Leolingham2000
Management Consultant
Hiren50
Portfolio Management
Mrs Fatch
Internal Auditor
Ramram1998
Manager - Hr
+1 Other

Please assist want to know the differences (if any) between goals and key result areas
18th December 2006 From Zimbabwe
Hi Fatch
Goals are set for the purpose of achieving the Key Results, after identifying the possible Key Result Areas.
It is the responsibility of the HR to identify the Key Result Areas and align organisational goals with the same so that individual performance goals are arrived at
Ask for any help to take this further...
Ram Ram
HR Trainer
22nd December 2006 From India, Madras
MRS. FATCH,

I have listed below

-what is a goal in an organization / how it is set.

-what is an objective in an organization/ how it is set

and how it is derived from the goal.

-what are KRAs/KPAs/KPIs in an organization/ how it is set

and how it is derived from the goal/ OBJECTIVES.

================================================

GOAL

-for an organization, is a desired state of affairs based on

the current situation and the forecasted conditions/ assumptions.

EXAMPLE-- BE THE NUMBER ONE COMPANY IN TERMS OF

MARKET SHARE IN THE INDUSTRY.

COCA COLA wants to be number one cola company in the

world.

-----------------------------------------------------------------------------------

OBJECTIVE

-for an organization, is the most desired outcome based on

the current situation and the forecasted conditions / assumptions.

EXAMPLE-- BE THE NUMBER ONE COMPANY, with 51% , IN TERMS OF

MARKET SHARE IN THE INDUSTRY.

COCA COLA wants to be number one cola company in the

world, with 51%.

------------------------------------------------------------------------------------------------------

WHAT ARE

''KRA'' AND ''KPA'' AND ''KPI''

Key Result Areas

“Key Result Areas” or KRAs refer to general areas of outcomes or outputs for which the department's role is responsible.

----------------------------------------------------------------

Value of KRAs.

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

------------------------------------------------------------------

Description of KRAs

Key result areas (KRAs) capture about 80% of the department's work role. The remainder of the role is usually devoted to areas of shared responsibility (e.g., helping team members, participating in activities for the good of the organisation).

================================================== ================

KRAs [ KEY RESULT AREAS are managed by

-KPAs [ KEY PERFORMANCE AREAS]

AND -KPIs [KEY PERFORMANCE INDICATORS]

KEY PERFORMANCE AREAS

To manage each KRA/ KPAs, a set of KPI are set .

KRA and hence KPI is attributed to the department which

can have effect on the business results and is

self measured where applicable.

THE IMPORTANCE AND WEIGHTAGE OF THESE ELEMENTS

KRAs/KPAs/ KPIs 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.

================================================== ====

Now I will use HR department / MARKETING department / SALES department

as a case study for our purpose.

================================================== =

One of the CORE KRAs of HR DEPARTMENT IS

-RECRUITMENT/ SELECTION

HERE IS AN EXAMPLE OF KRAs, KPAs 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%]

KRA 1

-RECRUITMENT/ SELECTION

KPA 1 --RECRUITMENT

KPI ----reduce average time taken to fill marketing/sales vacancies by 15%

KPI ----reduce average cost per recruit by 10%

===========================================

One of the CORE KRAs MARKETING DEPARTMENT IS

-DISTRIBUTION

HERE IS AN EXAMPLE OF KRAs, KPAs and KPIs FOR DISTRIBUTION.,

CORPORATE OBJECTIVE / STRATEGY

-to gain world market share of 51%

DISTRIBUTION OBJECTIVE

-Improve / Increase the distribution coverage by 20%

KRA 1

-DISTRIBUTION

KPA 1 --CHANNEL EXPANSION BY 2 NEW CHANNELS.

KPI ----INCREASE THE CHANNEL NETWORK BY 20%

==================================================

One of the CORE KRAs of SALES DEPARTMENT IS

-SALES COVERAGE

HERE IS AN EXAMPLE OF KRAs, KPAs and KPIs FOR SALES DEPT.,

CORPORATE OBJECTIVE / STRATEGY

-to gain world market share of 51%

SALES DEPARTMENT'S OBJECTIVE

-INCREASE THE SALES COVERAGE BY 20%.

