Okrs Vs Kpis: When To Use Okrs And When To Use Kpis

By Author: TrackHr App
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Two of the most potential tools in the sphere of business strategy and performance monitoring include OKRs (Objectives and Key Results) and KPIs (Key Performance Indicators). Although they are both aimed at the enhancement of results, they have different aims and work well in certain situations. In this article, you get to know when to apply OKRs and in which cases KPIs would be more appropriate in your team or organization.

What Are KPIs?
Key Performance Indicators (KPIs) refer to quantifiable dimensions of measure that can be assessed to examine the effectiveness of a given activity. These are applied in tracking the current performance and in measuring the achievement of business goals over a period.

Common KPI examples include:
Monthly sales revenue
Customer retention rate
Website traffic
The score of employee productivity
What Are OKRs?
Objectives and Key Results (OKRs) are a goal-setting model to set ambitious goals and measure the results of these objectives in an organization. OKRs are concerned with transformation as opposed to standard measures.

A typical ...
... OKR looks like this:
• Objective: enhance customer satisfaction
KR1: Single-digit basis, increase NPS status 60-75
KR2: Decrease customer complaints by 30 percent.
KR3: Initialize a 24-hour support line.
When to Use KPIs
KPIs can be used perfectly well in:

• Tracking of the current performance
Example: Monitor performance of your marketing campaign within a quarter.

• The effectiveness or productivity measurement
Example: Measure cost-per-lead or employee attendance by use of KPIs.

• Operational decision-making
KPIs are effective in case you need steady tracking and reporting over time.

• Stable conditions
After the processes have already been optimized, KPIs will make them consistent.

When to Use OKRs
OKRs suit:

• High-level events or stretch target setting
Case in point: Propagate a new offering in Q3 long-haul capture.

• Innovation and growth driver
OKRs challenge teams to do more than business as usual. Business as usual makes use of exotic targets.

• Alignment Team around Company-Wide Priorities
OKRs assist all of us in prioritizing what really matters every quarter.

• Making behaviors or transforming driving
OKRs can be used to handle change when you are launching into a new market or restructuring.

Can OKRs and KPIs Work Together?
Absolutely! OKRs and KPIs are mutually complementary. KPI helps you to measure the current performance, whereas OKR helps you to accomplish ambitious objectives. Continuing with the example of customer satisfaction score, when this becomes your KPI, your OKR will be to enhance it either through the introduction of new features or through the minimization of churn.

Conclusion
Knowing how to implement OKRs vs. KPIs may be very useful in enhancing your business. Apply KPIs when it is necessary to measure stable performance and OKRs in case it is necessary to establish a big ambitious strategy with goals in the terms. Collaboratively, they are able to spearhead accountability, alignment, and innovation within your business.