1) a) KRA (Key result Area):
Key functions where the results of actions significantly contribute to the achievement of organizational objectives
b) KPI (Key performance Indicator ) :
a set of indicators to measure data against, a sort-of enterprise success gauge. Ultimately, they help an organization assess progress toward declared goals. Indicators include quantitative metrics such as process tracking and progress measurement. KPI's are financial and non-financial metrics used to help an organization define and measure progress toward organizational goals
Quantifiable : A KPI is a key part of a measurable objective, which is made up of a direction, KPI, benchmark, target and time frame. For example: "Increase Average Revenue per Customer from £10 to £15 by EOY 2008". In this case, 'Average Revenue
Per Customer' is the KPI.
2) As you are already aware that KRA stands for Key Result Area.
Actually in the true sense KRA is a concept which is usually very difficult to implement.
How it works I will try to explain.
At first the BOD(Board of Directors) decides upon the Objectives of the company and set
a period specific target. This Target becomes the KRA of the CEO. Then it get divided till it reaches the bottom most rung. KRA of each person is linked and fulfillment of KRA will lead to fulfillment of objective set by BOD. Hence, if one person fail it will hamper the attainment of the desired result. Let me give you an example: The Company sells PCs Suppose the objective decided by the Board is to make a profit of 500 crores in 3 years. The KRA of CEO is to attain 500 crore profit in 3 years. The CEO decides to attain this by making 400 crores by selling PCs, 50 Crores by Investing in Stocks and 50 Crores by improving productive cycle. Now the KRA of Cheif Marketing Officer will be to sell PCs that will give the company 400 crore profit in 3 years. He will then set the...
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