Thread Started by #M.Peer Mohamed Sardhar

The success of an organization will depends on its ability to measure accurately the performance of their employees and use it persuasively to develop them as valuable resources.

The Performance Evaluation & Development process aims at being more than a mere tool to evaluate performance and focuses on professional performance development.

OBJECTIVE

· To identify the most important aspects of the job and base performance measures on the same.

· To evaluate employees on their performance during the appraisal period.

· To facilitate employees in planning and management of their own work, leading to enhanced performance.

· To facilitate career planning by determining appraisee’s potential for taking on diverse roles and responsibilities.

· To provide training focused on specific developmental needs.



The Performance Evaluation & Development process has been designed to allow a holistic view on the employee’s performance. It consists of the following categories

1] Key Result Areas (KRAs)

Key Result Areas are critical functions of a job or a role, which makes its distinct contribution to the achievement of the company’s goals. KRAs require tasks to be performed by an employee in relation to his job. They are critical areas of performance assessment and should be mutually agreed upon and listed at the beginning of each appraisal period. Each KRA can be further broken down into specific tasks.

The KRAs have to be:

a. SMART I.e. S- specific, M- measurable, A- agreed, R- realistic, T- time bound.

E.g. 1. “To achieve a sales turnover of Rs.5 lakhs”.

E.g. 2. “To conduct Induction Training for all new recruits twice a month”.

b. There should be a minimum of 5 KRAs assigned to a person.



KRA = KEY RESULT AREA,

KPA = KEY PERFORMANCE AREA.

IT IS NOT OFTEN POSSIBLE TO EVALUATE KRA, AND HENCE IT IS SPLIT INTO KPA’s.

KPA’s are more focused and easy to monitor/evaluate with 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. A typical role targets three to five KRA.

Value of KRAs.

Identifying KRAs helps individuals:

· Clarify their roles

· Align their roles to the organization’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 organization).



CORE KRAs of HR DEPARTMENT

-RECRUITMENT/ SELECTION

-WORKFORCE PLANNING/

-DIVERSITY MANAGEMENT

-PERFORMANCE MANAGEMENT

-REWARD MANAGEMENT

-WORKPLACE MANAGEMENT

-INDUSTRIAL RELATIONS

-SAFETY AND HEALTH WORKPLACE

-BUILDING CAPABILITIES AND ORGANIZATION LEARNING

-EFFECTIVE HR MANAGEMENT SYSTEMS , SUPPORT AND MONITORING



KRAs [ KEY RESULT AREAS are managed by -KPA’s [ KEY PERFORMANCE AREAS] -KPI’s [KEY PERFORMANCE INDICATORS]



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/ KPA’s, 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/KPA’s/ KPI’s ARE GUIDED BY THE

*VISION STATEMENT

*MISSION STATEMENT

*CORPORATE OBJECTIVES

*CORPORATE STRATEGY

*CORPORATE BUSINESS UNITS/ DEPARTMENTAL PLANS/STRATEGY, FOR THE BUDGET PERIOD, WHICH IS USUALLY 12 MONTHS.



MANAGER LEARNING AND DEVELOPMENT

KRAs and KPI’s.

KRA 1-deliver relevant and targeted programs to the organization employees.

KPI 1--EMPLOYEE SATISFACTION FEEDBACK THROUGH SURVEY SATISFACTION LEVEL MINIMUM 70%.

KPI 2--% INCREASE IN TRAINING PROGRAMS

KPI 3--% INCREASE IN EMPLOYEE PARTICIPATION.

KRA 2-promote the programs/learning culture

KPI 1--EMPLOYEE SATISFACTION FEEDBACK THROUGH SURVEY. SATISFACTION LEVEL MINIMUM 70%.

KPI 2--NUMBER OF DEPARTMENTS SATISFACTION LEVEL.

KPI 3--% INCREASE IN TYPES OF ACTIVITIES

KRA 3-provide lead in the provision of organization learning and development service

KPI 1--NO. OF TRAINING DAYS % INCREASE

KPI 2--NO. OF EMPLOYEES PARTICIPATING % INCREASE

KPI 3--NO. OF INHOUSE PROGRAMS % INCREASE

KPI 4--NO. OF EXTERNAL PROGRAMS ATTENDED %INCREASE.

