OKRs vs. KPIs for Engineering Teams: Stop Measuring the Wrong Things

If everything is a priority, nothing is. KPIs measure your health; OKRs measure your ambition. Confusing the two is the fastest way to demotivate a high-performing engineering team.

The Dictionary Definition

KPI (Key Performance Indicator): A metric you want to maintain. (e.g., Uptime> 99.9%, Latency < 200ms). This is the "Health Monitor."
OKR (Objectives and Key Results): A goal you want to achieve. (e.g., Launch the new Mobile App). This is the "Roadmap."

The "Health Monitor" vs. The "Roadmap"

Think of your team as a car.

Your KPIs are the dashboard lights: Fuel, Oil, Speed. You don't get a bonus for having a full tank of gas; you just don't die.
Your OKRs are the GPS destination: "Drive to San Francisco in 2 days." You do get a bonus for that.

Why Engineers Hate OKRs

Engineers value predictability. OKRs are inherently unpredictable. When management sets an arbitrary goal ("Increase velocity by 50%"), engineers react by sandbagging their estimates.

The Fix: Engineering OKRs must be "Input-Based" or "Outcome-Based," never "Output-Based."

Bad OKR: "Ship 10 features." (Output).
Good OKR: "Reduce onboarding time from 3 days to 3 hours." (Outcome).

The Google Model: Stretch Goals

At Google, hitting 70% of your OKR is considered success. If you hit 100%, you aimed too low. This psychological safety is essential. If people are punished for missing moonshots, they will stop taking shots.

Examples of Great Engineering OKRs

Objective: Making Deployment Boring

KR1: Increase deployment frequency from weekly to daily.
KR2: Reduce Change Failure Rate < 1%.
KR3: Fully automate the rollback process.

Conclusion

KPIs keep the lights on. OKRs change the business. You need both. But for the love of code, do not make "Lines of Code" a KPI, or your developers will start writing very verbose Java.