KRA and KPI

KEY RESULT AREA

Key result area (KRA) are strategic factors where in positive results must be realized in order to achieve the organizations strategic goals. They are used to denote the assignments of task and duties to employees.

Each employee is given a set of KRA (generally 4-5). KRA gives an individual a clarity to his role. The employee is hence aware of what are the expectations of the superior has towards him/her.

KRA is a strategic area where excellent performance is required. Key result areas are also referred to “critical success factors”.

The various KRA are given weightage. Weight of each KRA is determined based on the scale of priority. Total of all the weights should be equal to 100%.

KEY PERFORMANCE INDICATORS

Key Performance Indicators (KPIs) are quantifiable metrics, which provides an indication as to whether the organization is making progress towards achieving that KRA.

For each KRA there are dedicated KPI(s). These are set at the beginning of the assessment period. At the end of the performance period the employees’ achievement towards that objective is measured.

The weight of each KRA is divided among its KPI.

Each KPI will have a target score.

KPIs are subsets of KRAs. Once you have a KRA in place, you can get a definitive and measurable KPI.

EXAMPLE

KRA: Recruitment ( if weightage is 45 %)

KPI:

  • Time to fill (15%)
  • Qualified Candidate per hire (10%)
  • Quality of Hire (10%)
  • First year retention rate (10%)

For each KPI we have a target and we measure the employee performance against that target.

e.g Time to fill we have a target that a TAT achievement above 90 % will give a 5 rating. So 90 % = 4.5 rating as 100 % = 5 rating.

So our target is 4.5. We then calculate the recruiter TAT % and find out his/ her rating.

So a TAT% of 70% will give us a rating of 3.5.

  • Target: 4.5
  • Achievement: 3.5
  • Achievement percent: 3.5/ 4.5 = 78%

The weightage for time to fill is 15%. So the weighted score is 12% (78% * 15%)

So all other KPI(s) in recruitment will be calculated to get their individual weighted score.

Summation of all the KPI weighted scores will give us the score for recruitment KRA.

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