The Impact of OKRs on the Employee Experience

Key takeaway: Improving the employee experience at your company creates clear benefits like productivity, retention, and engagement, among many others. Choosing OKRs ideally positions you to develop a positive employee experience through purpose-driven work, strategic clarity, and shared ownership.

It’s no secret — happy employees are more productive, committed, and self-directed than their less happy counterparts. So how do you create more happy, productive employees? It starts with the employee experience.

To put it simply, employee experience is the connection an employee has with your company. It’s shaped by interactions an employee has throughout their employee lifecycle and is impacted by the people, processes, and technology they interact with day-to-day.  

To create a well-rounded employee experience, your organization needs to focus on giving employees what they need to thrive in their work environment. Today’s employees want:

• A clear understanding of what is expected of them
• To know how their work fits into the bigger picture
• A clear line-of-sight into how they can impact the business

They also want ongoing feedback on how they’re doing against those expectations and recognition by their peers and leaders for their contribution. 

It’s no question: focusing on your employees pays dividends. Engaged employees:

• Generate greater revenue (20% more to be exact)
• Offer better customer service (think: doubling customer satisfaction)
• Stay in jobs longer
• Improve agility with their adapt and grow mentalities

It should be no surprise that nurturing the employee experience remains a top strategic initiative for 80% of executives.  

But the question of how to create a positive employee experience is, of course, another matter. As the generational makeup of the workforce shifts, this question becomes more complex and urgent.  

While supporting the employee experience should be a key area for every organization, many businesses struggle with focusing on the employee experience while trying to execute lofty, big picture organizational goals. To do this, companies need more practicality to support and elevate every other initiative you enact.

That’s where objectives and key results (OKRs) come in.

So how exactly do OKRs create an employee experience people are eager to be part of? 

Objectives supply the big picture outcomes the organization is aiming for across a certain span of time, while key results provide signposts, defining measurable success along the way and at the finish.  

Employees expect their jobs to bring a significant sense of purpose to their lives. Employers need to help meet this need or be prepared to lose talent to companies that will. 

- McKinsey

To help understand how OKRs and employee experience work together, let's look at the link between the structure OKRs provide and their impact on the quality of the employee experience through six interconnected benefits:

• Compelling vision
• Clarity and team alignment
• Flexibility and ownership
• Personal and professional growth
• Connection and belonging 
• Resiliency and innovation

See the similarities between the benefits of OKRs and employee experience

Today’s employees are looking for meaning and purpose, not just a paycheck. That sentiment is quickly growing into a non-negotiable. More than half of employees reported that the pandemic increased their desire to contribute to society, with 77% of Gen-Z employees saying it’s important for their employer’s values to align with their own. Unfortunately, only 18% of current employees say they get as much purpose from their work as they’d like.  

With that being said, companies who inspire their employees stand to gain a huge competitive advantage in employee experience and retention. OKRs shine when it comes to supplying the meaning and purpose employees are looking for. The reason? They allow you to clearly express the why behind the what for your business’s goals.  

What’s the ultimate good you’re trying to achieve? Equal access to the service you provide? Affirming dignity through consistent care? Whatever it is, take the opportunity to talk about it. 

To elicit buy-in, put action behind your company mission and values by crafting meaningful objectives that are backed by a transparent, worthwhile vision. And while it may be true that profit is a result of your work, it’s never the real meaning. 

If buy-in for the objectives is high, engagement will be high too. When people understand the ways in which their work matters to the greater good, it builds intrinsic motivation. And meaning and inspiration keep us going much longer than a mere deadline or to-do list.

Improve how you define a compelling mission and vision for your teams

Unfortunately, only 50% of employees globally say they know what’s expected of them at work, leading directly to anxiety and disengagement. Nobody likes the feeling of spinning their wheels, but that’s exactly what happens when employees don’t have a clear understanding of team or organizational goals and their part in them.  

OKRs present a huge opportunity for organizations to communicate better and make a difference for their employees. They ensure everyone is on the same page and moving in sync toward the goals your business wants to accomplish.  

Three key capabilities of OKRs contribute to alignment and clarity:

1. Goal conversations: Objectives help your teams define the most important outcomes, while key results give a clear definition of success.
2. Transparency: OKRs are open access and collaboration-dependent, keeping everyone informed (in real time) of who is working on what.
3. Check-ins: The OKR cadence creates a habit of progress checking, reducing the lag time for communication on how to iterate and improve.

When employees have better clarity on their work and are strongly aligned with the purpose of their organization, they are more likely to stay at a company for the long term. Not only do they experience a more satisfying and productive return on effort, but they also understand how their work impacts the organization as a whole.  

OKRs help translate organizational aspirations into a format that’s brief, understandable, and memorable. When people are clear on how to succeed, their confidence grows.

Learn why OKRs are optimal for aligning the hybrid workforce

In the framework of OKRs, leaders — often the executive team — set the objectives for the year or quarter. They paint a vivid image of where the organization intends to go.  

For example, “In order to serve the people of Nakuru, Kenya with accessible banking options, we will have nine new branches open by the end of Q2.” (Did you spot the greater purpose?) 

From there, departments, teams, and individual employees set their own key results, each specifying the part they’ll play in bringing the vision to reality. They define the metrics of success, set waypoints, and formulate a plan.

