How to Set OKRs for Teams: Best Practices and Real-World Examples

Picture a framework where objectives are not just wishful thinking but actionable paths leading to tangible results. The beauty of OKRs lies in their simplicity and profound impact. But setting them right is where the real challenge lies. In fact, only 16% of knowledge workers believe their company excels at setting and communicating goals, with only 26% claiming to understand how their work contributes to company goals.

The result? Confusion and lack of motivation among team members ultimately lead to failure in achieving these goals.

This guide will delve into how to set OKRs and achieve tangible results. You will:

• Gain clarity on the OKR methodology.
• Learn best practices when setting OKRs to help you understand the nuances of crafting effective OKRs, infusing them with realism while maintaining their aspirational nature.
• Find some OKR examples that serve as a practical guide, illustrating how different organizations translate the OKR framework into a driving force for success.

Demystifying OKR methodology

The OKR (Objectives and Key Results) methodology is a goal-setting framework used by organizations to define and track objectives and their outcomes. It consists of two primary components:

• Objectives: These are concise and inspirational statements that outline what the organization, team, or individual aims to achieve. Objectives are qualitative, high-level, and aligned with the organization's mission and strategic goals.
• Key results: Each objective typically has three to five key results. These are specific, measurable outcomes that, when achieved, indicate the objective has been met. Key results are quantifiable and time-bound and offer milestones or benchmarks for progress.

The OKR methodology promotes transparency, alignment, and engagement around measurable and ambitious goals, driving performance and organizational success. It encourages regular check-ins, adjustments, and a focus on outcomes rather than activities, making it a dynamic tool for continual improvement and growth.

The objectives are qualitative or simply answer "what you want to achieve." The objectives define the goals you want to reach.

Some examples of objectives are:

• Reduce employee turnover.
• Increase revenue.
• Improve client management.

But how would you know if your company has achieved these? This is where the key results come in.

The key results are the measurable outcomes you must achieve to reach your objectives. They should be measurable, realistic, and quantitative. So, if one of your objectives is to "reduce employee turnover," you can break down your key results into any of the following:

• Achieve a 20% increase in employee satisfaction rate this year.
• Decrease employee turnover by 10% this quarter.
• Increase employee retention rate by 15%.

Then, you have the initiatives, which consist of all the projects and tasks that will lead you to your key results. They help answer the question: What do I do to get there? Initiatives set the pace and guide you to reach your destination. For the key results mentioned above, your initiatives can be:

• Implement a comprehensive employee satisfaction survey.
• Analyze exit interview data for turnover insights.
• Develop targeted retention strategies based on findings.

How to set OKRs in 7 essential steps

Before working on your objectives and key results, ensure you understand the problems you aim to tackle and the benefits you expect. Most companies use OKRs to help them implement and execute a strategy that is transparent, clear, measurable, and easy to understand for employees.

I. The preparation stage

Step 1: Align OKRs with company vision and values

Review your company's vision and values to know how to integrate your overall objectives into your OKRs. Doing so can help align employees to company goals and motivate them to make better decisions with their work, resulting in favorable outcomes that lead to your OKRs' success.

Step 2: Tie in OKRs to your performance management system

Once you've aligned your OKRs with the company's vision and values, the next crucial step is integrating them seamlessly into your performance management system. This involves using a hybrid goal-setting approach where executives set the company's entire objectives, but you assign smaller teams to help attain the key results.

Doing so creates a unified approach that measures success against your set objectives but also fosters continuous performance development of your employees. As a result, your team will know that achieving OKRs is essential to performance evaluation, promoting a culture of accountability and excellence.

Step 3: Communicate your OKR framework and provide the proper training

OKRs isn't just a change in how you work—it's like picking up a new language. Communicate your OKRs and facilitate a structured training program to ensure everyone understands them well. Whether you change your OKRs on a monthly, quarterly, or yearly basis, cascading your OKRs builds trust and value within the team.

Step 4: Get your team members buy-in for your OKRs

It is not enough to inform your team about your OKRs; close collaboration is essential to ensuring OKRs are aligned and collective efforts are recognized. It is also easier to achieve goals when your employees are on board.

II. The goal-setting stage

Step 5: Create high-impact objectives

High-impact objectives are clear, well-defined, and structured, leading to impactful results. These objectives should be able to deliver ROI or meaningful key results to your company.

