Workshop on KRA/KPI

1 KEY PERFORMANCE INDICATORS (KPI) & Key

Result Areas (KRA)

2 Setting & Cascading KPI

Workshop
Agenda
3 Track, report & Improve KPI

4 Linking KPI to appraisal

5 Process Planning in appraisal review

Workshop on KRA/KPI

Introduction

Goal & Rules for this session

This training focuses on Key Performance Indicators, also

known as KPI or Key Success Indicators (KSI), help an
organisation define and measure progress toward
organisational goals

For any questions kindly drop a message in message box, it

will be taken
Kindly put yourself on mute, unmute whenever asked
 1
KRA & KPI Meaning
 INTRODUCTION

• KRA's is the set of activities on which performances are rated.

• KRA's are Key Result Areas which are the main objectives of the employee in an organization.

• Key Result Areas or KRA's refer to general areas of outcomes or outputs for which a role is responsible.

• KRA's are also known as key work outputs (KWO's).

• •Sub Activity/s under each KRA

• – Eg;- KRA- Increase profit per file
• »KPI 1- Total profit
• »KPI 2- Profit v expenses
• There can be more than one KPI under a KRA
 kra’s distribution ….
20% are

shared responsibilities
80%
20% like

kra’s are ● Helping team members.

80% of work role
● Image of the organization.
● Activities good for the organization.

Most roles include 3 to 5 key result areas. If individuals are accountable for more than
this, they may be overloaded
 How KRA’s are derived ????

Mission and Vision derived

Strategy

Organisation Objective

Dept Goal / Manager KRA

Individual Individual
KRA KRA

Individual
KRA
 Key Performance Indicators
What are KPIs?

KPIs are measures to understand performance that almost always quantifiable, comparing and tracking
performance regularly over a time frame. ( Measurement to see if KRA is met)

E.g. In Marketing: Number of new subscribers per blog post

In Manufacturing: Reject Rate percent

Why do we need KPIs?

• Meeting KRA’s

• Control, Feedback & Improvement

• Driving Change and Motivation

• Evaluation and Reward

 2
We have understood what is KRA/KPI now
let’ define business direction and see how
KRA/KPI get fixed.
 Why we exist? Who we are?
Mission Motivation : Purpose

Vision What we want to be? ( 5 year)

Hope : Ambition
How we are going to achieve this?
Strategy Plan : Sequencing

Goals How we will gauge our success?

Principle : Beliefs

KPIs How we measure our situation, progress and success?

Actions : Timeframes : Outcomes
Purpose :- To upskill people
Mission:- to be the best upskill agency for IT,HR
Vision:- To be the best training institute in next 5 years in south India
Goal:- Train 5000 people this year
Goal :- Best support services
From Vision we decided The People, Departments & competencies required and build Org
chart and from yearly goal we decide if more People required
 Company Vision, Mission, and Values
Vision, mission and values should provide guidance to the board of directors, business partners, customers and employees regarding
the organization’s direction. In the absence of this vital information, direction of the organization will be unclear and could
contribute to a misuse of valuable resources (i.e. time and money) in pursuit of a strategy that is not aligned with the true course of
the organization.

Company Vision Company Mission

“ Honoring our past by creating a “ Delivering exceptional value to our customers through the
future characterised by stimulated engagement of our talented people, the application of best
growth, development and the practice thinking in everything we do, the emphasis on quality
incessant practice of excellence in and excellence and the focus on delivering superior
everything we do ” performance that preserves our future ”

