What is the difference between KRA, KPA and KPI?

Dear Mohammed,

 

A Key Performance Indicator (KPI) is a specific measure of an organization’s performance in an area of its business. It is a general concept, with different implementations depending on the type of business and goals of the organization.

 

From the perspective of balance scorecard, KPIs can be categorized by financial, customer, internal processes and learning&growth.

 

For more information, you can refer to www.smartKPIs.com

 

Key Result Areas [KRA]

 

“Key Result Areas” or KRAs refer to general areas of outcomes or outputs for which the department's role is responsible. A typical role targets three to five KRA.

 

Regards,

 

Hany Sewilam Abdel Hamid

Business Development Manager

Entrepreneurship Coach & Consultant              

 

- http://www.sewilam.com

- facebook.com /Orkanza

- twitter.com /HanySewilam

 

 

Key Result Areas(KRA) is like overall function of an employee,

Key Perfomance Area (KPA) Perfomace Required ares  

Key Perfomace Indicator(KPI) How , When you achievd your assigned targets?

 

Eg: For HR, 

All areas is your KRA

Recruitment is Your KPA

How much time taken for filling the Vaccancy will be your KPI.

 

KEY RESULT AREAS (KRA) As the first step to build KRAs, KRAs are also known as key work outputs (KWOs). KRA IS GUIDED / LINKED BY THE1. YOU must visit your company's VISION STATEMENT MISSION STATEMENT CORPORATE OBJECTIVES CORPORATE STRATEGY CORPORATE BUSINESS UNITS/ DEPARTMENTAL PLANS/STRATEGY. ***And could change year by year as per the board directives.2. THEN REVIEW YOUR HR DEPARTMENT'S HR OBJECTIVES HR STRATEGIES ALIGN IT WITH CORPORATE OBJECTIVES/ STRATEGIES3. KRA refers to general areas of outcomes or outputs for which a role is responsible. A typical role targets three to five KRA STRENGTHS OF KRA Value Identifying KRAs helps individuals, Clarify their roles • Align their roles to the organization’s business or strategic plan. Focus on results rather than activities. Communicate their role’s purposes to others. Set goals and objectives. Prioritize their activities, and therefore improve their time/work management. Make value-added decisions Description Key result areas (KRAs) capture about80% of a work role. The remainder of the role is usually devoted to areas of shared responsibility (e.g., helping team members, participating in activities for the griptionood of the Organisation). WEAKNESSES OF KRA -highly selective, and hence some areas could be neglected. -too focused, less development of other areas. -normally, it only makes80% of the total job. - Less emphasis on process. OPPORTUNITIES OF KRA -Increased focus on the outcomes -improve the competencies of KEY RESULT AREAS. -FOCUSED RESPONSIBILITES -BEING MADE ACCOUNTABLE -RESPONSIBLE FOR THE DELIVERABLES -FINE TUNING OF THE MEASURABLES MORE EFFECTIVELY THREATS OF KRA -POORLY DEFINED JOB DESCRIPTION -MULTI ROLE JOB -REPORTING TO TWO BOSSES -ROLE AMBIQUITY Provident Fund Full Details:p>:p> Example HR [KRAs] CORE KRAs1. Payroll Management2. Benefits Management3. Statutory Admin4. Employee Relations5. Recruitment/ selection6. Workforce planning/ diversity7. Performance management8. Reward management9. Workplace management and relations10. Safety and health workplace11. Building capabilities and organization learning12. Effective HR management systems, support and monitoring Here are some examples: MANAGING DIRECTOR ' S KRA -sales revenue -gross profit. -net profit. -% rise in share price -productivity improvement % etc etc SALES MANAGER 'S KRA -sales growth % -market share growth % -no. of new customers etc etc KEY PERFORMANCE AREAS [KPA] These are the areas within the ORGANIZATION FUNCTIONS, where an individual