Here's how to set high-impact objectives:

• Develop OKRs based on at least 3-5 of the most critical objectives within your team. Doing this can help you and your team identify where to pour most of your energy to achieve company targets.
• Align team goals with organizational objectives.
• Track progress regularly.
• Understand what these objectives mean to your company.

Step 6: Set measurable key results

Once you have identified your objectives, it is time to create Key Results that align with them to see if they can be met.

Your key results should be:

• Outcome-focused: Don't treat key results as your to-do list but as qualifiers to reach a desired outcome. Focus on achieving them by the end of a time frame.
• Measurable: Set key results with clear metrics to track progress effectively.
• Relevant: They should be aligned with the team objectives to keep your team focused on time-bound goals.
• Ambitious yet realistic: Be bold but practical with your key results. They should be ambitious enough to inspire effort but not so daunting that they become unattainable.
• Balanced: Keep your key results to a maximum of 3-5 per objective. This prevents overwhelming your team with excessive targets and allows your team to channel their energy and resources effectively.

Step 7: Check-in for continuous performance development

Check-ins are essential before implementation to determine what works within the team. However, once your OKRs are in place, follow-up check-ins to share insights and make adjustments as needed are just as important.

An OKR performance management tool can help you track OKR progress and establish regular check-ins with the team so that you can set milestones for each high-impact objective they have achieved and recognize their efforts.

Moreover, using OKR software minimizes human error, helping you properly analyze your data sources and measure progress.

Best practices when setting OKRs: Does & don'ts

Your company's OKR approach will differ from other organizations to fit your unique needs. But there are some best practices to keep in mind.

To help you get started, here are the do's and don'ts when implementing OKRs.

DO: Align OKRs with company goals

Your company's goals define what your priorities and direction are. So, aligning your company vision to your OKRs can help you better understand how your OKRs can significantly contribute to where the company is headed. It will also help motivate your team to achieve a common goal.

DO: Get insights from the team about the proposed OKRs

Collaborate with the team to get insights and recommendations to set OKRs that consider the efforts of all the departments within the entire organization. Let's say you

define OKRs at least three times a year. You can set up a brainstorming session to prepare for the upcoming OKRs per quarter. This helps the team work together and see how each department can contribute to achieving OKRs as planned.

Additionally, work with your teams to develop their own OKRs. This "bottom-up" approach will allow employees to share their insights in creating OKRs, giving them greater visibility into the OKR process and identifying what is or isn't feasible.

DO: Set ambitious goals

Setting challenging goals drives team members' performance more effectively than easy goals. So, set measurable goals beyond peoples' comfort zones to promote personal and professional growth as the team works towards achieving them.

DO: Keep OKRs manageable and attainable

While your OKRs should have ambitious goals, still ensure they are attainable. Push strides to challenge yourself, not burn yourself out by working on a project that's likely to fail. Limit your key results per objective to make them more manageable and achievable.

DO: Set a timeframe for achieving your OKRs

Linking OKRs to a timeline can help you track progress and make necessary adjustments. While doing a quarterly schedule for OKRs is common, you can be flexible with your timelines depending on your team's capacity and requirements to achieve them.

Suppose you target to achieve your OKRs every three months. You can create smaller weekly, bi-monthly, or monthly goals within those months.

DO: Adjust your OKRs according to business changes

Remember that your OKRs are not set in stone because you can always expect the business landscape to change constantly. Review your OKRs frequently and see whether it's time to make adjustments. Doing this can help you prepare for shifting business conditions and recognize how to make improvements early on.

DON'T: Link OKRs to performance reviews

When you link OKRs to employees' performance reviews, they'll likely focus on achieving easier goals. OKRs should be based on achieving overall company growth and success, while performance reviews should be a different goal for an individual's development.

DON'T: Treat OKRs as part of your to-do list

One of the common OKR mistakes is treating it as a task to tick off your to-do list. OKRs

are results-oriented and not based on the number of tasks you can finish. When you treat OKRs as tasks, you'll focus more on completing outputs than the qualitative results.

DON'T: Set goals to achieve 100% results

You are setting your team up for failure if you think OKRs are supposed to attain 100% results.

