Dear Andy,
I understand that OKRs should not be tied to compensation or promotions, but what about other incentives? I would love to find a way to celebrate my staff for their successes! We’re considering offering extra vacation days or something similar for teams that meet their OKRs – is that okay?
Sincerely,
Anita
Hi Anita!
Thanks for writing in.
First off, at What Matters, we’re all about celebrating team wins. There’s a difference, though, between celebration and incentivisation.
While incentives do motivate teams, we discourage leaders from mixing them directly with OKRs, whether that be through raises, promotions, or, yes, even extra vacation days. This is because it often leads to “sandbagging,” in which teams set under-ambitious goals, knowing they’ll achieve them with ease and not stretch themselves to move the needle forward. This approach also encourages teams to focus on short-term results, often at the expense of long-term strategic Objectives.
Incentivizing OKRs is a form of gamification. It often births a “green=good, red=bad” culture, which you want to avoid. Sure, a red OKR is technically a fail, but there is great learning to be found there. If they’re afraid to be honest for fear of losing a bonus, you’ll miss out on feedback that would have made you stronger in the long-run. Through honest discussion teams can refine their skills and learn to express and to test their limitations. Over time, learning from failure sets teams up for success in the next cycle – all things truly worth celebrating!
There are a ton of great ways to celebrate successful OKR endeavors! Consider highlighting wins at your next all-hands meeting, and recognize the team’s great work. Never sleep on the “R” part of CFRs (Conversations, Feedback, and Recognition). What you recognize is what you reward. Personalized recognition in these one-on-one meetings can go a long way! Your team will be very pleased to know their efforts are being noticed and are making an impact.
And hey – if you want to give the team the day off to celebrate big wins, by all means do! But the point is to avoid creating an expectation beforehand. In other words don’t say, “If you hit this OKR, you get a day off.” Instead, say, “You hit this OKR! How should we celebrate? Yes, let’s all take the day!” I’d wager you may even get extra kudos points from the team for going this route. A surprise reward is like finding an extra fry at the bottom of the bag – unexpected and but ever so satisfying.
So, to wrap things up, I encourage you to celebrate your team’s OKRs wins loud and proud – but discourage you from incentivizing them to get there.
Thanks for writing in, Anita, and best of luck to you and your team on your OKR journey.
Sincerely,
Billy from the What Matters Team
