How Do You Differentiate Between OKRs & KPIs For Teams Across Enterprises?


We live in a fast-paced world & hence, we like saving time everywhere, even when it comes to talking about business terms. Short & crisp as the management likes it. Two terms that are widely used in businesses, OKR & KPI. Each of them has their own characteristics but are often mistaken to be the same by many organizations.

We’re here to explain to you the difference between the both & also help you understand their importance in your company.

What is a KPI?

Short for Key Performance Indicators, by definition, it is the measurable value that demonstrates how effectively a company is achieving key business objectives. KPIs are used by organizations at multiple levels to understand how close are they to achieving their targets. It can be defined for the overall performance of the company as well as department wise.

They are determined by a level of success that is usually based on past history, competitor research & financial growth of the company. It is always best to keep a check on the company’s KPIs timely to make sure it is truly effective.

What are OKRs?

Short for Objectives & Key Results, by definition, is a collaborative goal-setting tool used by teams and individuals to set challenging, ambitious goals with measurable results. OKRs are how a company can track its progress, create an alignment & also bring in engagement around measurable goals.

OKRs can be practised at an individual level that can affect the growth of the entire company. The unique thing about OKR is that it builds a collaborative effort among various departments & unity within the departments is what is needed for the company to grow as a whole.

Now let’s understand how do we define OKRs & KPIs in a company.

A KPI is usually meant for certain projects or processes & hence they should be measurable, direct & timely. An OKR is slightly more advanced wherein you would need to align it with outcomes hence they need to be more strategic, transparent, aligned & most importantly measurable.

How to bring them both together, is the question that must be running through all of your minds. KPIs focus on past performance & its success whereas OKRs are built on what is to be achieved. Hence it is best for companies to pick both rather than just one.

Let’s take an example, there is an upcoming project in your company similar to the previous projects, while you plan for the future project, you also research the previous project which is exactly what KPI is used for, now strategizing accordingly to reach the new target is what OKR can be used for. Both are essential for the success of your projects & your firm.

KPIs help improve a project that’s been done before while OKRs are for the long run, greater depth & greater goals for the firm & if you’re looking out for both, you can always get in touch with ZingHR!

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