Employee Engagement is a big thing in the H.R world and rightfully so
And if you’ve ever been to a Google office you’ll see how seriously they take it and they’re not the only ones. But we all know this.
So this post is not about how to increase Employee Engagement – as there’s plenty of source material out there already covering this – and not how to monitor it against performance in a normal manner.
This article covers how to monitor it more accurately than your organisation has ever, ever, ever done before, using a new goal setting technique called OKR.
So here goes…
For those not familiar OKR stands for Objectives and Key Results and is a goal setting method invented at Intel and used by Google to set and manage their objectives.
And it’s not just Google, we did a survey back in 2014 which indicated even then that something like 40% of tech startups in London have moved to OKR in the last 12 months. That’s massive.
And it also means it’s worth knowing about.
Objectives and Key Results defining characteristics
And more importantly OKR is not linked to remuneration. That is very, very important for this demonstration.
So I’m now going to explain how Objectives and Key Results can be used to monitor general company performance trends against employee engagement in an extremely accurate manner
Here’s how to do it.
At an individual level it would be precarious to track an individual’s performance against the engagement because once they are aware of this, their OKR scoring will become distorted or gamesmanship will occur. Particularly around bonus time.
But at organisational level, just gather up all your OKR scores in google.docs, excel or specialist software and average.
This will give you a fallible but benchmarkable top-line trend to compare against any engagement level tracking you’re doing. I’ll explain how to reduce the fallibility shortly.
Nice but so far nothing revolutionary. So let’s go deeper…
Very important. With OKR you have “Objectives” each with 3-5 quantifiable Key Results which are rated 1-10 based on success under a common rating system where 6+ normally means a successful outcome.
This simple 1-10 rating system within OKR combined with the ability to add tags, dependencies and health ratings will be your performance benchmark to measure engagement against performance.
So, for example, here’s a pretty normal looking company’s average engagement level (using whatever survey questions you use to estimate engagement) segmented by division.
Don’t worry that Sales are happy as Larry and the Exec fear they may miss their Q4 bonus targets, it’s just an example…
And here’s your OKR ratings with the average health scores;
Now you can see by merging these two data sets its easy to track and benchmark engagement by both the averaged OKR rating and health KPIs.
But I’m not going to do that now as that would be a potential mistake and there’s a more important chart coming up.
Wait a second…what about human error and bias?
Naturally everyone views their particular project as vital and thus key results as important and that is a very good thing. So to remove this you allow other colleagues to also rate the OKR to create a weighted value.
But that’s still a lot of noise if everyone from the cleaner to the CEO are rating their OKRs and grading their importance!?
Now the clever part…
Using OKR health KPIs like Company Relevance or Importance you can average only the OKRs with a genuine business importance.
The actual number is arbitrary and you should set it as you feel works for your org, but let’s set the bar at 7 for this example, because any rating over 7 in OKR is considered an out-performance.
Now, Key Results which are valuable but not business critical such as the “Complete office rebrand” or “Reduce hot fix rate monthly rate to X” have been removed from the calculation and only mission critical OKRs such as “Android Launch” or land “$1mil p/a client” are being tracked and averaged.
And it’s this, the weighted average of mission critical OKRs, which you use to benchmark against your engagement level
Neat but pretty straight-forward and couldn’t this be achieved by just asking our employees to rate their engagement and score their performance?
Excluding using hard stats like users, profits and revenues it’s obviously possible using other techniques but I’m going to go with a hard not here in the sense that the intrinsic characteristics of OKR will speed up this process and make the tracking far more measurable, reliable and accurate.
And this accuracy, performance optimisation and making it fit seamlessly within your company’s performance DNA which is exactly what you need to make accurate assessment of employee engagement investment.
So OKR is ideal for measuring performance against engagement because…
OKR is measurable yet separated from remuneration and performance reviews. This is so important as it maintains the integrity of your performance scoring, which is beyond critical.
To not use OKR you’d have to explain to your staff to score their performance, and it’s not going to count in their bonus review, and then how and what to score, consistent.
Or your could just use OKR.
That’s definitely sounds like the kicker but what else is there?
- The methodology is simple to understand, rock solid and widely adopted in the startup community. There is no interpretation on the scoring system. It’s pretty much set in stone.
- Reduced training (although that is important and worthy of a separate post!) through quicker, better adoption and more consistent understanding (and performance scoring!) throughout your organisation.
And the most important thing to remember is OKR could improve your performance
OKR is used by many fast growing organisations as a goal setting framework to help improve their internal communication, coordination and delivery and that’s why OKR is so prevalent in the startup world.
Your employees will be using OKR to achieve results and work better while you’ll be using the “by-product” data coming out the back-end to analyse your employee engagement ROI, fine tune successful initiatives and build the case for further investment.
And that investment will further boost your performance.
It’s like a double win
We used the google example as we’d bet my bottom dollar that this approach is used by Google to track divisional performance against any investment in employee engagement.
We’ll also bet they’ve also optimised a relatively simple algorithm to benchmark their employee’s OKRs to their engagement and consider it a genuine proprietary business advantage.
Don’t think this is all wizardry or infallible but it is something any company could achieve and it could seriously help you track, optimise and achieve immense results.
Start using the OKR methodology
It’s just so accurate.
Please click here for a great overview from Business Insider