Understanding KPIs vs. KRAs: How Do You Define Them for Your Team?

Dear Seniors,

Kindly help me in framing KPIs and KRAs. Please clarify the actual difference between the two. KRAs are key result areas, and KPIs are key performance indicators. How should they be framed for employees and the organization?

Looking forward to your support!

Dear Sanjogita, The subject comes up for discussion time and again. You could have checked this forum before raising the query.

Key Performance Indicators (KPIs) and Key Result Areas (KRAs)

KPIs and KRAs are part of the Performance Management System (PMS). Instituting PMS takes time, and stabilizing it further can take anything between two and five years. To institute PMS, it requires great exposure across the spectrum of industries. If mishandled, it may do more harm than good.

To know more about instituting PMS in the company, you can click here to refer to my past post: https://www.citehr.com/490150-job-de...ml#post2140544.

There is a lot of misconception about the concepts of KPI and KRA. To remove this misconception, I have uploaded my presentation on YouTube. You can click here to refer to that video: https://www.youtube.com/watch?v=NMEjMQzYVSs.

Recently, I replied to the post titled "Subjectivity in Performance Appraisal." You can click on the link to refer to it here: https://www.citehr.com/492135-subjec...ml#post2145274.

I handle consulting on PMS. To know more about my services, you can click here: https://docs.google.com/presentation...t#slide=id.p30. Talk to your management, and if they are ready, then we may work together. If you hire my services, I will conduct a deep study of each department and design new measures which you had never thought of.

Thanks,

Dinesh Divekar

KRAs and KPIs of individuals should be linked with the corporate objectives of any company. Corporate objectives should be divided into departmental objectives, which should then frame departmental KRAs that, down the line, should be divided into individual KRAs.

KRA - Key Result/Responsibility Areas

It describes the responsibilities one will handle during the tenure with the company. Let's say your KRAs are:
• Conducting Campus Interviews
• Imparting training to the employees
• ...etc.

KPI - Key Performance Indicator

It's a measurable value that shows how effectively one is fulfilling their assigned KRAs. For effectiveness, a performance standard/target is set in KPI. Let's describe KPIs for the above-mentioned KRAs:
• 1 campus interview per month
• 2 training sessions should be imparted every month
• ...etc.

So, to frame KRAs and KPIs linked with them, one needs to understand your corporate/departmental objectives, and only then will you be able to do so.

Hope this will be helpful for you.