A Key Performance Indicator (KPI) is a specific measure of an organization’s
performance in an area of its business. It is a general concept, with different
implementations depending on the type of business and goals of the organization.
From the perspective of balance scorecard, KPIs can be categorized by financial,
customer, internal processes and learning&growth.
For more information, you can refer to www.smartKPIs.com
Key Result Areas [KRA]
“Key Result Areas” or KRAs refer to general areas of outcomes or outputs for which the
department's role is responsible. A typical role targets three to five KRA.
Key Result Areas(KRA) is like overall function of an employee,
Key Perfomance Area (KPA) Perfomace Required ares
Key Perfomace Indicator(KPI) How , When you achievd your assigned targets?
Eg: For HR,
All areas is your KRA
Recruitment is Your KPA
How much time taken for filling the Vaccancy will be your KPI.
KRA refers to general areas of outcomes or outputs for which a role is responsible.
KRAs helps individuals, Clarify their roles • Align their roles to the organization’s business or
strategic plan. Focus on results rather than activities.
SALES MANAGER 'S KRA -sales growth % -market share growth % -no. of new customers etc
etc .
KEY PERFORMANCE AREAS [KPA] These are the areas within the ORGANIZATION
FUNCTIONS, where an individual or group, is logically responsible / accountable for the results.
***To manage each KRA, a set of KPA / KPI are set. KPA and hence KPI is attributed to the
person who can have effect on the business results and is self measured where applicable
Example:1 KRA = Recruitment / Selection KPA1 = Recruitment KPA2= Selection Example:2
KRA = Employee Benefits KPA = providing all statutory benefits (ESI, PF…) KPA = providing all
other benefits provided by company. India's TOP15 best cities for IT-BPO growth KEY
PERFORMANCE INDICATORS
INDICATORS (KPI) Select a KPI for each KPA, which would enable the individual to improve
performance to achieve the objectives.
KRA2 - WORKFORCE PLANNING/ DIVERSITY KPA1 - ANSENTEEISM [ KPI = absent rate
at5%] KPA2- TURNOVER [ KPI = turnover rate at7%] KPA3- DIVERSITY [ KPI =3 FEMALES
TO BE INDUCTED INTO MANAGEMENT CADRE]
KRA1 - RECRUITMENT/ SELECTION KPA1 - RECRUITMENT KPI1 - Average time taken per
employee2 months KPA2 -SELECTION [ KPI = average cost per new employee RS10,000]
KRA3- PERFORMANCE MANAGEMENT KPA1 - PERFORMANCE APPRAISALS [KPI = all
staff to be appraised at least once annually] KPA2 -SUCCESSION PLANNING [ KPI =8
POTENTAL staff to be identified and talent managed]
=================================== KRA4 - REWARD MANAGEMENT KPA1-
MARKET ORIENTED SALARY STRUCTURING [ KPI = total compensation to sales12%] KPA2
-BENEFITS PLANNING [ KPI =6% of total salary bill]
=== KRA5 - WORKPLACE MANAGEMENT AND RELATIONS KPA1 -JOB EVALUATIONS [ KPI
=600 lower staff , below grade4 to be evaluated] KPA2 - EMPLOYEE COMMUNICATIONS [ KPI
=4 newsletter on intranet, one per quarter ]
=========================================== KRA6 - SAFETY AND HEALTH
WORKPLACE KPA1 - SAFETY [ KPI = accident safety ratings, benchmark with industry] KPA2 -
HEALTH [KPI = actual health expenditure vs budget ]
======================================== KRA7 - BUILDING CAPABILITIES AND
ORGANIZATION LEARNING KPA1 - TRAINING [ KPI = average training hours per employee
annually=24 hours] KPA2 - MANAGEMENT DEVELOPMENT [ KPI =average MD cost per
employee annually=16000 RS] ============================================ KRA8
- EFFECTIVE HR MANAGEMENT SYSTEMS , SUPPORT AND MONITORING KPA1- HRIS
[ KPI = finalize the software . RS1.2 million capital budget] HERE ARE SOME COMMON
EXAMPLES FOR EACH ELEMENT, YOU CAN SET YOUR OWN THRESHHOLD, BASED ON
YOUR COMPANY STRATEGY/ HR STRATEGY.
