Summary
Tracking tangible business efforts is crucial for achieving overall business success. Goals, KPIs, and OKRs are three major tracking methods that can be used in isolation or in tandem. Best practices for embracing goals, KPIs, and OKRs include tracking metrics at every organizational level, partnering with a reliable goals software, and including goals in performance reviews and one-on-ones.
Tracking tangible business efforts is crucial for achieving the mission, realizing the vision, and ultimately attaining overall business success. As each organization has its own unique success metrics, it is equally important to have customized methods for tracking these metrics. That’s why you’ve probably come across terms like goals, KPIs, and OKRs throughout your professional career.
To ensure employee contributions are aligned with the greater mission, effective goal management must be created, communicated, and documented appropriately. The right tracking methods will show employees that their efforts impact the greater purpose, thereby increasing engagement and boosting productivity.
What Are Goals?
Goals are broad, long-term accomplishments aligned to the company mission and vision. To measure a goal is to measure one major metric; that is, if the goal was completed or not. Goals can be created at the company, department, and/or individual employee level. From the employee’s perspective, goals are a key motivator and act as a source of professional and personal development.
What Are KPIs?
A KPI is an acronym for Key Performance Indicator. Asking the question, “How do I know the business is on track?” leads to the development of KPIs for an organization, and possibly each department within it. The ‘measurable outcomes’ mentioned in the Goals definition above can often translate into Key Performance Indicators, as these distinct indicators measure if the team is on track with the overarching goal.
For example, a Customer Success goal may be to Increase Customer Retention. An appropriate KPI for this Goal would be Customer Churn Rate. The percentage of customers who churn in one quarter will help shed light on what needs to be adjusted or improved to increase the amount of customers who stick around.
What Are OKRs?
An OKR is the combination of an Objective and Key Result and is itself a two-step process. The Objective is a broad, impactful statement, like “Increase employee engagement” where the Key Results will point to how that Objective might be achieved, such as: 1) Implement a recognition program, 2) Conduct 1 monthly check-in per employee, or 3) Distribute an employee engagement survey in Q1. OKRs are often used in place of Goals and will generally track more success metrics than Goals.
How To Use Goals, KPIs, and OKRs
The choice of tracking methods for business efforts and outcomes varies from organization to organization, depending on the familiarity and comfort level of the leaders. There is no definitive right or wrong answer when it comes to selecting between goals, KPIs, and OKRs. In fact, many organizations utilize a combination of all three formats at different stages. As long as the business objectives are aligned with the mission and are measured and communicated effectively, each team is empowered to determine the approach that best suits their culture and individuals.
The following list highlights best practices for embracing Goals, KPIs, and OKRs, regardless if an organization chooses one over the other or a combination of all three.
1. Track Metrics at Every Organizational Level
Business metrics should always be measured at the company, department, and individual levels. This helps guarantee that all teammembers are heading in the same direction, so goal tracking must be embedded across the organization. Depending on your business’s ‘busy season’ and several other factors, your organization may choose to create fresh goals/objectives/KPIs at the start of every calendar year, quarterly, at fiscal year-end, etc.
A best practice is to utilize cascading goals/objectives/KPIs. For example, cascading goals tie company, department, and individual metrics to each other, with each subsequent level breaking down the goal into smaller chunks. For the employee, cascading goals allow them to visually see how their individual efforts impact their department’s goals, and how the department’s results affect the larger company goal. This format ensures all participants are held accountable and remain engaged with the company’spurpose and goals, rather than just completing their own goals.
2. Partner With A Reliable Software
Once it is determined if your organization is using goals, KPIs, or OKRs, it is critical to not only find reliable software but also a vendor who will seek to understand the distinct needs of your business. Basic tracking of goals and objectives is important, but excellent platforms will also provide powerful dashboards and reports, integrate into your daily workflows, include workflow automation options, and will ultimately foster better collaboration within your team. The tool should be user-friendly,goal updates should be easy, and managers and employees can use a single source of truth to take action.
WorkDove’s goal management software aligns team members with goals through integrated views that improve accountability, provide feedback, and work together to improve individual and business performance. Utilizing simple or cascading goals, the tool can be configured to meet specific needs while increasing focus for employees at all levels.
3. Include Goals, KPIs, and OKRs in One-On-Ones
The manager and employee one-on-ones, otherwise known as a check-in or 1:1, is a perfect place to discuss OKR or KPI progress. High-performing organizations already have a regular check-in process, so integrating goal conversations requires little to no additional effort. Spending intentional time talking through goals/objectives/KPIs improves the manager/employee relationship by giving employees a space to share any challenges or concerns. Also, this allows a manager to coach the employee, while working together to achieve goals and objectives.
4. Include goals, KPIs, and OKRs in Performance Reviews
Incorporating goals, KPIs, and OKRs into performance reviews not only drives better business outcomes but also demonstrates to employees the significance of their contributions. This approach equips managers with a valuable tool for coaching and allows for a more holistic, comprehensive evaluation of employee performance. Furthermore, for HR leaders, integrating these metrics into performance reviews provides comprehensive data on productivity and the achievements of their workforce, thereby facilitating informed decision-making for the organization
Examples of Goals, KPIs, and OKRs
The table below provides a few standard examples of the differences in goals, KPIs, and OKRs. These examples may be used as a starting point for generalized objectives but each organization, department, and/or individual is encouraged to adjust as necessary for their own business metrics.
Goals | KPIs | OKRs | |
Sales | Increase Win Rate | 20% Win Rate | Objective: Hire best-in-class Sales reps Key Results: 1) Update Account Executive job description with 2024 qualifications 2) Interview top 5 candidates in-person 3) Create new role-play cold call scenario for in-person interview 4) Hire 4 new Account Executives by end of Q1 |
Marketing | Grow Social Media Following | Social Media Engagement | Objective: Increase web traffic Key Results: 1) Publish 4 blogs per month 2) Update high-performing blogs with improved SEO titles and keywords 3) Improve Google Rank by 3 spots for top 10 keywords |
Human Resources | Improve Talent Retention | Employee Net Promoter Score (eNPS) | Objective: Improve Employee Wellness Key Results: 1) Include 2 mental health days in PTO benefits 2) Implement a company-wide fitness challenge 3) Each employee takes 1 volunteer day per quarter |
Operations | Enhance Productivity | Utilization Rate | Objective: Improve work efficiency Key Results: 1) Decrease monthly staff meeting time by 15 minutes 2) Hold leaders accountable to inboxes having 3 or fewer emails at the end of the week 3) Take all team leads through quarterly lunch-hour training |
Interested in partnering with a results-driven, user-friendly goals platform to improve focus and increase accountability at every level? Connect with an expert at WorkDove today!
