OKRs and KPIs have similar goals, and that’s why people often get confused between these two terms. OKR stands for Objectives and Key Results, whereas KPI means Key Performance Indicators. These goal-setting methods help you to keep tabs on your performance management and progress. These methods act as guidelines in your journey to success in business. So, the question comes, “What is the difference between OKRs and KPIs?”

To understand the difference, first, you must have a clear idea of the definition and functionality of both terms. Let’s dive deep into them and see what they mean and stand for.

What is KPI?

KPIs define the success of an organization in specific activities. The KPI method can be used in different aspects like tracking sales targets, projects, programs, products, and much more. You can quantify the success of any kind of initiative with it, from sales goals to social media interactions.

Since KPI depends on the initiative, its value depends on the action’s value. It can be a unique unit for every business, depending on their goal, method of work, and business plan. The same type of KPIs will not generate the same type of progress for every business. You have to analyze your business policies and future plans for making a custom KPI that can push your business forward. Before deploying them, you must have a clear plan of how this KPI will work to develop and grow your business in the future.

You need to ask several questions while planning and developing a KPI for your business. Let’s look at an example that will make things easy for you to understand.

Suppose you need to set a KPI for Marketing Qualified Leads (MQL). You need to ask the following questions.

• What is the goal?

The goal is to increase MQL by 20% this year.

• Why achieve this goal?

If you achieve this goal, your business will become more profitable by the end of the year.

• How to reach this target?

Depending on your current business situation, you may need to hire more marketing or sales staff, improve your strategies, or create more engaging content.

• Who is responsible for this task?

The marketing head will be responsible for this task, which will be completed under his guidance.

• When will the results reviewed?

The KPI will be reviewed every quarter.

What is OKR?

Objectives and Key Results (OKRs) define an outline of the ‘’objective’’ of a company and its different teams. It also focuses on key ‘’results’’ that indicate the achievement of each objective. It works with your company’s aggressive goals and defines a measurable set of steps that will allow you to achieve the goal. Some well-known companies like Google and Intel are using this method, resulting in a rise in popularity.

OKRs can be set on different levels like company, team, or individual levels. Let’s look at an example to have a better understanding of OKRs.

• Objective: The objective is to increase brand awareness and recognition.
• Key Result 1: Media engagement increased by 18%.
• Key Result 2: Launch a user referral program by Dec 30.
• Key Result 3: Boost social media reach and engagement in a new target marketplace.
• Key Result 4: Publish 5 guest articles on industry-related top-tier websites.

What is the Difference Between OKRs and KPIs?

Both of these terms are used to set goals that will drive business forward. Therefore, it is a common mistake to be confused between these two. For better understanding, we have gathered some of the key points that separate these two terms.

Which One to Choose Between OKRs and KPIs?

Still can’t decide which one to go with? Take it easy because there is no set answer to that question. It entirely depends on what you are looking for and what you want to measure. Before you make your decision on OKR vs KPI, take a breath and understand your goals and process. Let’s look at an example to make it easy for everyone to understand.

Suppose you are trying to upscale or improve a project that has been completed before. In this case, using KPIs will be the best option to go with. Because KPIs are straightforward and will help you measure your progress over time for the company and achievements on your ongoing projects.

On the other hand, if you have a bigger target, like changing the whole direction of a department or company, OKRs will be a better choice. OKRs are made to work with bigger goals and have more depth. It will allow you to attempt a bit creative solutions to achieve your goals and stretch the final target to grow further.

How ProKPI Can Help?

ProKPI is a dynamic employee KPI software that can help you assign, track, manage, and evaluate KPIs effortlessly. Our user-friendly interface and smart design will save you time and reduce the complexity of doing everything manually. Let’s have a look at the core features of this software.

• User-friendly interface for both admins and employees
• Metrics and report system to keep tabs on the assigned KPIs
• Flexible KPI duration of yearly, monthly, and even weekly
• Set as many goals tracking as needed
• The goal approval system is hierarchy-based
• Self-goal assign system
• Smart and presentable report using pie charts, graphs, curves, etc
• The evolution of employee growth mindset and decision-making are easier

In a nutshell, ProKPI has everything you may ask for. If you face any problem, you can contact our 24/7 responsive customer support center. Considering all, ProKPI can be a lifesaver in the KPI assignment and reporting aspect.

The Bottom Line

Although both KPIs and OKRs are used to set goals that can drive your business growth, they are not the same. The main difference between these methods lies in their mechanism and focus point. However, that doesn’t mean that they are not compatible. They can work together as the best combo to push your business to its peak growth and productivity.

FAQs

When to use OKRs?

OKRs are best suitable when you are trying to improve your individual goals or your company goals or suggest any change or new tools to the other leaderships. Simply, you should use OKRs for long-term and big targets.

How do OKRs and KPIs work together?

OKRs are used to set and achieve strategic objectives, with Key Results serving as measurable steps toward those objectives. KPIs track the ongoing performance of specific tasks or processes.

Is OKR better than KPI?

Both KPI and OKR have their specific use cases. OKRs are suitable for aggressive and ambitious long-term goals and serve a more strategic purpose than KPIs. So, it is not about which one is better overall, and it is about which one is more suitable for your specific target.