KPI 5--NO. OF EXTERNAL TRAINING PACKAGES BOUGHT %INCREASE.

KPI 6--% INCREASE IN COST.

KPI 7--% INCREASE IN RESOURCE REQUIREMENTS.

KRA 4-improvements in capabilities/capacities to deliver L&D.

KPI 1--PROGRAMS IMPLEMENTED ON TIME [ % ]

KPI 2--PROGRAMS IMPLEMENTED WITHIN BUDGET [ %]

KPI 3--EFFECTIVE USE OF PERFORMANCE MANAGEMENT SYSTEM FOR DEVELOPMENT [ % ]

HR MANAGER KEY RESULT AREAS.

KRA 1 Recruitment / Selection

KRA 2 Workforce Planning and Diversity

KRA 3 Performance Management

KRA 4 Reward Management

KRA 5 Workplace Management and Relations

KRA 6 A Safe and Healthy Workplace

KRA 7 Building Capabilities and Organizational Learning

KRA 8 Effective HR Management Systems, Support and Monitoring



For the management trainer, key result areas could be:

Design of solutions

Delivery of solutions

Evaluation of solutions

Budgets

Client satisfaction

Innovation

General Management or Senior Executive KRAs include

Internal operations

Market development

Profitability

Organizational structure

Organizational vision and mission

Asset and liability management

Board of directors relationship

Productivity

Financial strategy

Business development

Technology

Customer satisfaction

Community relations

Regulatory compliance



Finance and Accounting KRAs include



Credit referencing

Management information

Capital expenditure

Security

Financial analysis

Cost control

Internal audit

Regulatory reporting

Credit control

Financial records

Payroll

Cashflow forecasting

Budgeting

Costing



Sales KRAs include



New business acquisition

Territory management

Customer care

Lead generation

Lead follow up (internal and external)

Account management

Customer retention

Interpersonal skills

Negotiating skills

Product knowledge

Sales forecasting



Manufacturing KRAs include



Stock control

Maintenance

Labour relations

Waste

Reworks

Productivity

Health and Safety

Quality control

Record keeping



Marketing KRAs include



Advertising

Promotional strategy

Pricing

Market research

Field support

Marketing materials

Media relations

Sales support

Agency relations



Secretarial, Clerical and Administrative KRAs include



Correspondence

Filing

Records management

Administrative support

Internal customer relations

Equipment maintenance

Forms administration

Scheduling

Supply maintenance and purchasing

Telephone coverage

Project support

Finally, key result areas for everyone in an organization are:

Personal development

Professional development

Internal and external customer satisfaction

Public relations

Communication - oral and written

Interdepartmental relations

Project management



KPI FOR THE VARIOUS KRAs should be



-quantity oriented

-quality oriented

-time oriented

-cost oriented

or a combination .



Quantity

Number of units produced/published /sent/received/processed/deadlines

Calls per hour/day/week

New products introduced

Grievances per 100 employees

Staff turnover

Customer complaints and compliments

Error rate or reworks

Returned goods

Sales increased

Profit increased

Increase in market share



Cost



Variance against budget

Rs spent

Profit

Waste

Overtime incurred

Speed



Time



Reduction in number of minutes/hours/days etc.

Deadlines and schedules met

Average call response time

Projects completed per week/month etc.

Number of minutes between customers

Therefore: example

Key Result Area = Sales

Objective = Sell x new product to customers

KPI = Number of units sold per new customer whilst maintaining

gross profit level of 25%

SUPPLY CHAIN MANAGEMENT

DEMAND PLANNING



-demand planning for core products

-demand planning for parts/accessories

-demand planning for critical items

-developing product life cycle trends

-product life cycle forecast for new products etc

KPI could be

-remove stock shortages[ by %]

-improve inventory levels.[ 98% max] etc

PROCUREMANT



-quicker stock replenishment

-continual stock replenishment

-reduction in lead time

-remove stock shortages[ by %]

-improving stock availability [100%]

-reducing cost [ 5%]