KRA 1

-SALES COVERAGE

KPA 1 --SALES COVERAGE

KPI ----INCLUDE 5 MORE COUNTRIES IN THE SALES EXPANSION.

KPI ----INCREASE THE GEOGRAPHICAL COVERAGE BY 15%.

================================================== ====



regards

LEO LINGHAM
23rd December 2006 From India, Mumbai
That is a very nice example, Leo. I want to know more about KRA and KPI of only HR department. Can you please give a link to any post that you may be aware of.
11th June 2007 From India, New Delhi
HIREN,

I HAVE COLLECTED INFORMATION FROM MY FILES.

SOME OF THESE INFORMATION IS ALREADY ON CITEHR.

Key Result Areas [ KRAs ]

=======================================

KEY PERFORMANCE AREAS

These are the areas within the business , where an

individual or group, is logically responsible / accountable

for the results.

KRAs [ KEY RESULT AREAS are managed by

-KPAs [ KEY PERFORMANCE AREAS]

-KPIs [KEY PERFORMANCE INDICATORS]

To manage each KRA, KPIs are set .

KRA and hence KPI is attributed to the person who

can have effect on the business results and is

self measured where applicable.

=================================================

Key Result Areas [ KRAs ]

“Key Result Areas” or KRAs refer to general areas of outcomes or outputs for which a role is responsible. A typical role targets three to five KRAs.

Value of KRAs

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

Description

Key result areas (KRAs) capture about 80% of a work role. The remainder of the role is usually devoted to areas of shared responsibility (e.g., helping team members, participating in activities for the good of the organisation).

================================================== ===========

I am going to use HR DEPARTMENT as an example.

CORE KRAs for HR

-RECRUITMENT/ SELECTION

-WORKFORCE PLANNING/ DIVERSITY

-PERFORMANCE MANAGEMENTA

-REWARD MANAGEMENT

-WORKPLACE MANAGEMENT AND RELATIONS

-SAFETY AND HEALTH WORKPLACE

-BUILDING CAPABILITIES AND ORGANIZATION LEARNING

-EFFECTIVE HR MANAGEMENT SYSTEMS , SUPPORT AND MONITORING

THE IMPORTANCE AND WEIGHTAGE OF THESE ELEMENTS IS

-GUIDED BY THE

*VISION STATEMENT

*MISSION STATEMENT

*CORPORATE OBJECTIVES

*CORPORATE STRATEGY

*CORPORATE BUSINESS UNITS/ DEPARTMENTAL PLANS/STRATEGY.

AND COULD CHANGE YEAR BY YEAR AS PER THE BOARD DIRECTIVES.

THIS WOULD BE REFLECTED IN THE

-KPAs --KEY PERFORMANCE AREAS

-KPIs -- KEY PERFORMANCE INDICATORS

===============================================

KRAs, KPAs and KPI [shown in brackets ] for HR.

KRA 1 -RECRUITMENT/ SELECTION

KPA 1- RECRUITMENT [KPI= average time taken per employee 2 months]

KPA 2 -SELECTION [ KPI = average cost per new employee RS 10,000]

====================================

KRA 2 - WORKFORCE PLANNING/ DIVERSITY

KPA 1 - ANSENTEEISM [ KPI = absent rate at 5%]

KPA 2- TURNOVER [ KPI = turnover rate at 7%]

KPA 3- DIVERSITY [ KPI = 3 FEMALES TO BE INDUCTED INTO MANAGEMENT CADRE]

=====================================

KRA 3- PERFORMANCE MANAGEMENT

KPA 1 - PERFORMANCE APPRAISALS [KPI = all staff to be appraised at least once annually]

KPA 2 -SUCCESSION PLANNING [ KPI = 8 POTENTAL staff to be identified and talent managed]

