Understanding OKRs: Best Practices and Benefits

by Chandler Barr May 13,2022

The People Strategy Leaders Podcast

with Srikant Chellappa, CEO

Occasionally, you hear about organizations gaining popularity owing to their performance and achievements. However, the real story of how they got there is rarely told. To elaborate, some of the most recognizable brands, like Google, Apple, and Amazon, began with objectives and they all had one commonality: they all used the OKR (Objectives and Key Results) approach or OKR best practices.

When properly enforced, the OKR framework aligns organization, team, and employee objectives with quantifiable outcomes.

According to Google co-founder, Larry Page, OKRs have the potential to lead to “10x growth” in the long term.

OKRs are a straightforward yet effective method for establishing objectives and monitoring progress. Techniques that other businesses have tested and improved should also be beneficial to your company — when you follow the tried-and-tested OKR best practices.

Continue reading to understand the best practices of OKR for your teams! Managers and executives may use OKRs to enhance accountability, openness, and alignment of objectives with performance in their businesses.

Differentiating factors of OKRs and their effectiveness

Setting goals, a fundamental component of every performance management strategy, assist organizations in increasing their productivity. OKRs are a common goal-setting framework that organizations use to establish and monitor achievement at various organizational levels. OKRs foster creativity, unify teams and establish a clear roadmap for organizations to reach the next level when applied successfully.

Most often, OKRs are specified quarterly (a 3-month cycle). Andy Grove, “The Father of OKRs,” created this framework in the 1970s. Later, Google applied this structure with great success and saw exponential growth. Thousands of enterprises, from Apple to Amazon and the United States Navy, use OKRs today.

OKR structure framework’s primary objective is to align employees, working company-wide, to direct their efforts toward clearly stated objectives. OKRs apply on a global, department, workgroup, and/or team level.

Also Read: The Ultimate Guide To OKRs And Templates

Why do most organizations prefer OKRs?

OKR best practices provide a tangible method for measuring progress. In addition, they provide the flexibility to fulfill your goals. They enable you to concentrate on outcomes rather than micromanaging the execution of activities.

Other important reasons for employing OKRs include:

— Improving collaboration by aligning individual efforts with shared objectives

— Increasing employee commitment and motivation.

— Enabling managers to provide effective performance evaluations and constructive criticism.

Also Read: Have You Set Effective OKRs For Your Customer Success Team?

OKRs’ approach to driving business success

Companies can utilize OKRs in five fundamental ways to manage performance:

  1. Arrangement

OKRs ensure every employee understands what agendas and objectives teams are working on; their purpose, and how they can contribute to the company’s success.

  1. Establishing priorities

OKRs fill the void between high-level objectives and everyday tasks. This provides employees with the ability to prioritize daily chores and long-term ambitions.

  1. Openness

OKR best practices build transparent organizational cultures by apprising everyone, from the CEO to the intern, about the priorities and goals of multidisciplinary teams.

  1. Accountability

OKRs outline the responsibility and goals of each employee and eliminate any ambiguity about who is accountable for achieving certain objectives.

  1. Trust and confidence

OKRs allow employees to see the results of their efforts and feel in control of their own progress.

Are the objectives and the key results the same?

No, the objectives and the key results differ in concept and definition. We have described each of them individually so that you can get a better understanding of them.

  1. Objective

An objective is a desired accomplishment and hence, conveys the “what” has to be achieved by employees. By nature, thus, an objective is both decisive and realistic. It is measurable, distinct, and should be obvious whether a goal has been achieved. Most significantly, an objective must provide unambiguous and specific value to an organization. 

  1. Key Result

A Key Result is associated with an objective and offers an understanding of how well an organization is performing and whether it is on the intended track to meet its objectives. It’s a measuring stick for the milestone or the target (objective). An objective should preferably include no more than five key results.

An example of differentiating objective and key results for a marketing team is:


Increase market growth, compared to Q2, 2021.

Related Key Results:

  • Expand lead generation pipeline by 15% 
  • Increase email marketing campaigns by 2X
  • Increase social media read by 3X
Also Read: What Are Objectives And Key Results (OKR)?

A step-by-step implementation guide of OKR best practices

Setting objectives is not a one-size-fits-all approach. To implement an OKR management framework successfully, an organization must plan out a variety of processes before, during, and after implementing the OKR checklist. Given below are some step-by-step guidelines for implementing OKR practices.

Goal, vision, mission, and strategy

In order to get the most out of an OKR program, organizations need to clearly understand their goals, mission, vision, and business strategies. OKRs should be based on your goals and business strategies; serve as a vehicle for fulfilling your vision, and be consistent with your overall mission statement.

Make sure the OKRs are simple

Ensure that OKRs are simple to understand and achievable. Too many objectives may make prioritizing and implementation difficult. Hence, begin by making OKR objectives separately for an organization and its teams. Ideally, each team should have a maximum of five objectives and three Key Results per objective.

Familiarizing employees with best practices of OKR

The ability to establish goals is a taught rather than being an intrinsic talent, thus, organizations must offer employees with sufficient directions on how to set achievable OKRs. Workshops are an excellent tool for helping newcomers to get familiarized with the OKR process.

