Understanding KPIs and KRAs: How to Implement a Performance Management System in Your Industry

Dear members, very often queries are raised on the topics of KPIs, KRAs, PMS, etc. Through this thread, I have summarized my past replies.

Instituting Performance Management System (PMS)

Instituting a Performance Management System (PMS) is a far more serious business. I have given a reply to a similar post. Click the following link to refer to the reply: https://www.citehr.com/577456-formul...ml#post2228293

Though the heading is for IT companies, the above reply is applicable to all types of industries. In the above link, you will find several other links. Go through all the links patiently. It will improve your awareness of the subject.

Sample KPI and KRA Manual

Refer to this forum. It includes some of the KPIs applicable to the real estate industry as well.

Videos on PMS

To clarify on PMS, I have uploaded the following videos:

https://www.youtube.com/watch?v=fTe8Pu6yioo

https://www.youtube.com/watch?v=NMEjMQzYVSs&t=1s

For further doubts, feel free to contact me.

Thanks,

Dinesh Divekar

[Phone Number Removed For Privacy-Reasons]

P.S.

I provide consulting services to establish a comprehensive Performance Management System (PMS). While establishing the PMS, I develop KPIs to measure human resource utilization, machine utilization, etc. My activities surpass the usual measurements mentioned in the Balanced Score Card (BSc). If you wish to avail of my paid services, then feel free to approach me. Thanks.

Hi,

I am working on developing KPIs for different departments in a footwear (production) company. Your ideas and suggestions shall help me develop KPIs in this regard.

Thanks and best regards,
Chaudhry

How to design KRAs? What is the difference between Qualitative and Quantitative KRAs?

To design Key Result Areas (KRAs), it is essential to first establish clear and specific goals that align with the overall objectives of the organization. KRAs should be SMART – Specific, Measurable, Achievable, Relevant, and Time-bound. It is crucial to involve employees in the process of setting KRAs to ensure their buy-in and commitment to achieving these goals.

The main difference between Qualitative and Quantitative KRAs lies in the nature of the performance indicators used to measure success. Quantitative KRAs are measurable using numerical data, such as sales targets, production output, or customer satisfaction scores. On the other hand, Qualitative KRAs focus on subjective assessments, such as employee behaviors, teamwork, or communication skills.

When designing KRAs, organizations should strive to strike a balance between Qualitative and Quantitative indicators to provide a comprehensive evaluation of employee performance. This balanced approach helps in capturing both the tangible results achieved and the intangible qualities that contribute to overall success.

Hey HR Members,

I have started working in a prefabrication modular company. We have set up HR processes here, but I am unable to keep up with KRA & KPI for each department. I need KRA & KPI for each department in the construction industry on an urgent basis.

Thanks & Regards,
Pratibha

Hi Mr. Dinesh Divekar,

I am working with a diagnostic company (having manufacturing facility and R&D). Can you please help me create Key Risk Indicators (KRI) and Key Performance Indicators (KPI) for the following departments:

- Accounts
- Purchase
- Technical
- Secretary
- R&D
- Regulatory
- Production
- Service & Applications
- Management Information Systems (MIS)
- Marketing Coordinators

Thank you.

Hi Mr. Dinesh Divekar,

I am working with an office stationery and packaging manufacturing company. Could you please help me in creating KRAs for the following departments:

- Accounts
- Printing
- Lamination
- Packing
- Quality
- Logistics
- Production
- Warehouse
- Loading/Unloading
- Sales/Marketing
- Purchase
- Export/Import
- Design

Thanks & Regards,
Rakesh Pandey

Hi,

I kindly request you to share the KRA and KPI answers for the field of Tourism. I work for Thomas Cook India Limited, and my Human Resource department requires me to fill in my KRA. I need to provide responses for the following headers:

Financial
Customer
People Development
Process Innovation

I would appreciate your assistance as this is my first time completing the KRA.

Regards,
Aalap Kulkarni

Hi Rakesh & Kulakarni, how can anyone prepare KRA without having knowledge of the exact work being done by each individual? Please provide them, then we can prepare.

Hi,

Could someone please provide me with the performance appraisal parameters for an Infrastructure Company and guidance on how to develop a PMS?

Thanks & Regards,
MBTI
+91-7987874953

Dear Friends and Seniors,
I have some question related with KRA and KPI.
1. Are they interlinked?
2. Can we set one KPI without having one's KRA?
You are requested to provide some insight on this.
Regards,
Rahul Sindhwani

Understanding KRA and KPI

As far as my knowledge goes, KRA stands for Key Result Area, and KPI stands for Key Performance Indicator. Without a KRA being fixed at the beginning of the financial year, the KPI is decided based on the KRA.

For example, if you set a KRA of achieving 20% more profit, the KPI could be divided as 10% from 'new customers' and another 10% from 'existing customers'. Another example is a cost reduction of 20%, where the KRA is fixed at the beginning of the year. In this case, the performer's KPI could be split as 10% from the existing supplier and 10% from the new supplier.

Please let me know if you need any further clarification or assistance.

Dear Rahul,

I have uploaded two videos on YouTube. One is on the difference between KPI and KRA, and the other is on PMS. Click the following links to refer to those videos:

- [KPI and KRA video](https://www.youtube.com/watch?v=NMEjMQzYVSs&list=FL75AUWCDcAmcXd9r e1Wzb_g&t=0s&index=5)
- [PMS video](https://www.youtube.com/watch?v=fTe8Pu6yioo)

You may go through both videos to update yourself on these concepts.

