KEY RESULT AREAS Management Development

BROAD OUTLINE
Performance Appraisal- a quick look What is a KRA KRAs AND KPIs- relation ship/ Management KRA – for Perf Appraisal Process- Identification of KRAs Role of KRAs KPI Case study

PERFORMANCE APPRAISALAll roads lead to Rome… All efforts lead to improved performance for the Unit…. The Goal Importance of Performance Appraisal:
– Evaluation of employees. – System of giving feed-back to employees. – Important for management for knowing whether performance is up to the mark.

Aligning expectations of management and employees.

What is KRA ?
KEY RESULT AREA General areas of outcomes/outputs; department's role is responsible. Set activity derived out of short term objectives . Change from quarter / half yearly or yearly. KRA should be focussed and it should follow SMART (Specific/ Measurable/ Achievable / Relevant & timer bound). Captures about 80% of the department's work role.

KRA RELATIONSHIP
KRA and KPI are guided by the company’s :*VISION STATEMENT *MISSION STATEMENT *CORPORATE OBJECTIVES *CORPORATE STRATEGY *CORPORATE BUSINESS UNITS/ DEPARTMENTAL PLANS/STRATEGY. FOR THE BUDGET PERIOD, WHICH IS USUALLY 12 MONTHS.

KRA Management
KRAs [ KEY RESULT AREAS are managed by -KPIs [KEY PERFORMANCE INDICATORS] KRA and hence KPI is attributed to the department which can have effect on the business results and is self measured where applicable.

PERFORMANCE APPRAISAL- KRA’S
People will perform as per what is measured. Types of Performance Measures:Self judgments Rate of work Quality of work Accidents & Breakage Job knowledge Job tenure Absenteeism Supervisory judgments Peer judgments

Process – Identification of KRAs
Process of identifying KRA : KRA is a part of PMS (Performance Management System ) which also linked to Appraisal Process : 1) It can start with a KRA format which includes KRA Identified / Objective / Completion date /Review Date / Reviewed by / Remarks 2) The KRA is forwarded to the concerned HOD in the month of March every year once the business plan is over and KRA is derived in accordance with the business objectives for different Positions

Process – Identification of KRAs
3) The HR has to facilitate his/her support along with concerned HOD to identify the KRAs and duly take signature from the concerned HOD and the Subordinate for a reason that both have agreed upon. 4) Once the KRA is derived a copy through mail is being forwarded to the concerned and once the date of review comes , HR has to intervene to understand the outcome of the performance review to put his / her comments on the Appraisal as per performance reviewed on the KRAs. 5) All the KRAs are integrated with the Appraisal form. KRA is one of the most important tool in the total process of Performance Management System which facilitate a perfect communication platform to review and measure performance level .

ROLE OF KRA’S

Setting up of KRA’s Helps focus the employers Helps focus the employees Acts as a precursor of MBO Acts as a tool for appraisal Can be compared easily

ROLE OF KRA’S

Appraisal based on measurables; easy acceptance. Fair system Tool for overall organizational development and performance

ROLE OF KRA’S
Most KRA’s are measurable/ quantifiable. Examples of KRA measurables • Profitability/ Share value/ Sales- CEO
• ESI/ Attrition rate/ Absentism – HR head • Production rate/ Accidents rate/ Defect rateProduction head • Performance increase post training- Trg head • CSI/ sales/ increase in demand- Mktg head

Acts as a focal point for effort by the department/ division

KPIs
Key Performance Indicators. How an organization defines and measures progress toward its goals. Chosen factors that directly and indirectly influence the effectiveness of a product or process. For example KPIs for the HR Department can be Employee Turnover, Employee Satisfaction, Absenteeism, Staff Competency.

KPIs
Help organizations achieve organizational goals through the definition and measurement of progress. The key indicators are agreed upon by an organization and are indicators which can be measured that will reflect success factors. The KPIs selected must reflect the organization’s goals, they must be key to its success, and they must be measurable. Key performance indicators usually are longterm considerations for an organization.

Case Study : HR department
CORE KRA of HR DEPARTMENT: RECRUITMENT/ SELECTION HERE IS AN EXAMPLE OF KRAs, and KPIs FOR HR DEPT., CORPORATE OBJECTIVE / STRATEGY -to gain world market share of 51% HR DEPARTMENT'S OBJECTIVE -Achieve high productivity level in all activities [ say by 10%]

Case Study : HR department
KRA 1 -RECRUITMENT/ SELECTION - KRA Recruitment : KPI ----reduce average time taken to fill marketing/sales vacancies by 15% KPI ----reduce average cost per recruit by 10%

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