What are KPI and OKR? Differences and similarities between them
Posted: Sun Jan 26, 2025 6:07 am
What is KPI? KPI (Key Performance Indicator) is an index of work performance, often used to evaluate the performance of a position, department or the entire company. Each position usually has a job description or monthly work plan, and KPI is used to quantify work performance based on pre-agreed criteria. Based on KPI results, the company can apply reward or discipline policies for individuals and groups.
What is OKR? OKR (Objectives and Key Results) is a method of managing objectives and key results, used to set goals for the entire organization. OKR consists of two parts: Objectives (Objectives) are what you want to achieve, and Key Results (Key Results) are quantitative measures that show how you have achieved the objectives. OKR helps to align and create participation of the entire organization around measurable goals.
Similarities between KPI and OKR
Both KPIs and OKRs are tools used to measure performance.
Both aim to improve individual, departmental and company performance.
These metrics all use specific data to track and evaluate performance.
KPIs and OKRs are both used to boost employee motivation.
The difference between OKR and KPI
KPI OKR
Purpose - Evaluate past performance - Drive future performance
Nature - Aim for achievable usa business fax list goals, consistently achieve 100% - Aim for challenging, ambitious goals, not necessarily achieving 100%
Salary and bonus - Usually associated with salary and bonus - Not directly linked to salary and bonus
Approach - Look back to the past to evaluate an individual's performance - Focus on the present and the future, considering whether and how we will achieve our goals
Quantity - Unlimited number of KPIs - Includes 1 Objective (qualitative) and 3-5 Key Results (quantitative)
I will give a more specific example of KPI and OKR for readers to visualize:
KPIs are usually indicators such as: Conversion rate, customer retention rate, revenue, profit, etc. On the other hand, OKRs are broader and more strategic indicators such as: "Successfully launch CloudSALES software in the next 90 days"; KR1: Achieve 1,000 average daily visits. KR2: Satisfaction rate of 90%. KR3: Conversion rate of 30%.
What is OKR? OKR (Objectives and Key Results) is a method of managing objectives and key results, used to set goals for the entire organization. OKR consists of two parts: Objectives (Objectives) are what you want to achieve, and Key Results (Key Results) are quantitative measures that show how you have achieved the objectives. OKR helps to align and create participation of the entire organization around measurable goals.
Similarities between KPI and OKR
Both KPIs and OKRs are tools used to measure performance.
Both aim to improve individual, departmental and company performance.
These metrics all use specific data to track and evaluate performance.
KPIs and OKRs are both used to boost employee motivation.
The difference between OKR and KPI
KPI OKR
Purpose - Evaluate past performance - Drive future performance
Nature - Aim for achievable usa business fax list goals, consistently achieve 100% - Aim for challenging, ambitious goals, not necessarily achieving 100%
Salary and bonus - Usually associated with salary and bonus - Not directly linked to salary and bonus
Approach - Look back to the past to evaluate an individual's performance - Focus on the present and the future, considering whether and how we will achieve our goals
Quantity - Unlimited number of KPIs - Includes 1 Objective (qualitative) and 3-5 Key Results (quantitative)
I will give a more specific example of KPI and OKR for readers to visualize:
KPIs are usually indicators such as: Conversion rate, customer retention rate, revenue, profit, etc. On the other hand, OKRs are broader and more strategic indicators such as: "Successfully launch CloudSALES software in the next 90 days"; KR1: Achieve 1,000 average daily visits. KR2: Satisfaction rate of 90%. KR3: Conversion rate of 30%.