What is the difference between a KPI
and a KRA?
KRA stands for Key Result Area - Each role in a company generally has a number of
KRAs, which define the key areas that the employee needs to produce results in (for
example, for a HR Manager, one of the Key Result Areas might be Recruitment).
Typically organisations like to define a set of KRA's for each role in an company, so
that everybody's clear on the exact areas that the role is responsible for, and the
incumbent is clear where they need to focus their attention.
KPI stands for Key Performance Indicator - For me, KPIs describe the indicators of
performance or success for an employee. Again, using the example of the HR
Manager who has Recruitment as one of their KRA's, a typical KPI for this HR
Manager might be "Recruitment of Level 1 Positions within 3 months of notified
vacancy and within 90% of budget".
Others might use a slightly different approach - I find many companies have slight
variations on this theme, and sometimes KPIs/KRAs get mixed up and combined.
Which is not always a major problem, as long as in the end, people understand what
their job is (KRAs) and what results they need to deliver (KPIs).
Key Result Areas
“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.
Key Performance Areas
These are the areas within the HR DEPARTMENT, where an individual or group, is
logically responsible / accountable for the results.
To manage each KRA/ KPAs, a set of KPI are set .
HERE IS AN EXAMPLE, WHICH YOU CAN USE TO DEVELOP OTHERS FOR
CORPORATE OBJECTIVE / STRATEGY
-improve the company competitive positioning and productivity by 10%.
HR DEPARTMENT'S OBJECTIVE
-Achieve high productivity level in all activities [ say by 10%]
KPI ----reduce average time taken to fill vacancies by 15%
KPI ----reduce average cost per recruit by 10%
KPA -labour turnover
KPI ---reduce the labor turnover by 20%
KPI ----benchmark total HR COSTS externally.
-SAFETY AND HEALTH WORKPLACE
KPA ---workplace accidents
KPI ----reduce workplace accidents by 10%
-BUILDING CAPABILITIES AND ORGANIZATION LEARNING
KPI --- ALL WORKFORCE below middle management should receive a minimum
of 4 days of training.
THIS IS , ROUGHLY, HOW HR DEPARTMENTS KRAs / KPAs / KPIs ARE SET ,
MONITORED AND EVALUATED.
THIS CAN BE APPLIED TO ALL OTHER FUNCTIONAL DEPARTMENTS LIKE
MARKETING / SALES / PRODUCTION ETC.