Even seasoned leaders, founders, and HR managers still mix up OKRs and KPIs. On the surface, they both “measure performance,” but their real purpose is completely different. And when organizations treat them as interchangeable, they end up with misaligned priorities, unclear expectations, and teams chasing the wrong outcomes.
Getting this distinction right matters. It dictates how goals are set, how progress is evaluated, and how teams stay accountable. When OKRs and KPIs work together, companies are able to execute faster, read their HR data more intelligently, and strengthen the performance habits that actually move the business forward.
In this guide, you’ll get a practical breakdown of what OKRs are, what KPIs are, how they differ, and how to use each one at the right moment. No jargon, no frameworks for the sake of frameworks, just a clear path to alignment and better results.
What Are OKRs? (Objectives & Key Results)
OKRs are a goal-setting framework designed to create focus, ambition, and measurable progress. They help teams define what they want to achieve (the Objective) and how they will know they’re getting there (the Key Results).
OKRs gained momentum in the early 2000s when John Doerr introduced them to Google, which adopted the framework and made quarterly OKR reviews a company-wide practice. Since then, OKRs have spread well beyond Silicon Valley. Large enterprises, startups, nonprofits, and even traditional organizations now use them to create alignment and drive measurable change. One notable example is Sears Holding Company, which rolled out OKRs to more than 20,000 employees and reported measurable improvements in both individual performance and bottom-line sales.
Objectives: The “What”
An Objective is a clear, qualitative, inspiring statement of what needs to change. It’s directional, motivating, and tied to a strategic priority, something that would meaningfully improve the business if achieved.
For instance:
- Improve our customer onboarding experience
- Expand our presence in a new market
- Strengthen our people operations foundation
Key Results: The “How”
Key Results are the measurable outcomes that indicate progress toward the Objective. They are quantifiable indicators of success, not tasks or activities.
For instance:
- Increase onboarding NPS from 35 → 55
- Lower the time-to-value from 14 days → 7 days
- Launch in 2 new regions with 1,000 active customers each
Well-crafted OKRs push teams beyond business-as-usual. They drive intentional change, innovation, and alignment. This happens especially in fast-moving environments where traditional HR reporting or operational dashboards don’t capture the full picture.
When to Use OKRs
Use OKRs when you need:
- Strategic focus
- Cross-functional alignment
- Innovation or experimentation
- Clear outcomes in a defined time frame (often quarterly)
OKRs are most valuable when teams must shift direction, tackle growth opportunities, or uplevel performance, not when they’re simply monitoring ongoing operations.
Short Example of an OKR
Objective: Deliver a world-class employee onboarding experience for new hires.
Key Results:
- Raise onboarding satisfaction score from 70% → 90%
- Cut the ramp-up time from 60 → 30 days
- Achieve 100% completion of onboarding checklists within week 1
What Are KPIs? (Key Performance Indicators)
KPIs are measurable indicators that show how well a business, team, or process is performing. Unlike OKRs (which drive change) KPIs monitor the ongoing health of the organization. They give leaders, HR managers, and teams a continuous read on whether day-to-day operations are on track.
KPIs work best when they’re tied to clear targets and reviewed consistently. They rely on accurate HR data, financial metrics, or operational insights to highlight trends, flag risks early, and support informed decision-making. In other words, KPIs tell you if the engine is running smoothly, or if something needs attention.
Types of KPIs
There are various types of KPIs, such as:
- Financial KPIs track revenue, margins, cash flow, or cost performance.
- Operational KPIs measure efficiency, production output, cycle times, or service delivery.
- People/HR KPIs evaluate workforce health, such as turnover, absenteeism, or hiring speed. These often rely heavily on HR reporting and real-time dashboards used by HR professionals.
- Customer-centric KPIs monitor customer satisfaction, retention, NPS, or support response times.
When to Use KPIs
Use KPIs when you need to:
- Monitor performance consistently
- Prevent risks by catching issues early
- Maintain accountability across teams
- Track critical processes that should stay stable and predictable
KPIs are essential for business-as-usual operations as they keep the organization grounded while OKRs push it forward.
Short Example of a KPI
Customer Support Resolution Time: Average time to resolve a support ticket stays under 6 hours.
