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KRA KPA KPI

KRA KPA KPI

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Published by imad rehman
Performance Management
Performance Management

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Published by: imad rehman on Oct 29, 2010
Copyright:Attribution Non-commercial

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06/24/2013

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Key result areas
KRA’s is an acronym for ‘Key Results Area’.Having clearly defined Key Results Areas enables you to take ownership of your job and toaccept responsibility for those areas in which achieving results are your responsibility.Key Results Areas enable you to:Have clearly defined and achievable goals.Measure your progress during the year in terms of identified targets.Manage your skills development.Identify areas for development (skills gaps which exist).Obtain timely feedback that will allow you to change direction when needed.Promote an environment of self-management.
Key Performance Areas [KPA]
When the key results area is large, it is broken into manageable areas formanaging/ evaluation. These sub-sections of KRAs are called KPAFor exampleKRA = Recruitment / SelectionKPA 1= RecruitmentKPA 2 = Selection
Key Performance Indicators [KPI]
To manage each KRA/ KPAs, a set of KPIs are set.A key performance indicator is a financial and non-financial measure used to measureprogress towards a stated organizational goal or objective (KPA / KRA).The benefits of measuring Key Performance Indicators• It can be a very quick way of seeing the actual performance of a goal or strategic objective.• Decisions can be made much quicker when there are accurate and visible measures to backthem up.• Can allow management to see the company or department performance in one place.• A team can work together to a common set of measurable goals.Characteristics of KPI• KPI is always connected with the corporate goals.• A KPI is decided by the middle or top management.• It belongs to an individual who is accountable for its outcome.• A KPI leads to action.• Few in number.• They are indicators of performance desired by the organization.• Easy to understand.• It should be balanced not undermine each other.• Users can gauge their progress overtime.• KPI’s loses its value overtime so they must be periodically reviewed and refreshed.
 
Core KRAs of the HR Department
1.Recruitment/ Selection2.Workforce Planning/3.Diversity Management4.Performance Management5.Reward Management6.Workplace Management7.Industrial Relations8.Safety And Health Workplace9.Building Capabilities And Organization Learning10.Effective Hr Management Systems , Support And MonitoringKRAs are managed by KPAs and KPIs
KEY PERFORMANCE AREAS
These are the areas within the HR Department where an individual or group, is logicallyresponsible / accountable for the results.To manage each KRA/ KPAs, a set of KPI are set.KRA and hence KPI is attributed to the department which can have effect on the businessresults and is self measured where applicable.The evaluation of HR Department can have four levels of perspective.1. Strategic Perspective — the results of strategic initiatives managed by the HR group. Thestrategic perspective focuses on the measurement of the effectiveness of major strategy-linked people goals. For instance, the business strategy called for major organizationalchange programs as the business faced major restructuring and multiple mergers andacquisitions. In this context, the organization’s change management capability will be a keyfactor in the success or failure of its execution. Therefore, measuring the ability of thebusiness to manage change effectively is the core measure of the effectiveness of HR and willbe a key strategic contribution to the future success of the business.EXAMPLES-change management capability of the organization-organization compensation and benefit package with respect market rate.-organization culture survey-HR Budget / Actual-HR Costs Benchmark Externally-HR annual resource plan.-skills/ competency level2. Operational Perspective — the operational tasks at which HR must excel. This piece of theBalanced Scorecard provides answers to queries about the effectiveness and efficiency inrunning HR processes that are vital to the organization. Examples include measuring HRprocesses in terms of cost, quality and cycle time such as time to fill vacancies.EXAMPLES-time taken to fill vacancies-cost per recruitment promotions-absenteeism by job category-accident costs
 
-accident safety ratings-training cost per employee-training hours per employee-average employee tenure in the company-lost time due to injuries-no. of recruiting advertising programs-no. of employees put through training.-turnover rate-attrition rate3.Financial Perspective — this perspective tries to answer questions relating to the financialmeasures that demonstrate how people and the HR function add value to the organization.This might include arriving at the value of the human assets and total people expenses forthe company. HREXAMPLES-compensation and benefits per employee-sales per employee-profit per employee-cost of injuries-HR expenses per employee-turnover cost-employee '' workers compensation costs''4. Customer Perspective — this focuses on the effectiveness of HR from the internal customerviewpoint. Are the customers of HR satisfied with their service; are service level agreementsmet; do the customers think they can get better service elsewhere? Conducting an HRcustomer survey might typically arrive at this.EXAMPLES-employee perception of the HRM-employee perception of the company, as an employer-customer /market perception of the company, as an employer.…………………………………………………………………………………………………………………………………………………………Suppose the Corporate Objective for the organisation is to improve the company competitivepositioning and productivity by 10%.The HR department’s objective for the period is to improve the productivity 10%.This meansKRAs, KPAs and KPI [shown in brackets] for HR.KRA 1 -Recruitment/ SelectionKPA 1- Recruitment[KPI= average time taken for recruitment per employee = 2 months]KPA 2 -Selection[ KPI = average cost per new employee = INR xyz====================================KRA 2- Performance ManagementKPA 1 - Performance Appraisals[KPI = all staff to be appraised at least once annually]KPA 2 - Succession Planning[ KPI = 8 Potential staff to be identified and talent managed]=================================================

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