Set progressive and attainable OKRs to track progress and challenge your team to land a specific target each time. Plus, achieving 100% might mean you're setting easy OKRs, or achieving below 50% means your team might not be trying hard enough.

DON'T: Make key results dependent on top of another key result

Consider key results focused on achieving your company objective, not accomplishing another key result. If key results are interdependent, you'll risk causing blockers. Instead, aim for key results that contribute individually to the overarching objective so that you can measure and evaluate them independently.

Examples of well-set OKRs

OKRs should be flexible enough to the changing company culture and targets. It not

only adds to the challenge but also prepares your employees to face future unforeseen circumstances.

Here are some examples of well-set OKRs to guide you:

Suppose you want to acquire more talents. Your objective can be to be a top employer of choice. Your key results can be:

• Increase compensation by 50% more than the industry standard
• Increase brand awareness by 10% compared to the previous year
• Increase offer acceptance rate by 5% compared with last quarter

For objectives focused on managing your talents and encouraging continuous employee feedback, you can establish key results such as:

• Increase overall employee net promoter score (eNPS) from 10 to 15.
• Decrease employee turnover by 25%.
• Increase employee engagement by 10 points more based on your employee survey.
• Improve employer brand recognition by 10% compared to the previous year.
• Enhance the onboarding program: improve the feedback scores from new hires after completing the onboarding process with 10 points.

If you want to foster a positive company culture, you can set key results like:

• Earn a Great Place to Work certification by Q4.
• Increase enrolled employees in fitness and wellness training programs by 10%.
• Promote a healthy food policy in the workplace.

Examples of companies that use OKRs

Most of the large-scale companies have adopted the use of OKRs in their businesses. Let's take a look and get inspiration from these companies:

OKR pioneer: Google

Google sets the bar high as one of the pioneering companies that believed in the power of OKRs after one of its investors, John Doerr, introduced the idea when the company was just a start-up.

Google changes its OKRs annually, updating four to six OKRs each quarter. Google ensures the team sets quarterly goals as high as possible. To ensure their OKRs are effective, Google team members rate their key results on a scale of 0 to 1 at the end of each quarter. Since OKRs should be ambitious, their goal is to hit at least 0.6 to 0.7 for them to say that their KRs are impactful enough for their business.

Linking OKRs to employee development: LinkedIn

LinkedIn's ex-CEO, Jeff Weiner, sees the value of OKRs to connect employees with the company's collective mission.

LinkedIn sets 3 to 5 OKRs in a quarter, allowing managers to set their own OKRs. These OKRs are time-bound and aligned with the company-wide objectives to measure its success.

Focused on achieving OKRs: Amazon

Amazon continues to rise above its competitors as one of the biggest e-commerce companies in the world today. The secret? They stick to their goals.

Amazon is clear on its objective of creating a buy-and-sell experience for consumers that is fast, cheap, and easy. For Amazon, creating the best customer experience is a fundamental objective, something that the company knows won’t change:

Can OKRs coexist with other goal-setting frameworks?

While OKRs can stand alone, they can be more effective when used alongside existing frameworks. For example, OKRs can coexist with KPIs (key performance indicators), CFRs, projects, and tasks to align all frameworks across your business process.

OKRs seek measurable ways to achieve company objectives, whereas KPIs use success metrics to evaluate business goals or projects. You can use KPIs to measure your key results to see what needs adjusting.

You can also incorporate the SMART goals into your OKRs. Let's say you set quarterly OKRs; incorporating the SMART framework can help your team stay on track, focus on achieving the key results for the quarter, and measure success much more clearly.

Your OKRs can also be categorized between performance goals or development goals. When you determine the objectives you want to set, you can decide how your OKRs are best paired with another goal-setting framework.

Set OKRs and help your team reach them with Deel Engage

Deel Engage, our all-in-one talent management suite, will streamline OKR setting and tracking by:

• Defining parent goals (objectives) and sub-goals (key results) so that every individual and department stays accountable
• Assigning timeframes to each objective and key result
• Customizing your feedback systems with competencies, culture, and goals
• Using goals to add more context to 1:1 meetings and performance reviews
• Managing all of the workforce’s goals from a centralized location

Additionally, Deel HR, our truly global HRIS solution, is always included for free

Book a demo today to see how our solutions will help you build a high-performance workforce.