OKRs & Performance Reviews: Can they both work together?

Nov 23, 2022
OKRs & Performance Reviews: Can they both work together?

OKRs and performance reviews are both tools that can help you drive your business forward. However, they are different tools that work differently and should not be confused with each other. 

OKRs focus on driving long-term strategic goals, while performance reviews focus on short-term results. Both tools perform essential functions to drive the business forward but do so in different ways. That is why it is important to understand what each one is designed for before making any decisions about how they should fit into your organization’s review culture.

OKRs are more forward-looking while performance reviews focus on past achievements.

This means that OKR goals can be adjusted over time as the business needs change. On the other hand, performance reviews are more rigid and can only occur once per year at most.

OKRs also allow you to set goals in a way that doesn’t limit your imagination or creativity—you don’t have to worry about whether or not it will work because you already know what works! 

For example: if you want your team members to achieve their objectives by May 15th every year (that’s an objective!), then all they need do is use this formula: “I will complete my goal X by May 15th.” It doesn’t matter how far from now until then; just write down what comes next instead of worrying about how much time has passed since last year’s ending date (and there might even be some overlap between those two).

OKRs, when done right, can provide a structure for a performance review conversation.

This is where OKRs come in.

OKRs are a great way to set goals for your team and align them with the company’s overall goals. They can also help you set goals for the next quarter or year, which can be used as a framework for performance reviews.

Performance reviews should be an opportunity for employees to talk about how they’ve performed over time, what they’ll do differently moving forward, and how their progress is being measured against others within their departments or across organizations (in this case).

OKRs, as a process and a concept, should support your review culture, not compete with it.

OKRs can complement performance reviews and help you establish a review culture. They provide a framework for your discussion, set expectations for success, and define how each person will contribute to your company’s overall mission.

OKRs are also used to evaluate performance by providing leaders with information about where their team stands relative to its goals; this allows leaders to make decisions based on objective data instead of subjective opinions from employees or external sources (such as HR).

Some companies use OKRs instead of traditional performance reviews.

OKRs are more forward-looking, so they help you focus on the right things to do in the future. The problem with traditional performance reviews is that they can be very subjective and difficult to measure. If someone’s not doing well at their job, it may be hard for them to know what needs improvement without an objective system in places like an OKR goal or target number. 

An OKR helps employees and managers have a quick overview of each person is making progress towards their goals and how much progress has been made over time (elements like velocity). This makes it easier for everyone involved with the organization—employees get feedback about how well they’re doing their jobs rather than just being told by their managers, “good job!”. In contrast, managers have better metrics than ever!

Both tools perform essential functions to drive the business forward even though they do so in different ways.

There is no one-size-fits-all approach to performance reviews and OKRs. Instead, each tool has its strengths, weaknesses and uses.

Performance reviews are backwards-looking; they’re designed to evaluate the past few months, not the future. They can be used as an opportunity for employees to talk about their goals for the next quarter or even the year.

OKRs are forward-looking; they’re designed to set goals for each quarter (or even year) based on your company’s strategy and objectives for that period. As such, you’ll want those goals aligned with your company’s mission statement, so everyone knows why they’re working together in the first place. The ideal situation is where both tools can support each other—but this isn’t always possible because some companies may not have enough resources available now (or ever).

What is a performance review?

A performance review is an evaluation of employee performance used to help employees and managers identify areas of improvement. It can be conducted annually or bi-annually, according to the needs and preferences of your organization.

Performance reviews are typically conducted verbally, but they can also be written (or even both). In addition, they may be informal conversations between you and your manager in person or over email or text messages—or they may take place over lunch with your boss!

How to embed OKRs in performance reviews

OKRs are excellent for setting goals for reviews. They can also be used to set goals for the next quarter and beyond. Here’s how:

Set quantitative objectives, like sales or profit, by assigning points to them (1 point per $100 of revenue). For example, if you want your sales team to reach $3 million in their first year alone, create an objective that says: “Reach $3 million in revenue by October 1st.”

Create qualitative objectives by setting targets for specific behaviours or actions that need improvement. For example: “Increase email open rates 20% over last quarter,” or “Reduce churn rate 10% from last month.”

Advantages of embedding OKRs in performance reviews

Performance reviews are a great way to celebrate achieving and set new goals. They can also be used to create a culture that celebrates success individually and as an organization.

When you embed OKRs in your performance review process, there are several advantages:

It’s easy for employees to understand their contribution towards achieving the goal/objective/standard (GOS). This helps them see how they played a part in it, which makes them feel valued and appreciated by the organization. It also allows them to ask questions about how things were done or where things went wrong if any issues arise during future projects or activities related to the GOSs themselves!


In summary, OKRs are great tools to drive businesses forward. They provide a framework to manage, measure and analyze progress on important goals. At the same time, they can help keep an organization grounded in reality by acknowledging that performance improvements won’t come easy or fast. That said, we also recognize that not every company is ready to incorporate OKRs into their performance review process. For those who want them but aren’t sure how best to integrate them yet, we recommend starting with smaller goals like increasing customer loyalty or decreasing customer attrition rates first before tackling larger ones like revenue growth targets or profit margins per employee hour spent at work each month.

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