Thanks,

Dinesh Divekar

Hey, guys,

I am a newbie on this site. I am working as a TL for the Training and Quality department in an International Chat Process. I need some help in creating KRA (Key Result Areas - performance measurements) for the roles of Trainer and Quality Analyst. It would be great if you guys could help me with some insights.

Hi,

I am working in a clothing company. My manager has asked me to prepare a KRA-based performance appraisal form for a retail merchandiser and a sales manager and instructed me to include KRA and KPI points for both positions. I have not worked in this field before. I have already prepared the appraisal form, but I am struggling with the KRA and KPI points.

I need help. Please advise me on the KRAs and KPIs that I can include for a Retail Merchandiser and Sales Manager.

Regards,
Richa

Hello Everyone,

I am working in a construction company as an HR Executive. The company has multiple site locations across India. My senior has asked me to prepare KPIs for site operation employees, but I have no idea about this. In my opinion, only a technical person like a site in charge or project head can undertake this practice.

Can HR set KPIs for employees involved in construction work? If yes, then how? What are the factors involved in it? Please suggest to me.

Please give me 2-3 examples of KRA and KPI to understand them better.

Go back to the start of this thread on page 1, and you will find some samples posted by one of our senior members, Dinesh Divekar. It is an Excel spreadsheet that does not appear to be opening; however, you can read it by opening it in Google Sheets instead.

Always check previous posts in a long thread. Your question is likely to have been answered previously. Also, most questions have been posted before, and there is a search function at the top of the page.

Hi, I need help with creating KRAs and KPIs for a furniture manufacturing company, specifically for the sales, production, operations departments, and an executive assistant. Can anyone provide pre-made templates for these departments? Your assistance would be greatly appreciated.

Dear Connections, I need your valuable advice on how to prepare KRA and KPI. I have prepared KRA, but I am not very sure about KPI. Please refer to the attached KRA sheet that I have prepared. If anybody has a format, please share and advise further.

Regards,
Shilpi

Dear HR Fraternity,

I am Rahul Sharma, working in a construction company. We need to define KRAs for our employees working in the Finance, Purchase, and Construction (Site Engineer/Site Supervisor) divisions.

Suggestions for Defining KRAs
Can you please suggest what parameters to define KRAs or if there are any predefined KRAs implemented in your organization?

Suggestions are highly appreciated.

Regards,
Rahul Sharma

Hi, I have consolidated ratings from four quarters (Q1/Q2/Q3/Q4) for each employee in the organization. How do I use that data for appraisals in the financial year?

Dear Vaishali Dubey, You have a consolidated rating of each employee for the four quarters, but for what? Is it the work rendered by them?

Performance Slabs
You need to create the performance slabs. The sample slabs are as below:

1. Excellent: - > 91%
2. Very Good: - > 81%
3. Good: - > 71%
4. Average: - 61%

Accordingly, you can decide what the salary will be for each slab.

Thanks,

Regards, Dinesh Divekar

"What key performance indicators (KPIs) do you believe are crucial for evaluating the performance of a junior accountant, and how do you ensure that you meet or exceed these benchmarks in your role?"

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I have corrected the spelling, grammar, and formatting in your input. The message now reads clearly and maintains its original meaning. Let me know if you need any further assistance.

Hi Mahek-Pitroda,

Key Performance Indicators (KPIs)

For evaluating the performance of a junior accountant can vary depending on the specific responsibilities and objectives of the role, but some common ones include:

Accuracy of Financial Records:
This measures the accuracy of the financial data entered into the accounting system. It can be evaluated by comparing financial statements with supporting documentation and identifying any discrepancies.

Timeliness of Reporting:
Timely submission of financial reports is crucial for decision-making within the organization. This KPI assesses how quickly the junior accountant can produce financial reports, such as monthly, quarterly, or annual statements.

Adherence to Accounting Standards:
Compliance with accounting standards ensures that financial reports are prepared in accordance with regulations and industry standards. This KPI evaluates the junior accountant's understanding of accounting principles and their ability to apply them correctly.

Attention to Detail:
Given the intricate nature of accounting tasks, attention to detail is critical to avoid errors and inaccuracies in financial records. This KPI measures the junior accountant's ability to identify and correct errors in financial data.

Problem-Solving Skills:
Accounting often involves resolving complex issues and discrepancies. This KPI assesses the junior accountant's ability to analyze problems, identify root causes, and implement effective solutions.

Team Collaboration:
Accounting is rarely a solitary endeavor, so the ability to work effectively within a team is essential. This KPI evaluates how well the junior accountant collaborates with colleagues, communicates ideas, and contributes to group goals.

To ensure that these benchmarks are met or exceeded in my role, I prioritize ongoing learning and development to stay updated on accounting standards and industry best practices. Additionally, I pay close attention to detail in my work, double-checking entries and reconciliations to minimize errors. I also maintain open communication with my team members, seeking feedback and support when needed, and proactively offering assistance to others when I can. Lastly, I stay organized and manage my time effectively to meet deadlines consistently and deliver accurate financial reports in a timely manner.

Thanks

I am in need of drafting a Performance Management System (PMS) process that includes quarterly reviews. It would be appreciated if I could refer to some relevant PowerPoint presentations.