How OKR Changes the Performance Review Process

OKR Changes the Performance Review Process

OKR Changes the Performance Review Process

For some time, annual performance reviews and assessments have been losing favor and efficacy. When managers and employees perceive the process as time-consuming, subjective, and useless, performance reviews do nothing to encourage and improve individual performance. Just like the majority of the leaders out there, if you, too, are frustrated with your current performance review process, OKRs (Objectives and Key Results) will come to your rescue! 

The OKR management framework is a goal-establishing and managing methodology that establishes, communicates, and monitors goals in an organization to ensure that all employees are pulling in the same direction. OKRs, when used correctly, can streamline and increase team and organization performance.

On the other hand, goal management is a technique organization have been utilizing for just as long and are refining the process to be more relevant and precise. OKRs first appeared in the business world in the mid-twentieth century but have since been widely popularized and adopted by many businesses across all industries as a valuable tool for setting aggressive goals while allowing for agility and adaptability in the fast-paced nature of business today. Smart firms are figuring out how to combine the two ideas to create performance development programs that are influenced by business goals while also allowing for autonomy, transparency, and adaptability across individuals, teams, and the organization as a whole. OKR software enables organizations to be more adaptable as challenges, roadblocks, and major changes arise throughout the year.

Impact of OKRs on the performance review systems

Thanks to OKRs, the performance review systems have undergone drastic changes in the last few years. Organizations are bidding adieu to traditional and rigid performance management reviews in favor of a more agile and relevant method of performance reviews.

  • Appraisals are too subjective, relying on the opinions of one or a few individuals who may or may not have a clear image of the individual’s performance or grasp of their function. 
  • Cadence is too infrequent, which means that much time passes between evaluations, and only a small portion of the talk is retained and applied to the individual’s work.
  • Issues are frequently held until the review, meaning remedial dialogues occur too late after the incident has occurred, and conversations have little relevance at the time they occur.
  • Employees feel separated from their superiors throughout the year and receive little help. 

As the workplace dynamic shifts and work styles shift from older to younger generations, these formal, infrequent conversations make less and less sense for effectively developing talent in the right direction that meets an employee’s ambitions and motivation while aligning with organizational needs.

OKRs and their impact on the performance review systems

OKRs are a cornerstone of performance management but not the entire structure. They help influence an organization’s direction but do not fully represent an individual’s efforts. Performance management should begin with a discussion on OKR performance but should also include non-OKR role completion, relationships with team members, and long-term career objectives.

OKRs can pave the way for an effective performance management system because their frequent review and aspirational nature encourage participation and inventiveness. They aid in the assessment and adjustment of performance expectations in real time. No wonder organizations left, right and center are chucking those annual performance reviews to reap the top advantages of the modern approach. OKR-based performance management focuses on goal accomplishment and keeps everyone in your organization focused on their objectives, eliminating the need to relate performance management to compensation.

More frequent reviews

Forget about defining annual goals and conducting performance reviews at the end of the year. OKRs are often reviewed every quarter or month, depending on the business’s adaptability required by the business. This system is far better adapted to today’s fast-paced environment when rapid change is the norm. This frequent evaluation of performance ensures that valuable feedback is shared between you and your employees. This improves communication among your employees, their team members, and management.

Engaging process

As you know, most of your employees despise annual performance assessments since they are associated with a lot of work and negative sentiments. Furthermore, the sole emphasis on numerical ratings encourages the impression that one is merely a cog in the wheel. Finally, timely acknowledgment and praise are frequently overlooked. Contrarily, the OKR management framework works like hitting multiple birds with one stone. As the OKR software helps you conduct continuous performance reviews, you have an agile approach that makes the process more engaging. Most importantly, your employees look forward to these reviews. 

Prompt feedback

Employees thrive on quick and meaningful feedback as it is more helpful for them to continue improving. Keeping feedback under wraps for long periods after an event and saving it for the end-of-year chat is counterproductive and causes unhappiness among your managers and employees. This is where the OKR program and continuous performance management review come into the picture. Employees no longer have to wait till the year-end to receive feedback and insights, which won’t help improve them much, isn’t it? By having an OKR program, you get a platform that allows anyone to give feedback in real-time, making feedback very critical for the manager and the employee. 

Do you still have any more doubts about how OKRs influence the performance review process? Book a consulting call with our experts today!


1. How is the continuous performance management approach better than the traditional approach?

The continuous performance management approach is a more people-focused approach used to assess, improve and drive organizational performance. It has multiple advantages over the traditional approach – it is more cost-efficient, flexible, agile, and focused on employee development. 

2. Can OKRs be considered while structuring the compensation of the employees? 

Never commit the mistake of linking OKRs and compensation. These are very different conversations, as OKRs are always about the organizational objectives and are often ambitious, and should never be linked with the compensation of your workforce. 

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Gaurav Sabharwal


Gaurav is the CEO of JOP (Joy of Performing), an OKR and high-performance enabling platform. With almost two decades of experience in building businesses, he knows what it takes to enable high performance within a team and engage them in the business. He supports organizations globally by becoming their growth partner and helping them build high-performing teams by tackling issues like lack of focus, unclear goals, unaligned teams, lack of funding, no continuous improvement framework, etc. He is a Certified OKR Coach and loves to share helpful resources and address common organizational challenges to help drive team performance. Read More

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