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 APPRAISAL-
All 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 rate-
Production 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 long-

term 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%
THANK YOU