How we build KPI and KRA for Performance Management, without making man to the level of machine.

Making man creative, agile and relates to business is the sole objectives of KPI and KRA are. Yet why many feels working like machine?

Here are my expressions and experiences for building organization working on KPI and KRA.

What are the objectives of KRA and KPI?

 Certainly not to make man to work to the level of machine but remain creative enough to solve various problems of the organization by attending specific areas in a focused manner. So, I will not buy a comment made around on KPI and KRA.

 We see many staffs do not work as per KPI and KRA, but still performing tasks well, then why KPI and KRA’s?

Basically, KPI and KRA are not only for performing tasks, but performing tasks in the context of various Objectives of the Organization. As Organization is navigating its products and services against the Competitors activities to remain superior over competitors.

When one assesses the reasons the employee resigns, you will find common 2 or 3 reasons employees are leaving the organization. So, unless organization does not work on those couple of repeated reasons of employee resigning, this mean organization is not agile enough to work on ground realities. So KPI and KRA remains based on focusing to resolve the reasons employee resigning as well.

Performance management.

 Performance management, often seen as an HR process, is actually a key business process that ensures individual and team goals dovetail into organisational goals without confusion.

No one reaches the goals in one step or two, it has multiple unending steps as organization goals keep changing based on business environments and so the knowledge, skills and experience requirements.

So to our clients we study their business objectives clearly, assess the roadmap to achieve business objectives, disturbing factors or reasons which are not making employees focused or competent enough to reach the business objectives.

So, what we do when client approach us?

Normally client approach us with vague business goals. We try to bring clarity in business goals and the way to achieve business goals clarity and build KPI and KRA based on individual strength and weaknesses to achieve his position roadmap.

Goals

A “goal” can be defined as “The purpose toward which an endeavour is directed“. In personal and organisational development terms, the goal is the main single aim of the entity.

Examples of Organisational Goals are:

·       “To be the leading supplier of IT applications in the Region” (however the region is defined – this is not important for the example.

·       “To be an Employer of Choice for IT or any specific stream employees”.

·       “To maximise Return on Investment to our Shareholders.

Examples of Objectives based on the above Goals are:

“To increase Market Share in the Region by 5% by year end without compromising on service.” (Obviously in this example a 5% increase is needed to become the leader)

“Reduce Employee Turnover by 5% by year end while maintaining a high level of internal talent” (No point in reducing turnover just to keep the “dead wood” of the organisation.

“Increase Profit after Tax by 5% by year end while maintaining headcount and service quality”. (No point in increasing profit if it leads to a falloff in service – which means reduced profit in following years!)

Key Result Areas (KRA)

Goals and Objectives are set at organisational level, then “cascaded” throughout the organisation to department, and even to individual level if applicable.

“Key Result Areas” or KRAs, also called “Key Performance Areas” (KPAs) refer to general areas of outcomes or outputs for which a role, or a combination of roles, is responsible. These are the areas within the organisation where an individual or group, is logically responsible / accountable for the results.

Typical CORE Key Results Areas for an IT department would be:

·       IT Strategy and Planning

·       Business Solutions (design, development and implementation)

·       Service Delivery – the management of the delivery of services to the organisation

·       Service Support – the support of users and service delivery environment

• Within the CORE Key Result Areas, there may be specific Key Result Areas:
• “Innovation” – if one of the objectives is to create new products and services.
• “Customer Focus” – if one of the objectives is to improve customer service.

KRAs always link back to Objectives and Goals. This is how we “plan” and “deliver” the achievement of goals.

Identifying KRAs helps the business area and the individuals in the business area to:

·       Clarify their roles.

·       Align their roles to the organisation’s business or strategic plan.

·       Focus on results rather than activities.

·       Communicate their role’s purposes to others.

·       Set individual and team goals and objectives.

·       Prioritise activities and improve time/work management.

·       Make value-added decisions.

·       A typical area target three to five KRAs.

 Key Performance Indicators

Sets of Key Performance Indicators, or KPIs, are established to measure performance in Key Results Areas (or Key Performance Areas) – and by definition, link back to the achievement of department / organisation objectives, and the achievement of the organisation’s goals.

Putting it All Together

Goals, objectives, KRAs, and KPIs come together under the banner of “Performance Management”.

Performance Management refers to the process of setting goals and regularly checking progress toward achieving those goals. It is a continuous process feedback loop whereby the outcomes are continually measured and compared with the target objectives. Any discrepancy or gap is then fed back into changing the inputs, so as to achieve the desired objectives. Any such management control system involves communicating the required change and promptly taking action to effect the desired change. This helps the system or organisation being managed to achieve the required goal or the strategic plan.

Performance Management has often been confused with “Performance appraisal”. “Performance Appraisal” forms only the final part of the performance management cycle. Performance Appraisal is a backwards looking process and a “Lagging Indicator” of performance, measuring what happened in the past. Performance Management is a forward-looking process and a “Leading Indicator” of performance because it drives a system or organisation towards a desired future goal.

Fundamental for Performance Management is the system that defines the requirements and sets the objectives. In Human Performance terms, this is the Job Description and the Performance Agreement which we develop in line with each employee talent and skills assessment basis and in-discussion with his career goals.

Working closely when needed helps to work on KPI and KRA as a team.

N.R. Doshi & Partners-HR Services provide KPI, KRA drafting services.

For more information: www.nrdoshi.ae / [email protected] / 050 745 1627