Company Corporate Values

1. Honesty 2. Respect 3. Responsibility 4. Innovation

Our Compass Our Conviction Our Consensus Our Catalyst

5. Excellence 6. Creativity 7. One Team

Our Purpose Our Quest Our Ethos
The following can serve as a starting point for your preparation of your written Strategic Plan:
● Statement of Mission, Vision and Core Values
● Summary Statement of Business Strategy Strategy Chart
● Current Assessments:
○ Culture and Talent
○ Markets and Customers
○ Local, Regional and National Economies
○ Financial Position, including Loan Quality and Capital
○ Regulatory and Legislative Environment
○ Human Resources: Culture, Capabilities, Employee Team, Management
○ Technology, digital, cybersecurity
○ Risks
● Summary of SWOT Assessment
● Planning Scenario Narrative:
○ Baseline ("Most Likely")
○ Pessimistic
○ Optimistic
● Identification and Assessment of Key Issues and Risks
● Goals, Objectives and Key Initiatives
● Financial Projections
SWOT
2022-2024 Strategy Refinement & Alignment- Timeline
Each cascade follows same general process

Business
Group MD CFO
Services
Real Estate Investment
Company L3 Organization Structure (R.E. PILOT)
Hospitality Industrial

L1 L2 L3
Project Plan, L1 BSC L2 BSC L3 BSC 2019
6 SBU Budget 2019 2018 Q4
Framework Strategy
Draft ** Draft Draft Programs Alignment Strategy QPR
& Tools BOD Mtg.

OCT NOV DEC JAN FEB

Current State L2 Workshop L2 L2 Init. Strategy L3 Workshop All Staff All Staff 2019 Jan
Assessment & /Meetings & Program Draft & Perf. Training Training MPR
/Meetings
L1 Workshop L3 Training Draft Guide

** Pending on 5 Years Business Plan completion * Pending on available time and resources

3 weeks 6 weeks 8 weeks

 Company Strategy & Performance Framework with BSC

8 Common Corporate Objectives were

Company Strategy
Visi
As illustrated on the right, Company on
used (L1-L3) to strengthen alignment,
strategy execution, and simplification
Strategy & Performance Framework Mis
includes Company's vision, mission, sio
values, common objectives (holding, SBU, n
and department), programs, initiatives, Target
and KPIs. 1 Corporate
KPIs
(~14)
Actual
Company
Objectives (8)
L1 Scorecard

Target
6 SBU
KPIs
L2
es

Units Objectives (8) Scorecards

u

(~100)
Val

Actual

Company Business Plans

Target
KPIs
(~300)
Department Objectives (8) L3 ~15 Depts.
Scorecards
Actual

Progress 6 SBU
& Budget Programs
KPIs 6 Programs & ~61 Initiatives ~61 Initiative
(~100) Charters
Actual
 3
Strategy Map - BSC
4 Perspectives in Balanced Scorecard
Financial Perspective
The Strategy If we succeed, how will we
look to our shareholders?

Customer Perspective
To achieve our vision, how
must we look to our
customers?
Internal Perspective
To satisfy our customers,
which processes must we
excel at?
Learning & Growth Perspective

To achieve our vision, how must

our organization learn and
improve?
 Strategy Map
Strategy Map Framework
Long-term Shareholder Value

Cost Efficiency Revenue Growth

Financial

Customer Price Quality Service Availability Brand

Operations Customer Regulatory

Innovation
Internal Process Management Management Processes
and Social
Processes Processes Processes

Learning & Growth Human Capital Organization Capital Information Capital

 Financial Perspective
• In private companies, the financial perspective is the main
objective (ultimate goal) – without having to sacrifice the
interests of other relevant stakeholders (community,
environment, government, etc.)

• In the financial perspective, the strategic goal is the

long-term shareholder value. This goal is driven by two
factors, namely : revenue growth and cost efficiency.
Strategic Objectives in Financial
Long-term Shareholder
Value

Cost Efficiency Revenue Growth

Improve Cost Structure Expand Revenue

Opportunities
Increase Asset Utilization Enhance Customer Value
 Customer Perspective
• This perspective is very instrumental, because without
customers, how can a company survive?

• Customer perspective covers the following elements:

• Customer acquisition
• Customer retention
• Customer profitability
• Market share
• Customer satisfaction
Strategic Objectives in Customer

Customer Retention Customer Profitability

Customer Satisfaction Market Share

Customer Acquisition

Price Quality Service Availability Brand

 Internal Process Perspective
• This perspective reflects the processes in key business that
should be optimized in order to meet the needs of the
customers.