================================================== ===1.ABSENTEEISM PER
EMPLOYEES [DAYS]2.AVERAGE RECRUITMENT TIME [DAYS]3.EMPLOYEE TURNOVER
[ % ]4.EMPLOYEE SATISFACTION [ LEVELS ]5.AVERAGE EMPLOYEE TENURE
[ YEARS]6.INDUCTION TRAINING [ % OF NEW EMPLOYEES]7. TRAINING WORKSHOP
[ % ] CONDUCTED/PLANNED8. TRAINING AT EXTERNAL COURSES [ %] ACTUAL /
PLANNED9.PERFORMANCE APPRAISALS [ NOS.] AGAINST TOTAL EMPLOYEES.
KRA: Key Result AreasKPA: Key Performance AreasKPI: Key Performance IndicatorsProcess:1. Review
the job profile2. Define the FUNCTIONAL role of the individuals3. Allocate KRAs, in consultation with
THE BOSS.4. Then the KPAs5. Then the KPINote:The levels are important but also the functional role
as well the companyobjectives/ strategy in deciding - KRAs / KPAs / KPI.
Fringe Benefit Tax (Full Details)
KEY RESULT AREAS (KRA)As the first step to build KRAs, KRAs are also known as key work outputs
(KWOs).KRA IS GUIDED / LINKED BY THE1. YOU must visit your company'sVISION
STATEMENTMISSION STATEMENTCORPORATE OBJECTIVESCORPORATE STRATEGYCORPORATE
BUSINESS UNITS/ DEPARTMENTAL PLANS/STRATEGY.***And could change year by year as per the
board directives.2. THEN REVIEW YOUR HR DEPARTMENT'SHR OBJECTIVESHR STRATEGIESALIGN
IT WITH CORPORATE OBJECTIVES/ STRATEGIES3. KRA refers to general areas of outcomes or outputs
for which a role isresponsible.A typical role targets three to five KRA
Key Result Areas
“Key Result Areas” or KRAs refer to general areas of outcomes or outputs for which the department's role is
responsible. A typical role targets three to five KRA.
Key Performance Areas
These are the areas within the HR DEPARTMENT, where an individual or group, is logically responsible /
accountable for the results.
To manage each KRA/ KPAs, a set of KPI are set .
HERE IS AN EXAMPLE, WHICH YOU CAN USE TO DEVELOP OTHERS FOR YOUR ORGANIZATION.
CORPORATE OBJECTIVE / STRATEGY
-improve the company competitive positioning and productivity by 10%.
HR DEPARTMENT'S OBJECTIVE
-Achieve high productivity level in all activities [ say by 10%]
KRA 1
-RECRUITMENT/ SELECTION
KPA --RECRUITMENT
KPI ----reduce average time taken to fill vacancies by 15%
KPI ----reduce average cost per recruit by 10%
KRA 2
-WORKPLACE MANAGEMENT
KPA -labour turnover
KPI ---reduce the labor turnover by 20%
KPI ----benchmark total HR COSTS externally.
KRA 3
-SAFETY AND HEALTH WORKPLACE
KPA ---workplace accidents
KPI ----reduce workplace accidents by 10%
KRA 4
-BUILDING CAPABILITIES AND ORGANIZATION LEARNING
KPA ----TRAINING
KPI --- ALL WORKFORCE below middle management should receive a minimum of 4 days of training.
THIS IS , ROUGHLY, HOW HR DEPARTMENTS KRAs / KPAs / KPIs ARE SET , MONITORED AND EVALUATED.
THIS CAN BE APPLIED TO ALL OTHER FUNCTIONAL DEPARTMENTS LIKE MARKETING / SALES /
PRODUCTION ETC
