PERFORMANCE MANAGEMENT

- KRAs KPIs

PERFORMANCE MANAGEMENT
It is the technique for beginning with the end in mind. It involves analyzing the objectives & goals for your Deptt. or work unit and ensuring that they relate to the overall goals of your company.

COMPONENTS OF PERFORMANCE MANAGEMENT

KEY RESULT AREAS
KEY PERFORMANCE INDICATORS GOALS

KEY RESULT AREAS

Key Result Areas or KRA's refer to general areas of outcomes or outputs for which the department's role is responsible. KRA's is the set of activities on which performances are rated. Key Result Areas or KRA's refer to general areas of outcomes or outputs for which a role is responsible.

KEY PERFORMANCE INDICATORS

KPIs serve as the gauges which are used to evaluate how well you have achieved your key results. KPIs split into 2 types:a) Direct Key Performance Indicators relate directly to a key result area. b) Indirect Key Performance Indicators apply where it is not possible to directly measure a key result area.

GOALS
These are the tools to tell how to achieve your Key Result as per the desired standards. Goals should be challenging, timebound & measurable. Goals should be in line with Mission, Vision, KRAs & KPIs.

WHY TO IDENTIFY KRAs?

Identifying KRAs helps individuals Clarify their roles. Set goals and objectives. Focus on results rather than activities. Align their roles to the organizations business or strategic plan. Prioritize their activities, and therefore improve their time/work management. Communicate their roles purposes to others Make value-added decisions.

EXAMPLES
For Marketing Deptt. :a) If KRA is Sales then KPIs will be :Revenue over a given time. Units sold. b) If KRA is Profit then KPIs will be :To achieve annual sales. Annual profit achieved.

EXAMPLES
KRAs of Finance & Accounting include :1. 2.

3.
4. 5. 6. 7. 8. 9. 10. 11.

12.
13.

Credit referencing Capital expenditure Security Financial analysis Cost control Internal audit Regulatory reporting Credit control Financial records Payroll Cash flow forecasting Budgeting Costing

EXAMPLES
KRAs of Manufacturing include :elimination of wastages in production improving throughput efficiency process efficiency etc.

KPI could be
reducing back orders[ nil %] improving targeted delivery date [ 98%]

EXAMPLE
KRAs of Quality include :Quality KPIs could be :Measure defects per million. Knowledge of quality principles demonstrated by team. Measure quantity of feedback from customers.

EXAMPLE
KRAs of Design include :Introduce new products KPIs could be :No. of new products introduced in a given period. Percent of revenues reinvested in R&D.

EXAMPLE
Manufacturing KRAs include Stock control Maintenance Labour relations Waste Reworks Productivity Health and Safety Quality control Record keeping

KPI FOR THE VARIOUS KRAs should be -Quantity oriented :Number of units produced/published/sent/received/processed/deadlines Calls per hour/day/week New products introduced Grievances per 100 employees Staff turnover Customer complaints and compliments Error rate or reworks Returned goods Sales increased Profit increased Increase in market share

-quality oriented -time oriented -cost oriented or a combination .

COST 1.Variance against budget 2. Profit 3. Waste 4. Overtime incurred 5. Speed TIME Reduction in number of minutes/hours/days etc. Deadlines and schedules met Average call response time Projects completed per week/month etc. Number of minutes between customers