What’s the payoff for employee experience?  

First, employees are affirmed in their ownership of their work. They can see what’s been entrusted to them, what’s at stake, and what accountability looks like. 

Second, employees have two forms of flexibility:

• To set their own goals in collaboration with their manager and team
• To decide how their work gets done — this could mean the freedom to choose working hours, location, learning opportunities, order of projects, or collaborators  

How big of a deal is flexibility?  

A 2022 McKinsey report showed that flexibility was the top influence for employees to accept their current jobs, while a report produced by Harvard and MIT found that job autonomy is one of the most important predictors of job satisfaction and workplace motivation. 

A final benefit? Flexibility strongly correlates with improved employee mental health and overall levels of well-being. 

According to a 2022 survey by McKinsey, a lack of career development opportunities drove more employee resignations than any other factor.

When asked what caused them to leave their jobs in 2021, employees gave nearly the exact same answer: “A lack of personal progress.” 

OKRs provide a sound part of the solution. They should, by nature, inspire people to aim high.  

What does that do for employee experience? For one thing, it attracts high performing individuals. Talented people are always on the lookout for workplaces that will help them grow personally and professionally.  

In addition, the embedded cycles of setting KRs provide managers with a consistent opportunity to coach team members into the fullness of their strengths. They work with employees to set ambitious, but achievable goals, then supply learning paths for the skills and experiences necessary to develop in their current role and beyond. 

And the repetition of setting KRs can help employees fine-tune their self-understanding. Some tend to set goals that are too ambitious, others project far too conservatively. Creating KRs every quarter (bolstered by the safety of knowing they can adjust mid-cycle) offers employees a chance to learn capacity:  

• Preferred work-life balance
• Personal energy levels
• Resilience to stress
• Areas of efficiency
• Opportunities for growth

Over time, they get better and better at making accurate projections. 

Goal setting also has the capacity to strongly impact psychological wellness. We get a natural confidence boost when we set and achieve goals for ourselves —especially if they’re tied to our values. 

Harder goals lead to greater emotional payoff. That’s the beauty of OKRs for employees: people are asked to stretch and are supported on the way to success.

As humans, we long to be part of something bigger than ourselves — a community, a culture, a world-changing organization. OKRs can help make the connection. When a business’s objectives are worthwhile and employees understand the critical part they play in its success, they recognize that they really do belong as essential members.  

OKRs highlight the connections between individuals and departments. In fact, Gartner recommends eliminating “outsiderness” as one of their steps for increasing a sense of belonging in the workplace. 

With OKRs, no one is an island or an outsider. It becomes clear that everyone is in some way dependent upon someone else in the organization for success.  

For instance, operations will have a hard time meeting their KRs without sales, and sales won’t meet their KRs unless finance is running smoothly. That leads to more opportunities for gratitude and when others come through.

In addition, the rhythms of OKRs provide natural moments to recognize individuals and teams for effort and progress along the way. Ideally, you’ve created a culture in which praise flows in all directions — up and down the hierarchy of leadership, between peers, and across departments.  

And when the organization as a whole achieves its objectives, it’s time to celebrate what you’ve all accomplished together. In fact, more than 4 in 5 employees who receive recognition at work report a more positive experience.  

Finally, when employees see the reality of their interconnectedness, it leads to a greater sense of responsibility. People understand the consequences for their team members — and even the health of the organization — if they don’t come through with their KRs. When we can see the ways other people depend on us, it elicits greater engagement and a deeper sense of reward when we accomplish our goals. 

Those who experience belonging at work are three times more likely to look forward to coming in each day, and five times more likely to want to stay. 

Learn how OKRs can build a DE&I-focused work culture

Companies with top tier employee experience strategies are 4.3X more likely to achieve effective innovation compared with companies who aren’t investing as thoughtfully in their employee experience programs.  

When employees are clear on the big picture (the objectives), focused on the benchmarks (key results), and empowered with freedom, they create innovative solutions.  

OKRs can be a key part of that, shaping a company culture that’s pro-experimentation.  

Organizations that get the OKR system right don’t prescribe the steps for success — they inspire alignment and then empower team members to find a way. They welcome ideas, reward creativity, encourage appropriate risk-taking, and normalize mid-cycle tweaks based on data.  

These organizations cast their votes in favor of responsive decision making over rigid plans.  

By nature, the rhythms of setting and tracking KRs support a growth mindset — failing-forward, fast-failing, and fast-learning. If results aren’t measuring up to projections, it’s time to try something else. It’s time to innovate.  

When you create a culture in which it’s known that you’ll aim high and pivot as needed (without shame), you get psychological safety. That’s a huge win for the employee experience — not only are your employees more resilient, so is your business. 

The ROI speaks for itself: employee experience works. 

Ultimately, providing a great employee experience comes down to creating a workspace people want to be part of. That reality may be rarer than we realize as a mere 39% of global employees report feeling satisfied with the way their needs are being addressed at work.

The good news? Many of those felt needs are outcomes that OKRs can help supply: meaning and purpose, opportunities for growth, flexibility and ownership, connection and belonging, and a chance to innovate. Those are power tools in your employee experience arsenal, and we’re here to help you use them.

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