Dear Mani,
KRA stands for Key Result Area while KPI stands for Key Performance Indicator
KRA: Any reference to KRA has to be understood from the point of view of the difference between 'Deliverables' and 'Doables'. While the former stand for the main results expected out of a role, the latter stand for the key tasks / activities that the role comprises of. While some of these tasks / activities are instrumental to realize the expected deliverables (the key results) from the role, not all of them are crticial or core. Some of them may be peripheral. For example, an HR Generalist's KRAs could include employee engagement, training & development and performance management. These would then, constitute the key areas where the role holder's performance will have a significant impact on the success or failure of the role to contribute to the overall business sucess of the company.
KRAs and KPIs need to be connected. For example, in any performance appraisal evaluation / management system, one would typically have a section describing or listing KRAs, the performance goal / target which is to be achieved and the KPI.
For example, lets say the KRA is hiring. The KPI or the metric by which the individual's performance will be evaluated could be '% of Exceptions'. With this KRA and KPI framework (please note that this is only illustrative for clarification purposes), the performance goal could be quantified or laid down as: Not more than 15% in the fiscal year. What does this mean? This means that if the recruiter makes 100 offers in the fiscal year, not more than 15 out of these 100 offers should be deviating from the salary range budgeted for these positions. If the recruiter is below the 15% mark at the end of the fiscal year, his / her performance could be rated as 'Meets Expectations'. If there are no exceptions, it could be rated as 'Consistently Exceeds Expectations'. On the other hand, if the number of exceptions are more than 15%, his / her performance could be rated as 'Inconsistently Meets Expectations' or ' Below Expectations' depending on whether the organization is using a '5' or '3' point rating scale.
I hope I have been of some help in clarifying these concepts which I find, to my concern, fuzzy concepts for most HR managers despite their seniority / position - things that they do refer to from a point of view of sounding knowledgable but of which, they have only a superficial knowledge.
I would recommend anyone who is interested in learning more about KPIs to read Parmenter's book entitled 'Key Performance Indicators' - you can do a Google search for the exact title.
Thanks,
Snoopypryer.
KRA stands for Key Result Area while KPI stands for Key Performance Indicator
KRA: Any reference to KRA has to be understood from the point of view of the difference between 'Deliverables' and 'Doables'. While the former stand for the main results expected out of a role, the latter stand for the key tasks / activities that the role comprises of. While some of these tasks / activities are instrumental to realize the expected deliverables (the key results) from the role, not all of them are crticial or core. Some of them may be peripheral. For example, an HR Generalist's KRAs could include employee engagement, training & development and performance management. These would then, constitute the key areas where the role holder's performance will have a significant impact on the success or failure of the role to contribute to the overall business sucess of the company.
KRAs and KPIs need to be connected. For example, in any performance appraisal evaluation / management system, one would typically have a section describing or listing KRAs, the performance goal / target which is to be achieved and the KPI.
For example, lets say the KRA is hiring. The KPI or the metric by which the individual's performance will be evaluated could be '% of Exceptions'. With this KRA and KPI framework (please note that this is only illustrative for clarification purposes), the performance goal could be quantified or laid down as: Not more than 15% in the fiscal year. What does this mean? This means that if the recruiter makes 100 offers in the fiscal year, not more than 15 out of these 100 offers should be deviating from the salary range budgeted for these positions. If the recruiter is below the 15% mark at the end of the fiscal year, his / her performance could be rated as 'Meets Expectations'. If there are no exceptions, it could be rated as 'Consistently Exceeds Expectations'. On the other hand, if the number of exceptions are more than 15%, his / her performance could be rated as 'Inconsistently Meets Expectations' or ' Below Expectations' depending on whether the organization is using a '5' or '3' point rating scale.
I hope I have been of some help in clarifying these concepts which I find, to my concern, fuzzy concepts for most HR managers despite their seniority / position - things that they do refer to from a point of view of sounding knowledgable but of which, they have only a superficial knowledge.
I would recommend anyone who is interested in learning more about KPIs to read Parmenter's book entitled 'Key Performance Indicators' - you can do a Google search for the exact title.
Thanks,
Snoopypryer.