us to focus on Initiatives to support core objectives and pull teams together where individual OKRs encouraged this less.”
Should we set individual OKRs or not?
To conclude, most organizations are better off without individual OKRs. Usually, they over-complicate the OKR program and make it less likely to be a full success.
Exceptions prove the rule, and some companies that are already very experienced in OKR can derive additional value from having each employee set their OKRs.
However, we recommend to only think about using individual OKRs if you can answer the three following questions with ‘yes’:
- Did your organization complete at least four OKR cycles in a row without any notable obstacles or problems?
- Does the overall majority of your employees see setting OKRs as a valuable thing to do rather than a burden?
- Is the purpose of your OKR program, to focus employees and teams on the work that’s supporting the organization achieve its Ultimate Goal, known to all managers and employees?
Is one of the answers ‘no’? You’ll get the best out of an OKR program focusing on company and team OKRs. Complete them with Initiatives on an individual level.