Why OKRs should not decide bonuses

The request comes up in almost every OKR rollout: if we want people to take these goals seriously, should we link them to bonuses? It sounds sensible. Pay is how organisations signal what matters.

In practice, linking OKRs to pay is one of the fastest ways to empty them of their value.

What changes when a target decides pay

OKRs work because they let teams aim high and say openly how far they got. Reaching 70% of an ambitious key result can be a good quarter. That only holds while missing a target is safe.

Once the score decides the bonus, people do what any sensible person would do:

• They propose targets they already know they can hit.
• They argue over how results are measured, instead of how to improve them.
• They stop reporting bad news early, because early bad news now costs money.

Nobody is being dishonest. The system is asking them to protect themselves, and they do.

Keep the link, lose the formula

This does not mean goals and appraisal should live in separate worlds. People should be recognised for the work behind their OKRs: the quality of their judgement, how they changed tactics when something was not working, how they helped other teams.

What should go is the formula. The OKR score is an input to a conversation about performance, not a number that calculates someone's pay.

Before you decide

If your organisation already pays on OKR scores, unwinding it takes care, and the timing of the change matters as much as the change itself. If you have not started yet, decide how goals and appraisal will relate before the first cycle, not after the first bonus round.

It is one of the questions we check in every Framework Fit Sprint, because it often decides whether OKRs can work in an organisation at all.