OKRs vs KPIs: What Is the Difference? (The Cleanest Breakdown)
Leaders often ask about OKRs vs KPIs, but the distinction becomes clear once you look at their purpose. Objectives and Key Results exist to create meaningful change, while Key Performance Indicators help teams monitor performance and maintain momentum. Both OKRs and KPIs are essential, but not for the same reasons:
Purpose: Change vs. Maintenance
OKRs are a goal-setting framework built around ambitious goals and measurable key results that drive new levels of performance. They push teams toward desired outcomes that require effort, focus, and a shift in how the organization operates.
KPIs tend to serve the opposite purpose: they maintain ongoing performance by tracking critical metrics tied to stability, efficiency, and the health of existing processes. KPIs provide performance indicators that show whether something is working as expected or needs to be addressed promptly.
Scope: Strategic vs. Operational
OKRs align with strategic objectives, and help the leadership team move the company toward long-term organizational goals. They are cross-functional and often require collaboration across the sales team, product, marketing team, and HR.
KPIs, on the other hand, focus on business performance on an operational level. They reflect ongoing metrics that individual team members track daily or weekly to understand their team’s performance.
Cadence: Quarterly vs. Continuous
Most organizations set and review OKRs on a monthly or quarterly basis, and adjust them as needed when priorities shift or markets change.
KPIs are reviewed regularly (sometimes daily) and form the backbone of organizational performance dashboards. Unlike OKRs, KPI data points rarely change unless the business model does.
Metrics: Outcomes vs. Indicators
OKRs are outcome-oriented, built around a few specific objectives with multiple key results that measure success and simplify OKR metric tracking. They rely on qualitative descriptions for the objective and quantitative metrics for the key results.
KPIs provide business performance metrics, such as customer satisfaction scores, customer retention, sales revenue, market share, or performance measures that help leaders track progress over time. KPI examples are often standalone metrics used to measure performance rather than to inspire transformation.
Ownership: Cross-Functional vs. Team-Level
OKRs usually belong to a cross-functional group or the entire organization. They encourage a collaborative process, help with engaging employees, and support better strategy execution.
KPIs are typically owned by a single team (operations, finance, HR, or sales) because they represent ongoing metrics tied to daily responsibilities. KPIs provide clarity for individual team members and make informed decision making easier.
Comparison Table: OKRs vs KPIs
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How to Decide When to Use an OKR vs a KPI
Most leaders overthink the OKR vs KPI choice. In reality, the decision is simple:
Use an OKR when you need change. Use a KPI when you need consistency.
OKRs help you push toward new strategic objectives, unlock improvement, and create forward movement when the status quo is no longer enough. KPIs, meanwhile, are the important metrics that keep your teams grounded and help you measure progress, track performance, and maintain what’s already working.
How to Quickly Decide
Ask yourself one question: “Do I need to transform something or simply make sure it stays healthy?”
If you need to introduce new behaviors, shift direction, or achieve strategic success, choose OKRs. If you need to monitor performance, maintain standards, or secure a process remains predictable, choose KPIs.
Scenarios to Make It Clear
Take a look at these cases:
1. Low KPI Trend → Launch an OKR
If a KPI starts trending downward (customer satisfaction scores, sales revenue, customer retention, operational efficiency, or market share) that’s a signal. The KPI alone can’t fix the issue, it only reports it.
This is the moment to integrate an OKR with measurable key results to improve performance and reset the trajectory. The OKR helps you define desired outcomes and take intentional steps toward continuous improvement and future performance.
2. Stable KPI → No OKR Needed
If your KPIs are steady and performing within expectations, you don’t need an OKR. The KPI is already helping you track progress, review performance, and determine success. No additional framework is necessary. This avoids the trap of creating OKRs just to “check a box,” and keeps the organization focused on what will actually improve business performance.
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OKRs vs. KPIs FAQs
Q: Should OKRs have KPIs inside them?
A: No. OKRs and KPIs work together, but they serve different roles. KPIs help you monitor performance, while OKRs drive change. A KPI may inform an OKR, but it shouldn’t become a key result.
Q: Can small teams use OKRs and KPIs effectively?
A: Yes. Small teams often get even more value from a few focused KPIs and a few clear OKRs. Keeping both frameworks simple makes alignment and measuring progress easier.
No more copy-paste between HR spreadsheets.