• There are four main themes in this perspective, namely:

• Operations Management Process

• Customer Management Process

• Innovation Process

• Regulatory and Social Process

 Strategic Objectives in Internal Process
Operations
Customer Regulatory
Management Innovation
Management and Social
Processes Processes
Processes Processes

Processes that Processes that Processes that Processes that

produce and deliver enhance customer create new improve
products and value products and communities and
services services the environment

• Supply • Selection • New Ideas • Environment

• Production • Acquisition • R&D Portfolio • Safety & Health
• Distribution • Retention • Design/ Develop • Employment
• Growth • Launch • Community
 Learning & Growth Perspective
• This perspective reflects the capability that a company should
have, namely:
• Human Capital
• Organization Capital
• Information Capital
• This perspective shows us that good human resource
development system, organizational system and information
system forms a solid foundation for improving company
performance.
Strategic Objectives in
Learning & Growth
Human Capital Organization Information
Capital Capital

• Skills • Culture • Systems

• Knowledge • Leadership • Database
• Attitude • Organization • Networks
Development
Company Strategy Map
 IT Strategy Map Template
Drive Long term
Shareholder Value

Optimize IT Efficiency Enhance IT Impact on

Enterprise Outcome
Financial

Deliver Consistent, High Provide Business Units with

Quality IT Service Innovative IT Solutions

Customer

Maintain a Develop Effective Decision Propose and Deliver

Reliable IT Support System Transformational Applications
Infrastructure
IT Internal Process

Learning & Growth

Develop Strategic & Functional IT Enhance IT Tools that Enhance Promote Customer-focused
Competencies the IT Function Culture
 Finance Strategy Map Template
Drive Long term
Shareholder Value

Optimize Financial Efficiency Enhance Finance Effectiveness on

Enterprise Outcome
Financial

Deliver Responsive & Efficient Provide Clear & Reliable

Finance Operations Required Disclosure

Customer

Achieve Finance Develop Financial Ensure Compliance

Process Information to with Regulatory Requirements
Excellence Improve Decision Making
Finance Internal Process

Learning & Growth

Develop Strategic & Functional Use Technology to Improve Promote Customer-focused
Finance Competencies Financial Information Culture
Delivery
 Marketing Strategy Map Template
Drive Long term
Shareholder Value

Financial Increase Sales

Optimize Marketing Efficiency
Revenue

Customer Create Satisfied and Loyal Enhance Brand

Customers Image

Develop Effective Develop Develop Accelerate

Customer Relation Innovative Marketing Business New Product
Internal Process Management Marketing Intelligence Development
Communication Ideas
Program

Learning & Growth

Develop Strategic & Functional Enhance Technology Foster Creative Thinking &
Marketing Competencies for Marketing Innovative Solutions
 L1 Company KPIs: FINANCE

DRAFT KPI DEFINITION

STRATEGIC
KPI NAME KPI DESCRIPTION FREQ. UNIT D / I 2018 Q1 Q2 Q3 Q4 2019 2020 2021
OBJECTIVE
Controlling the operational cost of the
OPEX budget organization is crucial to achieve the best
Quarterly % D 90 90 90 90 90 90 90 90
performance * possible financial result and to limit
Optimize capital accumulated losses.
& operating
expenditure It is crucial to control the CAPEX spend to
CAPEX budget
ensure a timely and cost-efficient Quarterly % I 100 100 100 100 100 100 100 100
performance
progression of Company CAPEX projects
Finance

EBITDA means "Earnings Before Interest, 120. 120.

