Koan is an alignment tool, not a performance management tool. We strongly advise that organizations keep their OKRs and performance management separate, here's why.

Why You Should Separate OKRs and Performance Management

At first glance, OKRs seem a natural fit for a performance management process. OKRs communicate strategy through clear, measurable goals; performance management makes sure it’s delivered efficiently. However, at second glance, you will learn that the two entities are far more different than they appear.

OKRs are focused on strategy and give purpose to teams and organizations, whereas performance management is focused on engagement, development, and retention, and is concerned about individual performance. This distinction makes the two difficult to combine while maintaining both separate end goals. While OKRs are a good tool for measuring organizational performance, they’re a crude window on the individual contributions that enable it. Using OKRs to measure people discourages the sort of ambitious thinking that OKRs are meant to inspire. In general, OKRs and individual performance reviews won’t mix.

The common pitfalls of combining OKRs and performance management include:

  • Focusing on tasks rather than desired outcomes
  • Losing organizational transparency around OKRs
  • Delaying focus and progress due to teams waiting on cascading OKRs
  • Having too many OKRs
  • Setting easy or unrealistic OKRs

To learn more about our views on OKRs and Performance Management and our reasoning behind the points listed above, check out the links below. 👇

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