Rick Crow wrote:
Posted: Thu Feb 06, 2025 9:25 am
OKRs are not synonymous with employee evaluations. OKRs are about the company’s goals and how each employee contributes to those goals. Performance reviews — which are all about evaluating how well an employee performed over a specific period of time — should be independent of their OKRs.
This approach is very different from the traditional model which is showing signs of aging. A study by Willis Towers Watson shows that paying for performance tools on a regular basis is not effective in driving improvements in individual performance, nor in rewarding it:
➔ Only 20% of employers in North America say performance pay is effective in driving higher levels of individual performance in their organizations;
➔ Employers give short-term incentives low marks. Only morocco mobile database half say short-term incentives are effective in driving higher levels of individual performance, and even fewer 47% say they are effective in differentiating pay based on individual performance.
A tale of two bonuses
There was once an organization that had two employees on the same team: Paul and Mary.
➔ Paul is smart, focused, and gets results. But he is driven by monetary rewards and is always looking for ways to make more money.
➔ Mary is also smart and focused, but she is driven by her own achievements. She believes that if she delivers, the money will follow.
The organization uses a simplified bonus formula that ties goals to rewards:
Bonus paid = ƒ% of target achieved * salary grade
This formula means that the size of the bonus is a function of the employee's salary grade and the percentage of the employee achieving the goal.
This approach is very different from the traditional model which is showing signs of aging. A study by Willis Towers Watson shows that paying for performance tools on a regular basis is not effective in driving improvements in individual performance, nor in rewarding it:
➔ Only 20% of employers in North America say performance pay is effective in driving higher levels of individual performance in their organizations;
➔ Employers give short-term incentives low marks. Only morocco mobile database half say short-term incentives are effective in driving higher levels of individual performance, and even fewer 47% say they are effective in differentiating pay based on individual performance.
A tale of two bonuses
There was once an organization that had two employees on the same team: Paul and Mary.
➔ Paul is smart, focused, and gets results. But he is driven by monetary rewards and is always looking for ways to make more money.
➔ Mary is also smart and focused, but she is driven by her own achievements. She believes that if she delivers, the money will follow.
The organization uses a simplified bonus formula that ties goals to rewards:
Bonus paid = ƒ% of target achieved * salary grade
This formula means that the size of the bonus is a function of the employee's salary grade and the percentage of the employee achieving the goal.