Choose for the work, not the acronym
A goal-setting framework shapes what managers discuss, what employees prioritise, and what evidence is available at review time. The best framework is not the one with the most fashionable name. It is the one that makes expectations clear for the role and gives managers a practical way to review progress fairly.
OKRs: objectives and key results
OKRs pair a clear objective with measurable key results. They are often useful for fast-moving teams where priorities can be expressed in outcomes and reviewed frequently—for example, product, growth, commercial, or delivery teams.
OKRs work best when teams are clear about whether they are being used for focus, learning, or formal review. Stretch goals can be useful, but managers should not create mixed messages about what success means in the organisation’s own performance process.
Management by objectives: clear commitments
Management by objectives, often called MBO, centres on a manager and employee agreeing concrete objectives for a defined period. It can be a good fit when roles have clear deliverables and employees need a direct line between expected outcomes and regular review conversations.
Its main risk is rigidity. Build in a clear way to revisit objectives when business priorities shift, so employees are not assessed against work that has stopped being relevant.
Competency frameworks: how work gets done
Competency frameworks describe the behaviours, judgement, and capabilities expected at a role or career level. They can add useful context where the quality of leadership, collaboration, stakeholder management, or technical practice matters alongside delivery.
They need plain-language definitions and manager guidance. Without that, behavioural labels can become vague and inconsistent. Pair competencies with concrete examples and make room for an employee’s perspective in the conversation.
Most teams use a considered blend
Many organisations combine outcome-based goals with a small set of role-relevant competencies. The combination should be designed deliberately: employees should know what they are expected to deliver, how their contribution will be discussed, and how any changes will be recorded.
Different departments can use different goal formats when the work calls for it. Keep the final review language and manager guidance coherent across the organisation so that people can understand the process regardless of team.
Questions to settle before you launch
- Which business outcomes should each role influence this cycle?
- What evidence will managers and employees use in check-ins?
- When and how can a goal be updated?
- Which capabilities matter for the role, beyond the final outcome?
- How will managers apply the framework consistently?
Where to go next
Read our practical guide to performance management, then explore lvlst performance management to run goals, review cycles, and HR oversight in one place.