Should individual people have OKRs?

I used to advocate for OKRs for individuals, not just teams. I believed in setting OKRs for everyone. However, I’ve changed my mind, particularly when it comes to cascaded OKRs. You can still set goals for individuals in an OKR-like format (more on that later), but I avoid including individuals as part of the regular OKR process.

The power of OKRs is their ability to link and cascade through the organization, providing everyone with an understanding of how they contribute to the overarching strategy.

In cascading OKRs, it might seem appealing to apply them to individuals as well. It seems like a good way to describe how everyone will contribute to the strategy. However, I’ve come to believe that this cascading should stop at the team level.

A well-crafted OKR describes and measures an outcome, but it can be challenging to create an outcome-focused OKR for an individual. A single person typically can’t generate an outcome independently - outcomes are the result of team efforts. Individual OKRs tend to become output measures. It’s straightforward to gauge an outcome, but surprisingly difficult to objectively assess an output. You can measure that it happened, but measuring how well it was done is subjective.

So, you might end up with a series of "ship this" and "write that" OKRs. It’s tough to naturally link milestones and tasks to outcome-based OKRs.

Furthermore, when an individual has OKRs, it’s tempting to utilize them for performance management. After all, you have a list of things they are supposed to accomplish, so why not evaluate their performance based on whether they accomplished those things? Meeting their OKRs (or not) starts influencing their bonus, salary, or even employment.

This approach undermines one of the key strengths of OKRs: stretch goals.

Stretch goals are magic. If you assign a person a reachable task, they’ll usually accomplish it. If you’re new to running and set a goal to run a mile by the end of the month, you’ll likely do it. That’s an achievable target. But if you set a goal to run five miles, you probably won’t make it. But you’ll run more than one mile. By setting a goal just beyond reach, you’ll progress further than if you simply tried and stopped.

Yet once you start using goals for performance management, you’ve changed the incentives. Achieving and surpassing a goal brings status and monetary rewards like promotions and bonuses. Consequently, people craft goals that are easily attainable, ones they can consistently surpass. They play it safe.

Using OKRs for performance ratings can actually diminish performance. It creates a disincentive for individuals to push themselves.

This is not to suggest that individuals shouldn’t have goals. Everyone should have personal improvement objectives or major initiatives that they’re leading. These typically take the form of milestones or tasks. They might include "learn Javascript" or "deliver higher quality proposals," with KRs describing how these will be evaluated.

But these are not cascades from the overall corporate goals. They’re standard personal goals, simply structured in the format of an OKR. If your company is struggling with OKRs, expressing these goals as OKRs might add confusion. However, if your company is successfully using OKRs, presenting personal goals in an OKR format can enhance understanding.