EBITDA *^ Quarterly Mill I 73 30 50 90 180 265
Tax, Depreciation & Amortization" 5 5

This include all real estate, private and public

% Yield Quarterly % I 4 5 5 6 6 6 7 7
equities
Maximize revenues
& returns from
core & new businesses This include total assets (including growth)
Total value of assets owned in investments, real estate, and Yearly Bill I 6.2 6.2 6.3 6.5 6.6 6.6 6.9 7.1
hospitality

This include total revenues from investments,

Total revenues *^ real estate, industrial, hospitality, and other Quarterly Mill I 247 80 170 280 387 387 459 564
revenues to Holding

* Common KPI – L2 ** Common KPI – L2 & L3

Company strategy 2022-2024 39

 L1 Company KPIs: CUSTOMER

DRAFT KPI DEFINITION

STRATEGIC
KPI NAME KPI DESCRIPTION FREQ. UNIT D / I 2018 Q1 Q2 Q3 Q4 2019 2020 2021
OBJECTIVE

To track all RE effectiveness to

% Real estate
rent all available units and Quarterly % D 50 60 65 70 75 75 80 80
vacancy rate
decrease loss on vacant units.

Increase customer base

Customers

% Assets in international Company direction is to diversify investments

& products Quarterly % I 2 2 3 3 4 4 4 5
markets more into international markets
and services

To be able to increase revenue and sales it is

# of new product introduced Company strategic direction to add new Quarterly Product I 3 1 1 1 2 2 2 2
products to our sales offerings

fied customers is crucial to guarantee a smooth

Provide quality
% Customers growth. All Company main customers should
& innovative customer Yearly % I 70 80 80
Satisfaction *^ be included in this unified and centralized
service
survey.

* Common KPI – L2 ** Common KPI – L2 & L3

Company strategy 2022-2024 40

 L1 Company KPIs: INTERNAL PROCESSES

DRAFT KPI DEFINITION

STRATEGIC
KPI NAME KPI DESCRIPTION FREQ. UNIT D / I 2018 Q1 Q2 Q3 Q4 2019 2020 2021
OBJECTIVE
Complying with audit observations is important
% of Timely closure of for Company’s success and should be handled,
Quarterly % I 20 40 50 50 80 90
audit observations * addressed, and closed by each division and
Build effective department.
organization
governance To track outstanding unpaid
Total revenues (AR) outstanding
revenues > 180 days Quarterly Mill SR D 16 10 8 3 0 0 0 0
overdue >180 days
(Account Receivable)
Internal Processes

Average # days to To track average # days to process Company

Quarterly Days D 45 30 25 20 15 22 8 8
process payments suppliers payments from invoice due date

In order to achieve operational excellence,

# of key business processes Bus.
Company needs to enhance and/or automate Quarterly I 5 7 10 15 15 10 10
improved and/ar automated ** Process
existing processes.
Improve & automate
efficient processes
% Programs progress To track progress of all approved 6 programs
Quarterly % I 83 50 50 66 83 83 83 83
as per plan (Green) As per all 6 Programs sheets. (Green)

To track budget spending of all approved

% Program within
programs (with budget). As per all 6 approved Quarterly % I 90 90 90 90 90 90 90 90
planned budget
sheets. (Green)

* Common KPI – L2 ** Common KPI – L2 & L3

Company strategy 2022-2024 41

 L1 Company KPIs: PEOPLE

DRAFT KPI DEFINITION

STRATEGIC
KPI NAME KPI DESCRIPTION FREQ. UNIT D / I 2018 Q1 Q2 Q3 Q4 2019 2020 2021
OBJECTIVE
All Company Employee satisfaction is an
Average employee
important measure to ensure efficiency and Yearly % I 75 75 80 85
satisfaction rating **
effectiveness in the organization.

his cover total amount saved or increase

Enhance Company Total amount saved or increase revenue through innovation program
Quarterly Mill SR I 0.5 1 2 3 3 4 6
Performance culture revenue through innovation program (cumulative per one year) and based on
implemented ideas only. ALIF included.