Analyzing essential elements before developing OKRs 

The business environment of an organization should define its methodologies for achieving objectives. Before developing OKRs, businesses should analyze several facets of their day-to-day operations, including headcount, management structure, and business processes.

Employee Participation

Occasionally, it may not be possible to include every employee in every step of the OKR-setting procedure. Employees should understand who is accountable for defining and monitoring OKRs at each level; which projects and KPIs they should prioritize; why the company is implementing a new goal-setting process, and how their work relates to the business.

Allow employees to contribute to the development of their own OKRs

Empower employees to actively participate in their own OKRs in order to foster autonomy. This may enable individuals to concentrate on initiatives that pique their interests; maximize their skill sets and advance their careers. Their supervisors may help ensure alignment with departmental and corporate OKRs, as well as fulfilling business requirements.

Defining OKRs in advance before each quarter

Start establishing OKRs prior to the beginning of the quarter, particularly company-level objectives. Developing team OKRs may also require significant work, preparation, and consensus. 

In addition, you will need time to outline the strategies and programs that you will implement to achieve success on the Key Results. It is ideal to prepare OKRs two weeks before the beginning of the quarter. This way, you will be prepared when the OKR cycle begins.

Integrating Departmental OKRs with Organizational OKRs

OKRs for a specific department are distinct from those for the whole organization. However, they must align to support the organizational objectives to produce optimal outcomes. You can start working as a team today by using Engagedly’s solution (OKR/Goal Alignment platform), which offers you the best functionalities and ideas to create OKR for both department and organization.

Dedicated goal tracking software to maintain the quantitative nature of OKRs.

Tracking OKRs may be a difficult procedure for businesses of any size. To keep OKRs transparent and quantifiable, you may use a goal tracking software, which includes OKR performance evaluation tools and a specialized goal-tracking program.

Also Read: Know Why Your Organization Should Start Using An OKR Software
Evaluating OKRs through a grading system

Grading is the method through which organizations assess OKR performance objectively. OKRs are scored on a scale, ranging from 0.0 to 1.0. Each key outcome is rated, and the average of those grades is used to determine the grade for each goal.

If an employee consistently receives a perfect score on your OKRs, create more challenging objectives. Similarly, if an employee frequently scores less than 0.3 on your goals, it may be time to revise your objectives and key outcomes.

Sharing Developments

Meetings to review OKRs are crucial. Every quarter, employees, managers, and higher management should meet to review OKRs achievement, established at the beginning of the previous goal cycle. Managers’ review of feedback and management of direct reports should include OKRs in their one-on-one sessions.

Reward your employees for achieving OKRs

Reward your team after they have successfully met their OKRs at the end of a quarter since recognition is more like positive reinforcement. However, note that OKRs work as an efficient tool for goal alignment than for employee performance appraisal. Use OKRs with other assessment elements, such as agile metrics and workplace behavior, to analyze team success.

Analyzing to get insight and make corrections

Grading is an objective assessment, while learning is the process of examining success and failure within the OKR cycle. Evaluation of OKRs should occur often, but each cycle should also involve a more in-depth analysis of what went well; what did not go well, and what lessons may be transferred to the following cycle.

Top advantages of adopting the best OKR practices

  • Determine how the planned progress aligns with the mission, vision, strategies, and key objectives
  • Align and link your employees to your organization’s objectives
  • Make better judgments that are more effective and well-founded
  • Provide each team and employee with clear guidance
  • Increase productivity by concentrating on your objectives
  • Analyze the underlying reasons why goals are not met and work on them with the corrective measures
  • Enhance allocation of resources and their efficiency
  • Achieve transparency, accountability, and clarity.
  • Utilize weekly updates to gain perspective and understanding
  • Measure regular progress toward objectives
  • Manage accomplishment and execution with increased responsibility and transparency
  • Your goal-setting approach may help employees to feel more empowered and engaged
  • Enhance executive-level visibility and openness across the company
  • Establish clear and explicit objectives
  • Identify and document cross-functional linkages across teams

Summing up:

The OKRs framework is a potent instrument for assisting organizations in defining objectives and the corresponding quantifiable activities. Here are some concluding recommendations for making OKRs work for your organization:

  • Keep your OKR checklist simple and adaptable
  • Use the lessons learned from previous OKRs to iterate, design, and build new OKRs.
  • Establish OKRs periodically – preferably quarterly, or set OKRs at least every six months.
  • Ensure OKRs are aspirational, quantifiable, and transparent
  • Use technologies that facilitate and prioritize OKR tracking

To understand more about OKR best practices or how Engagedly software can enable you to better organize, measure, and accomplish your objectives, check out its features and book a demo. You can chat with one of our OKR specialists about your organization’s OKR or management requirements. 

Want to know how Engagedly can help you manage your hybrid employees better? Request us for a demo.

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Chandler Barr
VP of Sales

Chandler Barr is the VP of Sales at Engagedly and is focused on driving a culture of progress over perfection in a no-fault environment where employees are secure and encouraged to think creatively to solve problems. Chandler is a seasoned leader that has scaled sales teams for SaaS startups and multibillion-dollar publicly traded tech companies, as well as, led Marines to accomplish the mission during hardships overseas.

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