Understanding KRA and KPI
KRA (Key Result Area) is a target for an individual employee, to be measured through KPI (Key Performance Indicator). The KRA and KPI are decided by the management when fixing the targeted KRAs, which is mutually agreed upon by the appraiser and appraisee. Each KRA has a corresponding KPI to measure it over a certain period and is to be periodically reviewed in line with the organization's policy and practices.
Types of KRAs and KPIs
The KRAs and KPIs can be categorized as either upward or downward. For example, an upward KRA could be an increase in sales volume, with the KPI set on either the total sales volume or the percentage increase over the previous year. Conversely, a downward KRA like a decrease in customer complaints could have the KPI based on either the decrease in the number of complaints or the percentage of customer complaints compared to the previous year.
Therefore, the KRAs and KPIs need to be established before the sign-off process.