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Setting Performance Targets for Employees through Agile and OKR Strategies

Updated: Jan 18

How do you measure the true impact of your goal-setting strategies and performance targets in your organization? In the fast-paced corporate sectors of Asia whether in fast paced developed countries like Singapore, or rising markets like Vietnam or Indonesia, understanding the nuances of effective goal setting and performance management is crucial.


The key to success in this realm is not just about setting benchmarks; it's about creating a culture where goals are not just numbers on a spreadsheet but are deeply integrated into the fabric of the organization. This approach calls for a shift from traditional performance metrics to more dynamic and adaptable frameworks. It's about understanding that the goals we set for our employees should resonate with the larger vision of our company, fostering a work environment that is innovative, adaptable, and most importantly, aligned with the aspirations of a modern workforce.

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In this article, I will share insights and strategies for effectively creating change in your organization to effectively set and measure performance targets for employees in the unique business landscapes of Asia.



Key Terminology

Term

Definition

Top-Down Management Style:

Top-down management involves a hierarchical approach where decisions flow from higher-ups to lower levels

OKRs vs KPIs:

OKRs (Objectives & Key Results) sets ambitious goals and key results for alignment and motivation, while KPIs (Key Performance Indicators) are specific metrics measuring performance in critical areas, providing granular data.

Agile Methodologies:

Agile methodologies are flexible, iterative approaches to project management, prioritizing adaptability, collaboration, and customer feedback for responsive and customer-centric project delivery.


Rethinking Employee Performance Targets in Today's Corporate World


The definition of employee performance has evolved significantly over time. Traditionally, performance was measured through Key Performance Indicators (KPIs), which focused primarily on quantifying an employee's output — the number of tasks completed, the speed of completion, and the quality of work. This method, though effective in its time, assessed performance in a rather linear fashion, emphasizing quantity and deadlines.


However, the contemporary corporate landscape demands a more engaging and inspirational approach. With the shift towards agile methodologies and Objectives and Key Results (OKRs), the focus is no longer solely on the volume of work done. Instead, the emphasis is on the results. In this new framework (used by some of Silicon Valleys most successful startups), performance is not just about ticking off tasks on a checklist; it's more about impact, and how the employee’s output is contributing to the overall success of the organization.


The Essential Role of Goal Setting in Employee Performance


Goal setting is a crucial aspect of enhancing employee performance. It's not just about financial rewards, like salaries and bonuses, which of course play a part. But there's more to motivation than just money. Indeed, many employees are also driven by understanding the impact of their work in the organization.



It's not enough to focus on daily tasks, you need to look at the impact of this work. Measuring performance now goes beyond just ticking off tasks; it involves assessing the contribution of these tasks to the broader goals of the company.


By setting clear goals, we give employees a sense of purpose and direction. They can see how their efforts contribute to larger company objectives. This approach not only motivates but also aligns their work with the overall success of the organization. For HR managers, this means creating a goal-setting framework that goes beyond traditional measures and taps into the deeper motivations of employees, thereby enhancing their performance and contribution to the company.


Key Considerations for Setting Performance Targets for Employees


When setting performance targets for employees, it's essential to consider the nature of the jobs they are doing. Are the tasks repetitive or require low skill, where performance can be measured on a KPI basis? In such cases, it's important to assess whether tasks are completed on time and to evaluate the quantity and quality of the output. This approach is common in environments like factories or call-centers.


But for work in organizations where people have to work together, and innovate and have new ideas, it is crucial to align goal setting not just for individual employees but ideally for teams, and to have clear result-driven goals at the company, team, and project levels. So it's more about soft skills, about maybe even peer to peer feedback from the team, and then measuring the real performance, the real work output on team level, not on individual level.


Fostering Collaboration in Goal Setting


To foster a collaborative goal setting process, it's essential to start collaboratively from the top. In an OKR framework, this means moving away from the notion that just a few individuals, such as co-founders or executives, dictate the company's strategy and goals. Instead, the process should begin with an inclusive workshop involving a diverse group, including co-founders, C-level executives, and mid-level managers.


This initial workshop is a brainstorming session to define the company's direction and set goals at a broad level. The focus is on overarching themes like product development, market expansion, or process consolidation. These broad goals then later form the foundation for more specific, shorter-term objectives.


It's crucial not to create separate goals for each department right from the beginning. Doing this can create barriers between different parts of the company. By focusing on goals that involve different projects rather than just departmental tasks, companies can make sure everyone works together towards shared objectives from the start.



What metrics should be used to evaluate employee performance?


When talking about how to measure success in the workplace, it's important to look at both the results and the actual work done. In an OKR setting, we focus on what employees achieve – like how their work helps customers, affects the market, or contributes to the product development and sales. But it's not just about big achievements.


We also need to look at everyday tasks, like completing a specific job, making a design, or preparing a financial report. It's important to check if these tasks are done on time and well. But more than that, we should ask: what's the impact of this work? How does it help the company's goals?


So, we use two types of measurements: one for the work done and another for the impact of that work as a team. It's not enough to just finish tasks; we need to understand how these tasks help the company grow, whether in its products, marketing, or processes. This way, we make sure we're not just doing tasks but actually achieving important goals for the company.


Specific Challenges in Measuring Employee Performance in Southeast Asia


In Southeast Asia, measuring employee performance presents unique challenges, particularly due to the prevalent top-down and KPI-driven approach in many companies. This issue often stems more from the leadership side not being ready to change to a more agile methodology, more than from the employees themselves.


To successfully implement OKRs (Objectives and Key Results) or a more agile way of working, two critical changes are necessary:


Firstly, leadership needs to embrace a more collaborative style of goal setting. This involves letting go of some control and actively involving teams in the goal-setting process. However, a common obstacle is that mid-level management, especially at the head level, tends to resist this change. They often prefer to maintain departmental silos and full control over their teams, avoiding collaborative goal setting.


Secondly, the readiness of teams to engage in this new approach is crucial. Do they want to be included in goal setting? Can they contribute ideas? This requires assessing which teams are prepared for a more result-oriented approach to goal setting.


Therefore in many cases, a mixed approach of OKRs and KPIs is adopted to address these challenges.


One of the major barriers to keep in mind is the reluctance of management to fully commit to this change.


Navigating Employee Performance Challenges for Foreign Companies in Southeast Asia


Foreign companies in Southeast Asia face unique challenges in employee performance management. One such problem is high employee turnover rates. Dealing with high employee turnover rates demand a focus on what genuinely motivates the workforce, whether it's financial incentives or a desire for collaborative environments.


Another critical issue is the prevalent top-down management style which employees have become accustomed to. Despite the strong work ethic in countries like Vietnam, Singapore, Thailand, Philippines, and Indonesia, employees often await instructions rather than taking the initiative, reflecting the top-down culture. Therefore, you should take into consideration that effective middle management is essential to balance fair evaluations and prevent dependency between employees and managers.


To encourage proactivity, training for middle managers and creating feedback channels for employees is vital. Adopting a projectized structure can also help, allowing employees to showcase their skills in varied projects and fostering a more dynamic and engaged workforce.


How can OKR Asia help in Enhancing Employee Engagement in Southeast Asia?


For foreign companies in Southeast Asia struggling with high turnover and performance issues, our services offer a solution. In our employee experience services we focus on understanding employee motivations and improving their experience. Our strategy involves analyzing employee satisfaction, addressing management dynamics, and transitioning to a project-oriented goal setting. This approach leads to a more engaged, diverse, and effective workforce, helping companies stabilize and enhance their team's performance.


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