Varun Sharma walks out of his boss’ cabin disappointed. In discussing the
key result areas (KRA) with his boss, Varun felt they weren’t properly
defined, and were far too many. And to his surprise, he also found that he had
spent more time working in an area that was considered least important by his
boss. Unfortunately, Varun had spent long hours and energy in an area that least
contributed to his growth.
KRAs are defined in order to give direction to one’s function as a
professional, help one distinguish between ‘routine’ and ‘important’
milestones, achieve organizational goals, create a more transparent platform for
assessing individual performance and competencies. However, there is a school of
thought, which says that KRAs should not exist. Surprised? Let’s see why. One
is considered ‘outstanding’, if the KRAs are performed in an outstanding
manner. But the person may not be ‘outstanding’ in other areas that are
considered ‘key’ to the growth of both the individual and the organization.
However, these negative aspects can be corrected once we have the right process
of setting and modifying KRAs in place.
Meeting organizational goals
There is a need to understand that functions of people are not isolated from
each other but contribute to the long-term goals of the organization itself. The
process starts with the organization putting together its goals for the year and
establishing strategies for achieving these goals. This moves down to the
departmental level where objectives are set and ‘roadmaps’ are laid.
Monica Mudgal, senior manager-People Development, TechSpan shares with us the
process followed by her organization where objective performance criteria are
set at various levels — for the organization, for the function and ultimately
for the individual.
As is the case in most organizations, at TechSpan, organizational targets are
typically in the form of revenue or profit goals. These organizational targets
form the basis for functional targets, which are created by the functional heads
in consultation with the CEO, TechSpan India. Stemming from functional targets
are individual targets and KRAs. As software delivery is the largest group
within the company, all project managers and the country head meet once a year
to create a generic set of KRAs. Theses KRAs are applicable across projects,
which are then discussed and finalized mutually between the manager and the
individual joining a new assignment or project.
Raju Ahluwalia, associate V-P (human resources), Aithent Technologies, shares
with us his process of KRAs definition. “At Aithent, job descriptions are
input-oriented and the KRAs are output-oriented. There is a cross-functional
team comprising human resource and technology, which together develops job
descriptions, responsibilities and reviews the organization chart. Only after
this the top management finalizes the business plans, thereby allowing
individual KRAs to easily dovetail into the organizational business plan.”
Select important activities
Each individual should be given activities that will help the entire team
achieve common objectives. Therefore critical activities must be carefully
differentiated from routine tasks. One way of working on developmental KRAs is
to define critical aptitude and attitude for a position, find ways of measuring
the same and look into the gaps if any. One has to evaluate the most effective
methodology to fill in the gaps, which could then be incorporated in the KRAs.
At Aithent Technologies, four KRAs are defined for each individual depending on
the job description and business plans. The Individual Performance and
Development Review (IPDR) at TechSpan reviews not only performance through KRAs,
but also focus on the development of the individual.
Parameters that measure KRAs are schedules, zero errors, percentage
achievement, number of queries about the product/service, number of
complaints/appreciation, customer retention, levels of supervision required,
etc. Much as measurement is essential, so is a system of evaluation. Mangesh
Kirtane, director human resources, Cisco Systems, India says that at Cisco
measurement factors are kept in place by continually training and coaching
managers on performance management while defining clear, concise and tangible
objectives for them. Their ePM system provides an interactive, online tool for
writing and reviewing annual performance reviews.
Monica Mudgal of TechSpan says that consistency in rating of KRAs is
essential to avoid dissatisfaction and frustrations among team members and to
bring about fairness in the system. According to her is in ongoing training by
the human resources team, in the process of making KRAs, could be a solution.
KRAs: How important are they?
According weightage to each KRA is usually a good idea as it helps put
priorities in place, both for the appraiser and the appraisee. One aspect that
is often ignored is the resource requirement for achieving KRAs. At times, a KRA
may not be achieved simply because there is a resource crunch. Monica Mudgal
says that at TechSpan, each KRA is associated with a weight relative to the
other KRAs. These KRAs and the weights assigned to them are different for
different levels of employees in each function. Each KRA is then rated on a
six-point scale. This score is multiplied by the weight assigned to that KRA to
arrive at the weighted score for that particular KRA. The weighted scores for
the various KRAs are then added up to arrive at the composite score for the
overall performance of that employee.
Ensure employee commitment
Finally, before the KRAs are frozen, it is essential to buy the commitment
of an employee concerned. KRAs defined in a proper manner but not communicated
well would fall flat. Communication here does not merely mean informing the
appraisee, but discussing and defining them with the appraisee.
While doing this one needs to explain the reasons for giving importance to
the activities chosen, clarify the criteria for measurement and the systems used
for measurement. Mangesh Kirtane says that in modern-day organizations, where we
have distributed teams, matrixed management and broader span of control, the
success of this process lie in employees and managers being open and willing to
At Cisco, KRAs are called ‘initiatives’ which brings in an element of
proactivity. While the employees establish initiatives, receive feedback,
initiate the review and seek development opportunities, the managers provide
coaching and course correction. Monica Mudgal believes that it is imperative
that employees agree on the KRAs set, and accept the need for teamwork.”
There is a strong need to invest time and resources in the process of setting
individual KRAs,” she says.
A common grievance that appraisers and the HR department have to deal with
appraisals is the change in a business scenario due to which targets could not
be achieved. To avoid such a situation, one should keep an eye on the targets
and change them mid-term rather than exchange unpleasant notes at the end of the
cycle. Aithent Technologies for instance reviews KRAs every six months and has a
provision for mid-course correction. Monica Mudgal says that organizational
targets are reviewed, discussed and finalized by the Executive Management of
TechSpan at least once every year, and revised in case of changes in the
business plan. Periodic revisions may then be made to these functional targets
as a result of changes in the organizational targets. She adds that although the
responsibility for identifying and reviewing their own KRAs lies with
individuals and their reporting managers, the people development team is
responsible for archiving KRAs and facilitating reviews and changes to the same.
Spending time on charting out employtee KRAs can go a long way toward the
growth of an individual, as also his/her organization. One simply needs to watch
for some common pitfalls–lack of clarity in business goals, in measurement
criteria and in systems through which measurements are made. One also needs to
avoid over-reliance on numbers and overlooking qualitative aspect. So don’t
get paranoid the next time your employer says you have not met your KRAs. And
employers, be clear on the KRAs you set. They may be the difference between
achieving your goals and…
Ritu Malhotra In New Delhi