===================================

KRA 4 - REWARD MANAGEMENT

KPA 1- MARKET ORIENTED SALARY STRUCTURING [ KPI = total compensation to sales 12%]

KPA 2 -BENEFITS PLANNING [ KPI = 6% of total salary bill]

============================================

KRA 5 - WORKPLACE MANAGEMENT AND RELATIONS

KPA 1 -JOB EVALUATIONS [ KPI = 600 lower staff , below grade 4 to be evaluated]

KPA 2 - EMPLOYEE COMMUNICATIONS [ KPI = 4 newsletter on intranet,one per quarter ]

===========================================

KRA 6 - SAFETY AND HEALTH WORKPLACE

KPA 1 - SAFETY [ KPI = accident safety ratings, benchmark with industry]

KPA 2 - HEALTH [KPI = actual health expenditure vs budget ]

========================================

KRA 7 - BUILDING CAPABILITIES AND ORGANIZATION LEARNING

KPA 1 - TRAINING [ KPI = average training hours per employee annually= 24 hours]

KPA 2 - MANAGEMENT DEVELOPMENT [ KPI =average MD cost per employee annually= 16000 RS]

============================================

KRA 8 - EFFECTIVE HR MANAGEMENT SYSTEMS , SUPPORT AND MONITORING

KPA 1- HRIS [ KPI = finalize the software . RS 1.2 million capital budget]

================================================== =====

THIS IS AN EXAMPLE FOR INDIVIDUALS.

AGAIN I AM USING HR DEPARTMENT.

FOR INDIVIDUALS WITH HR DEPARTMENT,

-you should take the job description of the individual

-determine the KRAs for the year

-identify the KPAs for the year [ which could change yearly]

-determine the KPI for each KPA, which depends on the company annual

objectives.

HERE IS THE EXAMPLE for a recruitment officer

KRA 1

-RECRUITMENT/ SELECTION

KPA 1 --RECRUITMENT

KPI ----reduce average time taken to fill vacancies by 15%

KPI ----reduce average cost per recruit by 10%

================================================

HR Key Performance Indicators

Frequently used HR Key Performance Indicators include:

FTE = full time employees [only]

Revenue per Employee (FTE)

Assets per FTE

Training Hours per FTE

Training Costs per FTE

HR Department Cost per FTE

FTEs per HR Department FTE

Acceptance Rate

Average Cost per Hire

Absence Rate

Turnover Rate

Resignation Rate

Human Investment Ratio

Compensation & Benefits/Revenue

Average Remuneration

Time taken per recruitment

Cost per recruitment

==================================

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/PLANNED

8. TRAINING AT EXTERNAL COURSES [ %] ACTUAL / PLANNED

9.PERFORMANCE APPRAISALS [ NOS.] AGAINST TOTAL EMPLOYEES.

================================================== ===

HERE ARE SOME

PROBABLE HR METRICS IN COMPENSATION ONLY

1.ANNUAL TOTAL COMPENSATION INCREASE RATE [%] [this year vs last year]

2.ANNUAL TURNOVER RATE.[this year v s last year]

3.COMPENSATION &BENEFITS AS A % OF SALES.

4.COMPENSATION & BENEFITS AS A % OF OPERATING EXPENSES.

5.COMPENSATION & BENEFITS PER EMPLOYEE [ this year vs last year]

6.COMPENSATION & BENEFITS COMPETITIVENESS INDEX.

7.INCENTIVE PAYMENT AS A % OF TOTAL COMPENSATION & BENEFITS.

8.BENEFITS SPEND AS A % OF TOTAL COMPENSATION & BENEFITS

9.COMPENSATION & BENEFITS BY LEVELS OF STAFF

-senior mgnt/ executives/middle mgnt/ junior mgnt/supervisors/staff etc.

10.NEW COMERS COMPENSATION & BENEFITS AGAINST TOTAL FOR THE YEAR.

