Who Should Set Employee KRAs: Is It the HOD, HR, or the Employee Themselves?

Dear Sir,

In general, who will prepare KRA for the employee in the company? I wanted to know whether the HOD sets KRA for the team or if HR prepares it for the team. Alternatively, does an individual have to prepare it themselves?

Kindly answer.

Regards,
Madhu Sudan

Dear Mr. Sudan,

The Key Result Area (KRA) is prepared by the Head of Department (HOD) and individuals (Department-wise) through mutual discussion and agreement with the assistance of HR. In this regard, HR plays a major role in setting targets, establishing measurement criteria, and assessing achievements from the previous period (last year). It is the responsibility of HR to effectively manage the KRA system within the company.

Regards,
Ram

Dear Madhu Sudan,

The Head of Department (HOD) should prepare Key Result Areas (KRAs) for his/her staff. General Managers (GMs) or Vice Presidents (VPs) should prepare KRAs for the HODs. Directors or Managing Directors (MDs) should prepare KRAs for GMs and those at higher levels. Individuals can also initiate some of the KRAs.

Dinesh V Divekar

In our company, I prepared the KRA based on interactions with the immediate superior/HOD, my observations about the individual's work, and then had it authenticated by the respective Director heading the particular function. Do you have any suggestions for alternative methods?

Regards,

Esha
Sr. Executive HR
Sanspareils Greenlands

As we all know, KRA stands for Key Result Area.

Actually, in the true sense, KRA is a concept that is usually very difficult to implement. Let me try to explain how it works.

First, the Board of Directors (BOD) decides upon the objectives of the company and sets a period-specific target. This target becomes the KRA of the CEO, which then gets divided until it reaches the bottom-most rung.

The KRA of each person is linked, and the fulfillment of KRA will lead to the fulfillment of the objective set by the BOD. Hence, if one person fails, it will hamper the attainment of the desired result.

Let me give you an example:

The company sells PCs. Suppose the objective decided by the Board is to make a profit of 500 crores in 3 years. The KRA of the CEO is to attain a 500 crore profit in 3 years. The CEO decides to achieve this by making 400 crores by selling PCs, 50 crores by investing in stocks, and 50 crores by improving the production cycle.

Now, the KRA of the Chief Marketing Officer will be to sell PCs that will generate a 400 crore profit for the company in 3 years. He will then set the KRAs for his subordinates in such a way that this target is achieved.

The Chief Operating Officer has a KRA of improving the productivity cycle and producing PCs by which 400 crores can be achieved.

The Chief Finance Officer will have the KRA of looking after investing in stocks and providing finance for the purchase of raw materials, machinery, and others so that both Operations and Marketing can achieve their KRAs.

Chief People Officer (HR) [Generally, KRAs are difficult or not done for HR since they are essentially a support function, but in some cases, it is done]

The CPO, as his KRA, will have the following responsibilities: provide manpower and maintain harmonious industrial relationships so that there is no disruption in production or marketing. Provide training to improve skills to achieve a better productivity cycle, and frame a compensation benefit structure by which efficient employees can be retained.

The Chiefs then further divide the KRAs to their subordinates. For example, the KRA of the Manager (Training) under CPO will be to provide adequate training to the workforce. Therefore, if the Manager (Training) fails, that failure will be reflected in the KRAs of both CPO and COO and CEO. Similarly, if the KRA of the Assistant Manager (Training) is to find training institutes that can provide quality training and he is unable to achieve it, this will reflect in the KRAs of Manager (Training), CPO, COO, and CEO.

Suppose the Deputy Manager (Training) is supposed to conduct training programs, which could not be carried out because the funds for training, which were supposed to be arranged by the Deputy Manager (Finance), could not be arranged. Now, you can see this failure will reflect in the KRAs of the Deputy Manager (Finance), Manager (Finance), CFO, Deputy Manager (Training), Manager (Training), and CPO, COO, and CEO.

Key Result Areas - The measure of employees' main positive results. I hope you can understand the motive behind this explanation.

Dear Madhu,

Setting Key Result Areas (KRAs) is always the responsibility of the line manager because he/she is the individual who understands their requirements and the expected outcomes. HR can assist in clarifying the process, but defining KRAs is primarily the role of the line manager.

For any assistance, feel free to call.

Regards,
Amit
HR
SYSNET GLOBAL TECH
9311742899

Dear Madhu,

Generally, from the JD, KRAs are derived. Basically, the HR, the individual employee, and the HOD will sit together. The HR will discuss the KRA with the HOD, and accordingly, weightages are given as per the priority of the work.

Regards,
Shefali Executive-HR Sah Petroleums Ltd

Re: Who Will Prepare KRA (HOD or Manager or HR or an individual)

It is the responsibility of the HR Head, and he is the only person to make decisions. However, in the absence of a senior person, an executive HR can also prepare KRA with our M.D. or another senior person who handles all HR issues.

Madan Mohan Verma
HR Executive
Acreative Management Consultant Pvt. Ltd.

Dear Madhu,

It is the responsibility of HR and the HOD of the department to set the KRAs for their employees.

Regards,
Pkm

Dear HR Department,

I collaborate with the HR personnel to establish Key Result Areas (KRAs) and set targets for completion.

During quarterly, half-yearly, or annual appraisals, it is essential for both the Head of Department (HOD) and HR to evaluate the performance of the appraisee.

Regards,
K Sudhir
Volta Fashions Private Limited
Visakhapatnam