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8/3/2019 KRA and KPI 2
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PERFORMANCE MANAGEMENT
- KRAs
- KPIs
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PERFORMANCE MANAGEMENT
It is the technique for beginning with
the end in mind. It involves analyzing the objectives &
goals for your Deptt. or work unit andensuring that they relate to theoverall goals of your company.
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COMPONENTS OF PERFORMANCE
MANAGEMENT
KEY RESULT AREAS
KEY PERFORMANCE INDICATORS
GOALS
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KEY RESULT AREASKey Result Areas or KRA's refer to generalareas of outcomes or outputs for which the
department's role is responsible.KRA's is the set of activities on whichperformances are rated.
Key Result Areas or KRA's refer to generalareas of outcomes or outputs for which a roleis responsible.
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KEY PERFORMANCE INDICATORSKPIs serve as the gauges which are used to evaluatehow well you have achieved your key results.
KPIs split into 2 types:-
a) Direct Key Performance Indicators relate directlyto a key result area.
b) Indirect Key Performance Indicators apply whereit is not possible to directly measure a key result area.
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GOALSThese are the tools to tell how toachieve your Key Result as per the
desired standards.Goals should be challenging, time-bound & measurable.
Goals should be in line with Mission,Vision, KRAs & KPIs.
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WHY TO IDENTIFY KRAs?
Identifying KRAs helps individuals
Clarify their roles.
Set goals and objectives.
Focus on results rather than activities.
Align their roles to the organizations business orstrategic plan.
Prioritize their activities, and therefore improve
their time/work management.Communicate their roles purposes to others
Make value-added decisions.
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EXAMPLESFor Marketing Deptt. :-a) If KRA is Sales then KPIs will be :-
Revenue over a given time.
Links sold.
b) If KRA is Profit then KPIs will be :-
To achieve annual sales.
Annual profit achieved.
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EXAMPLESKRAs of Finance & Accounting include :-1. Credit referencing
2. Capital expenditure
3. Security
4. Financial analysis5. Cost control
6. Internal audit
7. Regulatory reporting
8. Credit control
9. Financial records10. Payroll
11. Cash flow forecasting
12. Budgeting
13. Costing
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EXAMPLEKRAs of Quality include :-
Quality
KPIs could be :-Measure defects per million.
Knowledge of quality principles demonstrated by team.
Measure quantity of feedback from customers.
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COST1.Variance against budget2. Profit3. Waste
4. Overtime incurred5. Speed
TIMEReduction in number of minutes/hours/days etc.Deadlines and schedules met
Average call response timeProjects completed per week/month etc.Number of minutes between customers