or group, is logically responsible / accountable for the results. ***To manage each KRA, a set of KPA / KPI are set. KPA and hence KPI is attributed to the person who can have effect on the business results and is self measured where applicable Example:1 KRA = Recruitment / Selection KPA1 = Recruitment KPA2= Selection Example:2 KRA = Employee Benefits KPA = providing all statutory benefits (ESI, PF…) KPA = providing all other benefits provided by company. India's TOP15 best cities for IT-BPO growth KEY PERFORMANCE INDICATORS (KPI) Select a KPI for each KPA, which would enable the individual to improve performance to achieve the objectives. Example KPI for KPA1 = reduce the recruitment cost per head by10%. KPI for KPA2 = finalize selection in5 weeks for each individual position. ***The Choice of HR KPI will vary from year to year under… SUBJECT TO COMPANY'S STRATEGIC PLANNING CORPORATE STRATEGIES CORPORATE OBJECTIVES In HR turn affects like -HR STRATEGIC PLANNING -HRM STRATEGIES -HRM OBJECTIVES Frequently used HR Key Performance Indicators include: [[FTE = full time employees]] Revenue per Employee (FTE) Assets per FTE Training Hours per FTE Training Costs per FTE HR Department Cost per FTE FTEs per HR Department FTE Acceptance Rate Average Cost per Hire Absence Rate Turnover Rate Resignation Rate Human Investment Ratio Compensation & Benefits/Revenue Average Remuneration Time taken per recruitment Cost per recruitment EXAMPLES of KRAs / KPAs / KPIs KRA1 - RECRUITMENT/ SELECTION KPA1 - RECRUITMENT KPI1 - Average time taken per employee2 months KPA2 -SELECTION [ KPI = average cost per new employee RS10,000] ==================================== KRA2 - WORKFORCE PLANNING/ DIVERSITY KPA1 - ANSENTEEISM [ KPI = absent rate at5%] KPA2- TURNOVER [ KPI = turnover rate at7%] KPA3- DIVERSITY [ KPI =3 FEMALES TO BE INDUCTED INTO MANAGEMENT CADRE] ===================================== KRA3- PERFORMANCE MANAGEMENT KPA1 - PERFORMANCE APPRAISALS [KPI = all staff to be appraised at least once annually] KPA2 -SUCCESSION PLANNING [ KPI =8 POTENTAL staff to be identified and talent managed] =================================== KRA4 - REWARD MANAGEMENT KPA1- MARKET ORIENTED SALARY STRUCTURING [ KPI = total compensation to sales12%] KPA2 -BENEFITS PLANNING [ KPI =6% of total salary bill] ============================================ KRA5 - WORKPLACE MANAGEMENT AND RELATIONS KPA1 -JOB EVALUATIONS [ KPI =600 lower staff , below grade4 to be evaluated] KPA2 - EMPLOYEE COMMUNICATIONS [ KPI =4 newsletter on intranet, one per quarter ] =========================================== KRA6 - SAFETY AND HEALTH WORKPLACE KPA1 - SAFETY [ KPI = accident safety ratings, benchmark with industry] KPA2 - HEALTH [KPI = actual health expenditure vs budget ] ======================================== KRA7 - BUILDING CAPABILITIES AND ORGANIZATION LEARNING KPA1 - TRAINING [ KPI = average training hours per employee annually=24 hours] KPA2 - MANAGEMENT DEVELOPMENT [ KPI =average MD cost per employee annually=16000 RS] ============================================ KRA8 - EFFECTIVE HR MANAGEMENT SYSTEMS , SUPPORT AND MONITORING KPA1- HRIS [ KPI = finalize the software . RS1.2 million capital budget] HERE ARE SOME COMMON EXAMPLES FOR EACH ELEMENT, YOU CAN SET YOUR OWN THRESHHOLD, BASED ON YOUR COMPANY STRATEGY/ HR STRATEGY. ================================================== ===1.ABSENTEEISM PER EMPLOYEES [DAYS]2.AVERAGE RECRUITMENT TIME [DAYS]3.EMPLOYEE TURNOVER [ % ]4.EMPLOYEE SATISFACTION [ LEVELS ]5.AVERAGE EMPLOYEE TENURE [ YEARS]6.INDUCTION TRAINING [ % OF NEW EMPLOYEES]7. TRAINING WORKSHOP [ % ] CONDUCTED/PLANNED8. TRAINING AT EXTERNAL COURSES [ %] ACTUAL / PLANNED9.PERFORMANCE APPRAISALS [ NOS.] AGAINST TOTAL EMPLOYEES.