KRA and KPI based Appraisal Practice, Discussed at 79th HR Kurakani

Category: HR Kurakani | Date: June 6, 2019, 2:25 p.m. | Total Views: 1036

Hosted by Real Solutions P. Ltd on last Wednesday of English calendar every month 79th HR Kurakani was successfully held on 29th May, 2019 at HLE Nepal, Jawalakhel among 70 HR Professionals.

Ms. Jyotsna Shrestha welcomed all the participants with summary of HR Kurakani, followed by Session from, Mr. Suraj Shrestha, Head of Talent Management of eSewa Fonepay Pvt. Ltd. (F1Soft Group). Managing the performance of the employees being the major challenge for the HR professionals, the Kurakani was focused on the idea, opinion, challenges & current trend and practices sharing among the practitioners.

Performance Appraisal is one of the oldest and universal method of evaluating employees' work performance so as to determine how the employee is growing. Another major goals of performance appraisal as observed in several organizations is to evaluate the current pay rate of each employee and verifying factors that may influence the employees' quality of work. Performance appraisal additionally helps the manager and also the management to determine and create a plan for employee development through additional training and increased responsibilities.

HR Professionals from diverse organization participating in the session shared different methods they have been practicing for measuring performance of the employees. Few common practices as they shared were: Annual appraisal, Semi Annual Appraisal, Quarterly Appraisal and Monthly Appraisal. During the Kurakani it was agreed that the specific design of the traditional Performance Appraisal system differs from one organization to another depending on the size and nature of the organization.

However, the defect of traditional measurement system has given rise to a revolution within the performance appraisal system. It is realized that the a more continuous and integrated approach is required to manage and reward performance. Performance appraisal is now being used as a strategic tool to achieve an organizations long term goal aligned with the organizations vision. Managing performance within the organization means getting better result from each individuals of the organization, by understanding and managing performance with an agreed framework or KRAs (Key Result Areas) that comes from planned goals and vision of a firm. These KRAs are then converted to KPIs (Key Performance Indicators) for individuals

KPIs should be specific, measurable and aligned with organizations vision and should provide the management with the needed direction and the means to measure if an organization is achieving its stated goals and objective or not. The modern HR practitioners are trying to learn the new method of applying KRAs and KPIs in Performance Appraisal System in their organizations.

Key Result Area and Key Performance Indicator:

In human resource management, KRA implies the general areas of outcome as set by the organization for a specific role. Therefore, it highlights the scope of the job profile. It helps the employees to understand his/her role and responsibilities, in a better way. So, it needs to be clearly determined and quantified, so that the employee can line up their role with that of the aim of the firm.

On the other hand, KPI is the financial and non-financial metrics used by the firm to measure and track the progress of the firm in realization to the goals. It helps in understanding if the organization or an individual has chosen the right way to reach the final aim or not.

The business entities and the employees work continuously for the achievement of the mission but, it is rather difficult to measure how far they have worked towards the realization of goals. KRAs are those areas that requires the high level of performance to gain a competitive position, while KPIs acts as a tool to measure the achievement of an objective. “If you can’t measure it, you can’t manage it” said Mr. Shrestha.

Further the practitioners argued that the KRA and KPI based performance appraisal helps the business and the employees to:

  • Clarify their roles
  • Align their roles to the organisation’s business or strategic plan
  • Focus on results rather than activities
  • Set individual and team goals and objectives
  • Make value-added decisions

Steps to setting up KRAs and KPIs:

Here the professionals discussed that, empowering the line managers in defining KPIs and KRAs for the subordinates can help making it more clear, well defined and precise.  Well defined KRAs and KPIs aligned with the business objectives act as a scale to measure performance of the team and of an individual. Here are few steps suggested by Mr. Shrestha for setting up KRAs and KPIs:

  • Check Employees Profile and Job description and make list of critical functions
  • Find the skills and qualities of an employee and prepare a list of the responsibilities that can be assigned
  • Specify the objective clearly and ensure if its achievable
  • Review weekly or monthly to measure performance towards goal.
  • Mention measurable targets and duration to achieve the objectives.

In conclusion, HR Professionals and practitioner agreed that KRAs and KPIs are collectively essential elements of the Performance Appraisal cycle.  However, within the cycle, some have a “long-term” focus and some have a “short-term” focus and not every KRAs and KPIs are achievable.  If Performance Appraisal is to be implemented successfully, the correct documents and measures need to be used correctly, and in the correct place.