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OKRs vs KPIs – What is better for your remote team?

KPIs are an integral part of the performance assessment process of an organization, but would they be equally effective with remote team? Would OKR be a better choice? learn more about OKR and the role they can play in a remote team.

OKRs vs KPIs - What is better for your remote team?

In 1999, John Doerr stood around a ping pong table at the Google office and introduced OKRs to Google’s leadership team.

Since then, Google has been formulating and implementing OKRs religiously every quarter.

In fact, Larry Page writes his OKR himself to the day.

OKRs have been a huge success in the corporate world and have revamped organizations’ perspectives about goals and achievements.

In the aftermath of the global Coronavirus pandemic, they have gained even more popularity with remote employees and distributed teams.

In this article, we explore the effectiveness of OKRs, why they are preferred over KPIs and how you can make them work for your organization.

What is OKR?

OKR is an acronym which stands for objectives and key results.

It is a broad framework which outlines key objectives and tracks their measurable results.

OKRs are collaborative, easily measurable and tie individual goals to organizational objectives.

They instill a culture of goal-setting in the work environment which enhances productivity and helps your team visualize the worth of their work.

In fact,  clear goals help in defining the roadmap of your organization’s success. 

 As stated by John Doerr in his book “Measure What Matters”, “Structured goals give backers a yardstick for success.”

Here’s an example of OKR for you to understand better –

Objective: Enhance brand value on social media.

Key Result: Increase social media engagement by 20% by the end of the month. 

But, what is the difference between OKRs and KPIs?

OKRs vs KPIs - What is better for your remote team?

Key performance indicators or KPIs are performance metrics that represent the outcome of an ongoing activity. 

From the reach of your social media campaign to the performance of your HR personnel, KPIs can help you measure the success of every organizational activity.

You could assign a KPI to every department, role or process of your organization. Here’s what a KPI would look like for the following –

Sales: Conversion rate

Customer Support: Average time taken to respond

SEO team: Number of page visitors

KPIs are a tool for measuring success and form an integral part of an OKR.

KPIs are the connector between an objective and a desired result. 

They focused on the individual strengths and micro results whereas OKRs encompass a bigger goal and clearly indicate how an employees performance contributes to the organizational objective

With OKRs, performance assessment has become goal-centric.

KPIs form an integral part of an OKR and show what needs to be done in order to achieve a particular end goal. 

Let’s carry forward the previous example to explain better –

Objective: Enhance brand value on social media.

Key Result: Increase social media engagement by 20% by the end of the month. 

KPI: Number of social media posts and average time taken to respond to a query

KPIs are great for understanding the capability and performance of your employees whereas OKRs are ideal for providing the right direction to the talent of your team.

Contrary to popular belief, KPIs and OKRs can coexist. 

In fact, they are essential to optimize the goal-setting process of an organization.

Let’s discuss how these metrics pull an organization forwards together. 

How OKRS and KPIs complement each other

OKRs vs KPIs - What is better for your remote team?

Let’s begin with an example. 

You want to start measuring the performance of your online support  support team. 

The management establishes that the average reply time should be 40 seconds. 

However, it is found out that the team takes 1 minute to respond. 

In order to improve the performance, your team now needs to set an objective and create strategies to achieve the results.

KPIs often act as the beginning point of the OKR setting process.

They indicate the goals that need to be set to improve the overall performance of an organization.

OKRs, on the other hand, show a complete outline of how performance can be improved using goals and action items. 

OKRs are also exceptionally efficient when it comes to remote teams.

They are transparent and help your remote employees why they’re expected to take certain actions. 

Besides this, there’re many other reasons for using OKRs for remote teams. Let’s discuss them in detail.

Why should you use OKRs for remote teams?

1 OKRs bring more transparency

Inculcating a culture of transparency in an organization is not a simple task even in a regular office-going work environment.

With remote work, employees start feeling even more alienated from organizational goals and often feel confused.

OKRs define the larger goal and how individual contribution can help in achieving that.

Remote employees do not have to put efforts into figuring out what is the leadership aiming at, what is expected from them and how their work will become a building block for organizational objective

2 OKRs help in focusing on results

Setting OKRs requires a top-down approach wherein the leadership decides upon the key objective for the organization and then, proceeds to determine the key results.

They help in bringing the focus back to what matters for growth and how it can be achieved with consistent efforts.

In a remote team, the ultimate goal can get lost in between all the chaos of communicating and assigning duties.

A simple exercise of setting OKRs for the team and individual remote employees can lead you to silence the peripheral noise and concentrate on your end goal.

Pro tip: You can use OKR software to help you initiate the process of setting OKR with its templates and guides.

Keep your remote teams aligned with one-of-its-kind OKR software

 

3 OKRs tie productivity with end goals

One of the biggest challenges of shifting to remote work has been the inability of tracking the productivity of remote employees.

In a traditional work environment, managers and leaders are habitual of working with a team present in the office 24/7.

You can witness their hard work and reprimand if you think they’re being careless about their work.

However, this has led us to believe that productivity is equivalent to the time spent in the office.

OKRs vs KPIs - What is better for your remote team?
Source: https://www.perdoo.com/

In remote work, you cannot expect your team to always follow a strict 9 to 5 routine.

Especially during the pandemic, your remote employees have more responsibilities.

With OKRs, you learn to focus on the output your employees are churning out instead of the amount of the time they spend on a task.

Eventually, OKRs help in minimizing redundancy and make your team shard, focused and detail-oriented.

4 OKRs discourage micromanagement

Micromanagement is the biggest threat to your relationship with your remote team.

When you micromanage your remote employees, you create an impression of distrust and low faith.

This attitude may even cause low morale among remote employees.

However, when you set OKRs and follow-up on them at regular intervals, you will feel no need to keep a constant check on your remote employees.

In fact, your remote team will also have a clear roadmap of their expected behavior and a tentative timeline for delivery with OKRs.

5 OKRs encourage communication and engagement

OKRs tie your entire remote team with a common goal and bring a sense of community.

Every employee feels connected with their colleagues and has clarity on their role and responsibilities.

They know who to reach out to in case they face any roadblock and reorient themselves if they start losing sight of their main aim.

OKRs initiate conversations and keep remote employees in touch with their entire team

Summing up:

OKRs are agile, flexible and performance-centric – this is exactly what you need to manage a remote team effectively.

They help in defining context and provide meaning to the tasks of employees that can start feeling monotonous and routine in a work from home setup.

Moreover, stalwarts like Google and Intel swear by the benefits of OKRs.

If you doubt our assessment, we are sure you will believe in what they stand by – OKRs.

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All-in-one engagement & performance platform for remote teams.