Closing Thoughts

Should you reference OKRs and initiatives as part of an employee's performance review?

There are several heated opinions on this. I personally believe that effective OKRs are a great way for employees to demonstrate their value, especially if that value is not specifically tied to their defined role and level (glue work). But it shouldn't be about completion %, rather as a means to agree on talking points.

The "target 70% completion" rule doesn't scale

If you are familiar with OKRs, you probably heard that they should stretch your company and you really shouldn't be targeting 100% completion and target 70%. Although that may be true for aggregated company-level/team-level OKRs that have several lower OKRs/Initiatives rolled up to them, I caution against applying the 70% expectation to all goals, especially those at the initiative level.

For one, this is excusable laziness. Why critically consider how you are going to complete your goals if you can just halfway there? It's much easier to aspire towards unrealistic, unachievable goals (not SMART) when there are loose expectations to fulfill them.

It also causes congestion in your company output when one team depends on the completion of a goal from another team and that team is actually only going to reach 70% completion on their task. Try not to turn your goals into a waterfall, but the reality is that your company is probably relatable to a factory in some way and there will always be bottlenecks.

The 70% completion rule also causes misalignment between your business and stakeholders. Although you should never let your aspirations become commitments, when your team is desperate to please the customer, they will often not distinguish an internal goal from an external target. This creates unrealistic deadlines.

Last but not least, no top-talent human feels motivated by reaching 70% on their goals. Many of your new grads, for example, were probably top of their graduating class. True, business is not the educational system, and it's important to learn that failure is an important step towards success. But, you can plan for failure with more realistic goals rather than consistently overshooting and missing. You'll be consistently fighting against the habituated innate expectations of these top achievers. Some leaders will be really good at rationalizing the 70% target and really good at repeatedly reminding their team of it. Most leaders lack that perspective or have other higher priority battles. Having split-brain on this kind of rule just causes confusion and contradictions within a company. I'm the latter kind of leader. This isn't a battle worth fighting.

Instead, I recommend that the lower down the company totem pole you are, the more realistically you try to 100% your goals. Instead of 70% completing your really really relevant and time-bound goals, make sure to include a few stretch goals, extra personal/professional development goals, or next-quarter goals in case you accomplish all you need to fulfill this quarter. You may not have much time for these goals, leaving them at 25-60%, but when you take an average across all your goals, you'll find you're completing about that desired 70% aspiration anyway without causing stressful slippage.