Why use OKRs?

The Objectives and Key Results (OKR) process can help boost performance incentives, as it's a measure of how people achieve goals and contribute to the success of the team or company.

Some managers believe that OKRs should be separated from incentive systems to prevent unpleasant behaviors among team members or result manipulation.

However, this is an easy problem to solve, as today, monitoring performance within the company can be done securely and transparently through process automation.

Stratec's Individual Performance software, for example, allows for the control and analysis of profit-sharing programs by.

With this system, everyone can see the action plan for the indicators that have not met their goals, meaning who is doing what to achieve the goals, generating positive pressure for their fulfillment.

OKRs and individual performance

Individual employee performance management is the main way to identify those star team members for performance bonus application.

It is important to start by evaluating each employee's performance within their specific role. To do this, each person must be clearly informed about all information regarding their position, their chain of command, their specific responsibilities, and the level of experience, skills, and knowledge they need to possess to perform their job.

It is also interesting to outline the tasks necessary for the function to be successful in supporting the organization's general activities. This stage, which covers the individual's role, should encompass the largest percentage base of overall performance measurement, potentially reaching 60% of the total.

Next, employees should be assessed on their performance within their functional role. In other words, beyond their job description, the approach here is to address the behaviors that will be measured.

For example, you can assess whether the employee is productive, a good communicator—knows how to listen and shares information—has a strategic vision, knows how to make decisions, creates an inclusive environment, collaborates with the entire company, among other performance standards.

To classify and size these behaviors, 360° feedback is of great help. This stage should cover 20% to 30% of performance measurement.

Finally, the evaluation will focus on the employee's performance, incorporating the company's core values, meaning those central values that underpin its organizational culture.

The measurement is given by the way people apply in their daily interactions what is widely valued by the institution. Weighing this evidence should cover about 10% of the overall performance score.

The feedback Managers' and leaders' meetings should be based on these three elements, which need to be clear in results review meetings. This is where OKRs come in, as progress toward them can be used to inform employee performance in these different aspects.

Read also: How to give constructive feedback and boost your employees' motivation?

OKRs are a proven system for improving organizational efficiency and performance, even if the matrix is more complex for individuals.

A positive employee experience includes the autonomy and sense of purpose that OKRs provide, but it also includes intangible factors that are important for individual growth and performance.

Now that you know how OKRs can help with the performance bonus process, check out our article that reveals 5 Common Mistakes Companies Make When Managing Variable Pay in Spreadsheets.