-reduction working capital [ 7%]



SUPPLY



-better supply coordination

-more effective communication with supplier

-faster / timely communication etc

KPI could be

-developing supplier profile [ all accounts]

-developing suppliers networking [ all accounts] etc



RAW--INVENTORY

-quicker replenishment

-customer focused inventory building

-logistical lead time reduction

-demand based inventory etc



KPI could be

-better material availability[100%]

-good/ usable inventory levels [ 98% satisfaction]

etc



MANUFACTURING

-elimination of wastages in production

-improving throughput efficiency

-process efficiency etc



KPI could be

-reducing back orders[ nil %]

-improving targeted delivery date [ 98%] etc



FINISHED --INVENTORY

-reduction in logical lead time

-full stock availability etc

KPI could be

-full total inventory[ 100%]

-full stock / range availability [ full range]

etc



ORDER SERVICE

-short--response time to query

-shortening order cycle time etc

KPI could be

-making targeted delivery date [ 100%]

-providing order status [ at all times]

etc



DISTRIBUTION

-order fill rate

-on time delivery

-backorder by age

-service/ parts availability

-targeted delivery date

-order completeness

-delivery reliability



KPI could be

-improve order fill rate [ 98%]

-improve on-time delivery [ 98%]

-reduce shipment delays[ 0%]



CUSTOMER SERVICE

-order status

-delivery reliability

-documentation integrity etc

KPI could be

-timely order status [ 100%]

-timely delivery status.[ 100%] etc



THE SUPPLY CHAIN MANAGEMENT KPI’s could include

-IMPROVING MATERIAL FLOWS

-REDUCE RAW MATERIAL INVENTORY LEVELS

-REDUCING PURCHASING COST

-REDUCE FREIGHT COST

-REDUCE OBSOLETE STOCK LEVELS

-IMPROVING WAREHOUSING OPERATIONS EFFICIENCY

-OPTIMISE STOCK LEVELS

-REDUCE LEAD TIME

-REDUCE TOTAL INVENTORY LEVELS

-REDUCE FINISHED STOCKS

-IMPROVE DEMAND FORECASTING

-IMPROVE MATERIAL RESOURCE PLANNING

OTHER KPI’s could be as follows

MANUFACTURING



- Unit volume level

- unit cost target

-production efficiency improvement

-productivity improvement

-quality improvement index

-capacity utilization

MARKETING

-market share %

-new product launches success

-profit contribution by product lines



SALES

-sales against last year

-sales against target

-sales coverage improvement

-market coverage

-customer coverage

-channel coverage



CUSTOMER SERVICE

-CUSTOMER SERVICE IMPROVEMENT

-CUSTOMER SATISFACTION ACHIEVEMENT

WAREHOUSING / TRANSPORTATION

-%ACHIEVED AGAINST ORDERS

-PICKING / PACKING RATE

-FINISHED GOODS INVENTORY LEVEL

-STOCK TURNOVER

FINANCE



-Cost of Capital USED

- Receivables level / against sales

-Bad‑debt level

-Debt‑equity ratio

PROCUREMENT / SUPPLY

-raw material inventory levels

-cost saving target



Courtesy,,,

Kiran K Srinivas | Manager – HR

26th January 2008 From India, Coimbatore
Dear Mr. Sardhar,
From your previous post, I assumed you must be an expert in this area about KRA, KPA, & KPI.
But from your examples, you didnt give any KRA, KPA, & KPI special for Business Development Dept.
Meanwhile, that's exactly what I need...
And I've been browsing all over the web, but still I can not find any useful article.
So, I decided to write a msg to you and hope that you might have the answer for my confusion
Thank you, Mr. Sardhar.. And hope to hear from you, soon...
My sincerely,
Stefani from Indonesia
15th December 2008 From Indonesia, Jakarta
Hi I found that a Jenny asked same question in this forum 1 month ago. Please use search box at the top of site to find this question. Rgs
12th December 2009 From Vietnam, Hanoi
Can you please help me in writing KRA for Project manager - Pharmaceutical inductry engineering projects/ facilties. Rgs
13th February 2010 From India, Pune
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