The problem is that having a formula at the end of a process doesn’t make it objective. People just think it’s objective because all they can see is a little math:
➔ Several companies around the world at least sometimes use spot bonuses or discretionary bonuses to compensate or supplement bonus policies. Both are 100% discretionary and follow subjective rules;
➔ Calculating bonuses based on who has the best negotiation skills to reduce targets is “subjective”;
➔ Projectresource allocations are arbitrary. Sometimes the organization needs someone to turn around a struggling project, which may hurt hisher bonus in the short term - this is usually compensated by a spot bonus.
As with moonshots, I strongly recommend that you don’t adopt morocco mobile database this model right out of the gate. Don’t change your compensation model until your organization has a stable and mature OKR capability.
Sales teams are different because results are easier to measure. You can attach compensation to sales quotas, but you should avoid any model that rewards employees who negotiate a reduction in quota.
Common OKR Mistakes
These are the most common mistakes we encounter in OKR implementations
➔ Set non-measurable key results: Remember John Doerr’s formula. Every key result must be measurable.
➔ Too many OKRs or Key Results: OKR is not a list of everything you do. It represents your top priorities. Less is more.
➔ Include Tasks as Key Results: A Key Result is not something you do. It’s the successful outcome of what you do.