11.% OF EMPLOYEES SATISFIED WITH CURRENT SYSTEM [ SURVEY ]

12.MEDICAL BENEFITS EXPENSES TOTAL [ THIS YEAR VS LAST YEAR]

13.MEDICAL BENEFITS EXPENSES PER EMPLOYEE.

================================================== =====

HERE ARE SOME STANDARDS METRICS



1 HR UTILIZATION % TOTAL PAYROLL $ / TOTAL SALES $



2. HR PRODUCTIVITY % TOTAL EMPLOYMENT COST $/TOTAL

PRODUCTION VOLUME IN $ X 100



3. HR BUDGET % ACTUAL $ / BUDGET $ X 100



4'. ACCIDENT COSTS % CURRENT ACTUAL $ / LAST YEAR $ X 100



5'. ACCIDENT SAFETY % CURRENT ACTUAL $ / LAST YEAR $ X 100

RATINGS



6'. EMPLOYEE % EMPLOYEE BENEFITS $ / TOTAL PAYROLL $ X100

BENEFITS



EMPLOYEE BENEFITS $ /TOTAL SALES $ X 100





7'. HR BUDGET % ACTUAL HR EXPENSES $ / TOTAL SALES $ X 100

sales effectiveness



8'. HR EXPENSES $ TOTAL HR EXPENSES $ / TOTAL NO. OF EMPLOYEES

per head



9'. HR EXPENSES % HR EXPENSES $ / TOTAL EXPENSES $ X 100

cost effectivenss



10'. NO.OF COURSES % ACTUAL CONDUCTED / PLANNED X 100

CONDUCTED



11. NO. OF SAFETY % ACTUAL CONDUCTED / PLANNED X 100

training programs



12. TRAINING DAYS % ACTUAL TRAINING DAYS / PLANNED X 100

EFFECTIVENESS



13. EMPLOYEES % ACTUAL TAKING PART / PLANNED X 100

involvement in train



14. SICK DAYS nos. TOTAL SICKDAYS TAKEN/ TOTAL EMPLOYEES

managemeent effectiveness



15. STAFF orientation % NO. OF NEW STAFF LEAVING IN THREE MONTHS/

EFFECTIVENESS TOTAL NO. OF NEW STAFF ORIENTED

X 100





16. TIME TO FILL AN NO.DAYS TOTAL NO OF DAYS / TOTAL NO positions filled

OPEN POSITION





17. TURNOVER BY % TURNOVER / TOTAL RECRUITMENTS X100

RECRUITING source

BY EACH SOURCE





18. TURNOVER BY % TURNOVER / TOTAL EMPLOYEES BY EACH

EACH JOB CATEGORY

CATEGORY X 100





19. WORKERS % ACTUAL $ / PLANNED BUDGET $ X 100

çompensation costs





20. HR STAFFING NO. TOTAL HR STAFF / TOTAL EMPLOYEES

EFFICIENCY



REGARDS

LEO LINGHAM
12th June 2007 From India, Mumbai
Thanks a million, Leo. You have given both the macro and micro picture very well. It will take some time to digest but from first impression it seems that Training and Development is missing. Is "Building capabilities and Organization learning" a substitute for Training and Development?
Thanks and Regards
Hiren
12th June 2007 From India, New Delhi
HIREN, "Building capabilities and Organization learning INCLUDES -TRAINING -DEVELOPMENT -KNOWLEDGE MANAGEMENT ETC REGARDS LEO LINGHAM
12th June 2007 From India, Mumbai
Gone through the discussions given above . interesting I still have a few questions but. can anybody clarify ?
-what is the sequence KPA , KRA Goal . what are the steps involved . where do you start from
- which one of the above terms should be SMART.
-KPI - is performance indicator of which of the above term
-which of the above terms you need to measure & therefore identify measures .
if HR function can be broadly divided into following three sub-functions - talent acquisition ,talent management , talent development , an each sub function can be further divided into multiple sub function , how take one of the sub function , let us talent Acquisition & put in the sequence.
27th February 2015 From India, Delhi
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