Should companies use OKR settings for remote teams?

objectives and key results examples
Table of Contents
According to the Gallup workplace report this year, 56% of United States full-time employees are remotely capable, and more than half are working as hybrid employees 1. Simply put, their roles, job nature, and business operation model allows them to fully work from home without the need to return to the office.  On the other hand, only 2 out of 10 remote capable employees work full time in the office, and only 6% want to be full time on-site employees. From a long-term business perspective, organizations plan to allow 55% of the remotely capable employees to work in hybrid mode, 22% will be completely working from home, and 23% will be required to work fully on-site.  Research shows that remote work motivates remote employees to achieve greater productivity and happiness. However, when it comes to evaluating team performance, how can companies cascade the vision down to everyone, ensure that each contribution is recognized, and measure them fairly?   In this article, we will discuss the common challenges that remote employees experience and whether OKRs help remote leaders and employees.  

1. Lack of clarity and alignment

From a survey with 67,000 full- and part-time employees, only 32% felt engaged in their work last year; the percentage of disengaged employees has significantly risen since 2020, according to SHRM.  Most of the level of engagement decline was associated with clarity of expectation, feeling connected to the purpose and mission of the company, perceiving the opportunities to grow, and opportunities for employees to exhibit the best contribution 2. Disengaged employees bring detrimental effects to the company. It costs the company nearly 18% of the employee's annual salary. "Quiet quitting" has been common among fully remote employees, which Gallup defined as "they are not actively disengaged but are not being engaged in their work either."  Often, remote employees work in isolation in their own home office, feeling disconnected or feeling apart from the company goals are common challenge among them; this is especially true for companies hiring team members that are geographically dispersed in different cities, uniting each other to work and stay on the same page to achieve a common shared vision might be even challenging.

2. Stay aligned, synchronized, and agile with OKRs

While most remote workers work in an agile industry, such as the software or digital sector, it is even more crucial to use flexible methodologies and measurements to enable the team members to work align in the same direction while staying agile according to the business demands and environment changes.  As an HR technology leading provider for both the hybrid and remote workforce, AYP uses a 13-week OKR plan with SMART goals to provide clarity to all our remote employees.  We do not encourage a one whole year plan as we understand our services might need to adapt according to the changing ecosystem and global customer demand and needs. In such a way, OKR unites all of us together as a team that empowers a change and growth mindset without going through extensive and effortful planning and adjusting long-term performance goals. 

3. How to set good OKRs?

How do we cascade OKRs from objective to key results and initiatives? 
  1. Objectives - What can we change or improve to become more successful?

Example: According to the type of business goal the department can help to achieve in enhancing customer experience by the Product team:

  •  Shorten AYP Global Pay time to value with better product-led onboarding. 
  1. Key results - How will we know that we are improving, and what can be measured on an ongoing basis?
  • Develop a straight-line onboarding experience by:
    • Roof: Achieve a 20% of reduction in the number of clicks
    • Moon: Achieve a 30% of reduction in the number of clicks
  1. Initiatives - What will we do to drive progress on the key results?
  • To conduct bi-weekly reviews on the implementation plan, timeline, progress, and rollout. 
  1. Weekly check-ins - What did we accomplish this week? What should we do in the next quarter?
OKRs provide each independent team member with a linking mechanism to work towards the same direction with each unique contribution and help to improve team performance within a specific time frame. 

4. Collaboration barriers in work efficiency

The second main challenge among the remote team is the lack of cross-functional collaboration. Since team members are dispersed in different geographic locations, working silos or primarily focusing on their specific roles without engaging others could be a common issue, especially when both team members' work is duplicated without communication, and work effectiveness and purpose can be meaningless.   Here is some actual struggle that we have gathered from Gartner's peer community forum discussion:
  • Sharing from an HR manager of a remote company: We have more data now regarding employee interaction; we have discovered that employees are not working in line with the organization as we would think. For example, certain divisions might be a silo department working in their own way, but we can see now that some groups of employees are working effectively siloed off. 
  • Sharing from a technology employee who works remotely: People have trouble delegating their work tasks where workloads are not balanced as expected. In certain quarters, we experience a high volume of incoming tasks with urgency to complete it.

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5. No more guesswork with OKRs

OKR setting allows clear priorities and responsibilities to be outlined and improves team management. Every team will receive objectives to contribute according to the company's vision. At the individual level, each member will set smart goals with committed OKRs (Roof shot) that they agree to execute and achieve. They will also set aspirational OKRs (Moon shot) that will motivate them to challenge themselves to further improvements, although Moon shot will not be easily achievable within the given time frame.  Here is an example of a Business Development Specialist who works in the Sales Department: In this way, OKRs can help prevent employees from working in silos without understanding the company goals and working at the very last minute with ambitious targets and heavy workloads to be completed. 

6. Risk of micromanaging vs giving too much autonomy

One of the key dilemmas most remote leaders face is finding the right balance between micromanagement and granting autonomy to remote employees. Without a proper measurement system, remote leaders might unconsciously micromanage the team in frequent unnecessary meetings or frequently check on the team to ensure that they are working by preventing too much autonomy is given at work.  According to research with full-time remote employees from the International Journal of Business Marketing and Management, they perceive the top challenge is collaborating with others at work.  When asking the remote workers which skills are essential to have when working remotely 3, respondents rated working independently and organizing work tasks as number one, followed by balancing work and home priorities, setting personal goals, and sticking to them.  With clear objectives, key results setting, and the 13-week initiative plan to stay focused, the challenges highlighted above can be improved with a sense of autonomy granted without micromanaging.  How do employers evaluate the effectiveness and benefits of OKRs? 4

7. Performance tracking with accountability

One of the common challenges that most managers experience is the unconscious tendency to react to observable measurements, such as the hours the employees worked and how active they are speaking up in team meetings, to associate it with high performance (5).  Gartner advised that choosing the right metric is essential for remote teams and to measure the performance with outcome-based parameters that reflects the business contribution. Tech CEOs must stop rewarding what used to be leading the company successfully and start thinking of the objectives to define future success with a clear time-bound.  The inventor of OKR, Andy Grove, was well known for his strategies in increasing revenue for Intel from 1.9 billion to 26 billion 5. He was determined to empower employees to be in charge and take accountability in defining their success, whether the goal was to improve customer satisfaction or increasing profits for the company. Grove was determined to help employees to find meaningful purpose in their work and overturned the top-down management approach using the OKRs, where execution is more crucial than just concepts. Every employee is valued for their unique contribution, regardless of position. 

Managing a remote team: Expand without legal restrictions

Setting up a remote team with clear goals and measurements can be challenging. AYP is a leading HR technology solution provider for companies that intend to hire talents everywhere, and we have a customized solution to help you onboard remote employees seamlessly.  Did you know that hiring talents from anywhere using the same employment contract across different countries isn't a compliant way to do so? You might be violating the hiring country's local laws by hiring foreigners in this situation. Engaging an EOR (Employer of record) as your legal employer can help you expand confidently in a lawful way.

References

  1. 6 Trends Leaders Need to Navigate This Year
  2. Gallup: Employee Disengagement Hits 9-Year High
  3. Understanding The Challenges Of Remote Working And It’s Impact To Workers
  4. Developing a shared vision: strong teams have the power
  5. What Matters: OKRs History & Origin
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