To track overall level of Company teams

% of Green KPIs at
performance. The Green indicates Quarterly % I 60 60 65 70 75 75 80 80
People

L1+L2+L3 BSCs
met target or better (>= 100%)

To enable upskilling and continuous

Average training
improvement of the workforce, regular training Quarterly Hour I 30 10 20 30 40 40 40 40
hours per FTE **
and development initiatives are crucial.

To keep Company manpower stable by

Attract & retain & % Employees retaining good performing employees. This %
Quarterly % D 22 21 20 19 17 17 15 10
develop capable talent Turnover * include voluntary and non-voluntary
terminations.

Includes all positions for all grades (excludes

% of Vacant positions Quarterly % D 33 28 23 18 15 15 10 5
ALIF)

* Common KPI – L2 ** Common KPI – L2 & L3

Company strategy 2022-2024 42

 4
KPI Selection
Question 4
 Key Performance Indicators
Business Perspective – Metrics

From the perspective of the business owners / investors, 3 of the most important overall KPIs are

Net Profit Maximising revenue ↑

(Revenue – Costs) Minimising costs ↓

ROCE or ROI % Higher ROCE

(Return on Capital or
Employed) (Return on Higher ROI
Investment)

Cash into the business

vs
Cashflow Cash going out
Minimising time between spending cash and
receiving it
 Key Performance Indicators
Operations Perspective
Areas of Operations Performance: - going deeper in this one example area of a business.

Output: Quantity of value created / per time period e.g., Cars made / month

Productivity: Output / a Cost e.g., Cars made per man hour

Quality: Poor quality is a cost which affects revenue and productivity

Inventory: Money tied up in material (capital employed), that affects the business’s overall ROCE.
Inventory comes with many types of costs. (Operational, Holding, Financing etc.)

Delivery: Getting the goods to the customer fast. Delivery is still part of output and affects inventory
levels

Customer Satisfaction : Essential for long term revenue and profit success

Safety: -Also, not directly financially related but essential for happy, productive employees, legal
compliance and minimizing risk
 Key Performance Indicators
Business Perspective – Metrics

From the perspective of the business owners / investors, 3 of the most important overall KPIs are

Net Profit Maximising revenue ↑

(Revenue – Costs) Minimising costs ↓

ROCE or ROI % Higher ROCE

(Return on Capital or
Employed) (Return on Higher ROI
Investment)

Cash into the business

vs
Cashflow Cash going out
Minimising time between spending cash and
receiving it
 5
Company
Strategy Reporting & Review Meetings
 MPR Operational Vs. QPR Meetings Leading

L1 & L2 BSC Tracking Having Monthly Operational Meetings Means Quarterly Meetings Will Have Greater Impact

Identify issues Develop solutions to issues

QPR: Strategy Management

Process (ensure execution of the long-range strategy)
Programs Tracking MD Managing
Time Allocation the QPR
Q1 QPR Feedback Q2 QPR Q3 QPR Q4 QPR
Last Last Last Last Meetings
60% Refine Strategic week week
week week
Issues October January
April July

30% Discuss
Implications
10%
L3 BSC Tracking Review
Performance

MPR: Operational Management

(Apr-Jul-Oct-Jan) Process ensure execution of short term plan/budget)
(

SBU CEO/CFO
Time Allocation
Managing the
Monthly Performance Review (MPR)
10% Actions MPR
Initiatives Tracking 40% Quarterly Performance Review (QPR)
Meetings
Discuss
Implications

50% Review
Performance
1 2 3 4 5 6 7 8 9 10 11 12

Q Q Q Q
1
Company strategy 2022-2024
2 3 4 68
 Determine Performance Status Reporting

It is worth noting that targets could have disadvantages in Once KPIs and their respective targets have been set and agreed, it is important, over the following weeks and months,
terms of setting direction to employees. Employees could to monitor performance against them. In order to do this, it is necessary to have well-studied and carefully set ranges for
focus on what is expected and not necessarily on what needs targets if an organization’s strategic plan is to be successful. The figure below shows some universal target ranges that
to be done. Each department should consider the expertise could be used by any business.
behind the target-setting and how employees concerned will
behave.

