Speaker 1: If you're familiar with Purdue and the content we write, then you've probably heard us say that OKR isn't a tool for employee performance management. Well, in fact, goals, both OKRs and KPIs, serve a different purpose than employee performance management. OKRs help organizations translate their strategy into short-term goals for teams and individuals. KPIs focus on measuring your business as usual and monitoring the health of areas that are key to your business's success. Both these goal types are inherently collaborative in nature and work perfectly together to help organizations execute their strategy. Combining them with individual performance management risks diluting the power of such goals while encouraging sandbagging. Having said that, there's no doubt that people are your most powerful resource. They're at the forefront of driving execution and realizing growth as they'll be the ones working directly on your goals. OKRs and KPIs, therefore, provide great insight into an employee's performance. In this video, I'll share how you can effectively embed goals in your performance reviews. As a manager, you want to ensure your team is engaged, working towards the same end goal, and performing well. Performance reviews, also known as appraisals, are a powerful tool to give and receive feedback, assess what went well over a period of time, identify what can be improved, and build future plans together. It's important to set up regular performance reviews with each individual, and goals could play a crucial role in such meetings. There are many valuable areas to discuss in your performance reviews. Career aspirations, functional expertise, development areas for role success, demonstration of values, ability to execute, quality of execution, just to name a few. OKRs and KPIs are among the many sources of information that help managers understand how an employee is performing and ensure employees understand what is expected of them. I'll share three ways you can embed goals in your performance reviews using Purdue. Goals like OKRs and KPIs foster teamwork and are likely not going to be worked on by a single individual. Therefore, individual performance evaluations shouldn't reflect whether the goals were achieved or not. Instead, take a look at all the goals an employee leads and discuss goal-related outcomes and outputs. Your people will continuously be working on various activities and outputs to help your organization deliver its strategy. At Purdue, we call these activities initiatives. Initiatives push the organization toward an outcome and therefore are a great tool to evaluate employees' contributions toward higher-level objectives. They also tend to involve less collaboration than other types of goals, such as OKRs and KPIs, and can be a great measure of individual performance from the employee. If you're using a software like Purdue, you could pull up the employee's profile page or export it to have it in the meeting. You can discuss things like, did they do a good job executing this OKR? Have their efforts impacted this KPI positively? If not, then consider what didn't go well? What could have been done better? Based on those learnings, what should be done moving forward? Another option in Purdue is to pull up the initiatives and KPIs led by the individual, head over to custom reports, and filter based on initiatives and the lead. You can do the same for KPIs as well. Click into the initiative or KPI to have more focused discussions around the execution of the activity and the related outcomes. Performance reviews help understand the employee's strengths and weaknesses and what they should develop in the future in order to achieve better results. When closing your OKRs, it's important to rate execution and list down the lessons learned of what did and didn't go well. KPIs, on the other hand, requires ongoing work, so take a look at progress over time, what went well and what didn't. Discuss performance-related behaviors around your goals, celebrate wins, and talk about areas of strength and how they can be best used to support teams or the organization as a whole. If something didn't go well, one of the aspects could be that the individual was not prepared or qualified enough to deliver the expected results. Openly discuss areas for improvement and how the organization can support the individual's growth. In Purdue, you can pull up the closing notes for closed OKRs that the individual was leading over the previous quarters. Click into the closed OKR to discuss details around the learnings and steps moving forward. The same applies to the notes on the KPIs that this individual could impact. On a macro level, take goal-related behaviors as one of the many inputs into your appraisal system, not only to keep them front and center, but to also create a window into individual performance that directly affects the growth of the organization. It's best to make these behaviors role-specific too. For example, for managers and executives, focus on whether they're able to identify the right OKRs and KPIs to focus on. Do they proactively help direct reports to achieve their goals on time? For individual contributors, focus on whether they're willing and able to lead objectives. Do they complete initiatives on time? Are they contributing positively to their team's KPIs? To conclude, goals aren't a performance management tool, but instead provide managers with concrete insights into an individual's performance and contribution to the organization as a whole. Individuals are motivated when they see purpose in their work and are likely to perform better when they know their efforts contribute to the success of the organization. OKRs and KPIs, therefore, are powerful tools to provide that sense of alignment and direction. When discussing an individual's performance, their contributions to the team's and organization's goals should be a significant part of the review so that the individual feels the connection between their development and the company's priorities.