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Implementing Objective Key Results (OKRs) on SuccessFactors PM-GM

By Shweta Patil, June 2, 2016

OKR

Let’s start at the top. What are OKRs?

OKRs are a framework for employers and employees to discuss how the work of an individual employee is connected to the overall business strategy. When championed by management and implemented throughout a business, OKRs help organizations to:

  • Impose disciplined thinking so major goals surface
  • Inform everyone about what’s important
  • Enable more accurate communication
  • Establish indicators for measuring progress
  • Focus effort and ensure alignment

Because they are visible to everyone top-down and bottom-up and cross functionally – OKRs ensure everyone is working toward the same result.

Wait – isn’t every performance management framework supposed to do the same thing?

In theory, yes – Every well executed measurement framework should deliver the same outcomes. However, traditional organizations have built frameworks around Management by Objectives (MBO) and measured by a Balanced Scorecard (BSC) framework that promotes cross functional thinking. Sometimes these can get really complicated with varying weightages across scorecard categories for different departments/functions.

So, what makes OKR different from MBO?

The SF PM-GM implementation is based on the Management by Objective (MBO) and a Balanced Scorecard (BSC) approach which is different from OKRs in many ways:

Review cadence: OKRs can be reviewed monthly or quarterly which differs from the MBO plan, which can be set annually or quarterly.

Measuring performance quantitatively: In the case of OKR, the measurement is always quantitative. The consistent scoring model is set up to be calculable and precise (between 0 and 1 for every KR). MBO is more flexible in its mode of measurement – it can quantitative, qualitative, or both.

Category Weights: With MBO, weightages can differ across various goals – In OKRs there are no objective wise weightages – no objective or key result is more important than other. MBO measurements are often tailored to the objective being measured, while OKR measurements are consistent regardless of the objective.

While all that sounds hunky-dory, the life of an implementation consultant is anything but!

So, what is the big deal with implementing on SuccessFactors?

Plenty actually.

SF is designed around the Balanced Score Card (BSC) approach with category weights and KRAs that can be individually weighted and rated. By design, OKR has no such weights and can have any number of objectives and key results for every individual! (Though 3-5 objectives between 3-8 KRs per objective are recommended).

Basically meant, we couldn’t use either the category-KRA or a goal-sub goal framework directly.

Calculating overall scores

For starters, Objectives carry no weightages and neither do Key Results. Only KRs should be rated during the review process (not objectives)

Formula

I’m sure the mathematically minded amongst you, already figured out that we are talking average of averages, which is not possible in SF, since there is no Count() function, that can give us the number of KRs or objectives!

Should we PM or GM?

To stay true to the tenets of OKRs, transparency of the goal and traceability to the top was vital. So we decided on using Goal Execution to allow all employees to transparently see how their goal was being mapped to the company goal. The wrinkle in the ointment was calculating overall scores since GM does not have much computational power and PM is limited to in-section calculations or overall calculations.

Route Map

The biggest challenge was to build the route map, as you are aware there is no workflow in a Goal Plan.  We used the 2 States – Approved States and Unapproved States, broke them down to 9 workflows.  While the employee cannot self-rate on KRs during the quarterly review period, the managers rating needs to come back to employee for 1:1 discussion.    Here the flexibility was provided to cascade the Objective to level up and level down.   Goal execution map was also made visible to the employee and the manager which is the pictorial representation of the cascading of OKRs.

OKR Score:

During the one on one discussion, the Manager keys in the score for each Key Result area under a Large Objective.  These KRAs then average up to provide the score for each objective.

We went one step ahead and took the average of objectives to give the employee an OKR Score. This creates focus and prioritization and aligns everybody in the organization towards the same goal.

How does this affect the Annual Performance Management?

During the annual performance evaluation, these scores can be reviewed and provides a deeper insight on the performance of the employee over the course of the last year.

To conclude, OKR sends the right signal to entire organization and these matters, OKRs are tools that can motivate, increase transparency, accountability and empowerment, so it was worth the effort and after all we have happy SuccessFactors customer.

So Next time somebody says OKR cannot be done in SuccessFactors, please talk to us.