[wyuenho]

There is this thing called stretch goals in OKR that is supposed to be really hard to achieve. So if you meet all 100%, you either don’t have these stretch goals or the team is lying.

Now of course, whether OKR works depends on culture as well. Sometimes, asking people to stretch amounts to asking them to work harder, so naturally the system will be gamed in that context.

[mitthrowaway2]

What we are learning from this thread is that OKR completion percentage is a very bad surrogate metric for OKR difficulty. That's not surprising; it's very hard for managers to evaluate the ambitiousness of individual OKRs unless they are technical experts, whereas completion percentage is an easy surrogate that should correlate with effort and achievement difficulty. Completion percentage is easily and directly measurable, so of course the CEO rewards that instead. Except that it correlates positively with effort and negatively with difficulty, so it cannot simultaneously incentivize working hard on difficult tasks, resulting in terrible counter-incentives and gaming.

[mejutoco]

If the KPI is not an objective number (for instance, profit ratio or absolute revenue or Lifetime Value per Customer for x vertical) available on a dashboard I think it is not useful.

You can set up OKRs like improving customer experience and, at the end of the day, someone will declare that they have been accomplished or not based on their preference of employees or mood. That is functionally the same as saying this bonus is optional and we might give it to you if we feel like it.

It is a pity because well chosen KPIs that employees try to optimize for can make a company work great. But they need to be _very_ well chosen. This, like economics indicators, often requires creativity and technical knowledge.