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  • Vishakha Waikar

A Performance Management System that really works – Part 2

In the last blog, we looked at how the vision and mission of an organization are linked to strategic objectives and further translated into departmental objectives. The table shown in the earlier blog established a clear link between a strategic objective and the further division of this objective into departmental objectives.


The table in itself is just one example of a single strategic objective. A similar job has to be done for all strategic objectives that are derived from the Vision and Mission of the organization. The task though is still half done. The second half of performance management is cascading these departmental objectives to the employee level KRAs and KPIs. But before we understand how to formulate KRAs and KPIs, let us briefly understand the concept.


OKRs, KRAs and KPIs are often used terms in an organization and somehow, they end up being used interchangeably. So, what are these OKRs, KRAs and KPIs?


· Key Result Area – a KRA as the name suggests is a key area of the function where a result is expected from the person performing it.


· Objective and Key Results – OKRs are basically the objectives or goals taken for the quarter and Results which are expected out of these goals.


· Key Performance Indicators – Key Performance Indicators are basically indicators or measures of the performance.


Although the concept of OKR is becoming popular really fast and is advocated by companies like Google, the benefit is that these can be used at the Corporate level, Business Unit level and employee level easily irrespective of the size of the company.

Whatever terminology we use, it is imperative that we formulate objective quarterly goals for the employees and write down the results expected in a measurable format. And writing down the indicator of the performance is equally important in this case.

Referring to the table in the previous blog; we take the example further to denote how to write a OKR based on a Departmental Objective.



Setting Objective Key Results


The above table is a representation of how one single departmental objective is divided into multiple action points or key results for the person given the responsibility. And the KPI column shows what would indicate that the task has been performed to its expectation.

Going further, setting up the OKRs is not enough. It is essential to set a strong review system which not only measures the performances in shorter periods of time but also motivates the employees to keep achieving their targets.

This system is to be designed to give a single window view to the department heads and even the owners/directors of the organization. What is needed to be done is all the OKRs of the department need to consolidated in a sheet and the collective achievement of the department in percentage is to be then accumulated in one more MS Excel sheet which shows the departmental KPI achievement as a single table.

At the start of every quarter, the previous quarter should be reviewed. In the first week itself the department heads should review the team member KPIs and then the Director’s should keep aside one full day only to review the departments in depth. An action plan should be made to further divided the action points of this quarterly KPI review (which is an addition to the MRMs held). If a monthly or quarterly review of even performances is taken and if the OKRs are set in such an objective manner, there will seldom be any friction at the end of the year on why a particular employee was appraised in a certain way.


In addition to this, all department heads can maintain incident books where in specific instances of appreciation and feedback should be maintained as per quarter to give appropriate feedbacks immediately and also during the appraisals.


In an upcoming blog, we will speak about appreciation, feedbacks and their documentation in the organization. Till then, the processes explained in both these blogs shall help you with setting up performance management systems in your organization. Do feel free to get in touch with any queries or suggestions.


Happy to Help!!!

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