How & what are the measures Of KPI/OKR?

Comparing OKRs vs KPIs is a hot topic you’ll hear in performance management meetings, but it’s an apples and oranges discussion. While there can be overlap (more on that later), these two concepts are really very different. Keep reading to learn how.

What is a KPI?

An acronym for key performance indicator, KPIs are used to evaluate performance over time for an organization, individual, program, project, action, etc. While you may have some outliers, these indicators should usually:

• Link to strategic objectives
• Direct where to focus resources
• Be measured against targets

We highly recommend you make your KPIs measurable. Adding quantitative value makes it easier to provide context and compare performance for whatever you’re measuring. Creating qualitative KPIs is possible, but not advisable because this structure can lead to confusion and subjective interpretations of data.

What is an OKR?

OKR is the acronym for objective and key results—more specifically, an objective is tied to key results. OKR is a strategic framework, whereas KPIs are measurements that exist within a framework.

OKR is a strategic framework, whereas KPIs are measurements that exist within a framework.CLICK TO TWEET

OKR is a simplistic, black-and-white approach that uses specific metrics to track the achievement of a goal. Typically, an organization will have three to five high-level objectives and three to five key results per objective. Key results are numerically graded to obtain a clear performance evaluation for the objective. OKRs are:

• Always quantifiable
• Able to be objectively scored on a 0-1 or 0-100 scale
• Timelined
• Ambitious (if you easily achieve your objective, it wasn’t aggressive enough)

The OKR framework was popularized by Google and Intel, but it has also been used by Amazon, LinkedIn, Spotify, and other hugely successful companies for goal management. Generally speaking about OKRs vs. KPIs, the former are a good fit for organizations heavily focused on growth. Not to create confusion, but sometimes an organization’s KPIs are the same as the key results used in an OKR framework. Keep reading and this will become clearer.

KPI Examples

There are near unlimited examples of KPIs across all industries. A KPI could truly be any quantitative (and in rare cases, qualitative) measure a company uses to evaluate its progress and successfully reach its goals. It’s important to note that, unless you have a very small company, your KPIs can and should be broken down by department (and by industry if you are a conglomerate).

Here are some common KPI examples for a variety of industries and divisions:

• Retail Industry: revenue per square foot, same-store sales, sales per employee
• HR Department: attrition rate, employee performance, average recruitment time
• Sales Department: customer lifetime value, sales revenue, calls made
• Technology Industry: monthly recurring revenue, customer retention or churn, ticket resolution time
• Healthcare Industry: patient wait time, average treatment charge, number of educational programs