It’s also important to note that the relationships

between targets are also crucial. Setting one target ✔ Determine and/or reference a “rules-based” system to define status
inappropriately can have an impact on other targets. ✔ Select and justify a red/yellow/green judgment for:
Managers should aim to set targets in such a way − Goals
that each individual KPI is optimized to result in the − Strategies
best overall outcome for the organization.
− KPIs
✔ Convert all KPI figures to “Percentages” before applying G/Y/R rule
When calculating the percentages to monitor the KPI
status, the following formulas can be used:

A. For KPIs where an increase is

preferable: actual results/target =
percentage. For example: US$8m Green – Performance meets or exceed targets (>=100%)
actual revenues/US$5m target
revenues = 160% (green) Yellow – Performance failing below expected targets (80~99%)

Red – Performance falls significantly short of targets (<=80%)

B. For KPIs where a decrease is
preferable: target/actual results =
percentage. For example:
5 customer complaints/8 actual
complaints = 63% (red). The red, yellow, green convention is organizationally determined

Company strategy 2022-2024 69

 PERFORMANCE
TARGET
An indicator established to
determine how successful the
performance is in achieving the
objectives

The
PERFORMANCE terminologies
THRESHOLDS
Maximum acceptable variances for a
selected KPI/ metrics
 PERFORMANCE
BASELINE
Average level of performance that
you are currently at, and compare
the future performance levels with,
to evaluate change

The
PERFORMANCE terminologies
BENCHMARK
The best performance- being achieved
by a competitor: a different unit, a
different company or a different industry
• Minimum or starting point used for comparisons
• A baseline for your performance measure is the average
level of performance that you are currently at, and that you
will compare future performance levels with to test if
performance is really changing. Baseline
 • when production
volume is very low
• cycle time to
build a product is
long
• cost of sampling is
high
XMR Chart
•or
getIMR
individual
Chart data
points only after
certain period of time

XMR- https://docs.google.com/spreadsheets/d/1zF-E3hAWyRVUOl7AhFlmEwJSIujYmxbV/edit#gid=1096385507
OULINER- https://docs.google.com/spreadsheets/d/1OM2b1_5X1HIUmZTRCg59wwa8xQmTF9Ud/edit#gid=1763567093
https://docs.google.com/spreadsheets/d/1i_Kmb-vDAYWcSORVNK6KBDwVKOtjqLPB/edit#gid=1700757165

Power BI dashboards
XMR XML charts
Sigma XL

BSC with KPI

reporting
 Performance Appraisal

The process by which an employee’s contribution to the organization during a

specified period of time is assessed.
 Performance vs Competency

Performance
Performance:
• “Performance” is a deliberate and purposeful
action or set of actions that an individual
takes in order to achieve a desired result or
output of some kind that has got value to the
individual.

Competency
• Competency:
• “Competency” can be thought of as the tools
that individuals use for successful or
exemplary or best-in-class performance. The
‘Best Performer’ is always called a ‘Competent
performer’ and not vice versa.
© ManagementStudyGuide.com. All rights reserved.
The five types of competencies affecting performance are:

Motives

Traits

Self-concept

Knowledge

Skill
Let us look at each in detail.
 • Measure the degree of characteristics required for adequate
performance of the job.

Poor Average Good Excellent

Graphic
Quantity of Work 1 2 3 4
Rating Scale
Quality of Work 1 2 3 4
Job knowledge 1 2 3 4
Dependability 1 2 3 4
Attitude 1 2 3 4
Knowledge of the transformation process

High Low

High Behavioral / Result Result

Ex: assembly workers Ex: sales PA
Methods
Vary upon
Low Behavioral Extensive selection/ training
Ex: reporters
Task
Ex: researchers
Types

Reliability and Validity of PA Measurement

Contemporary PA Concepts

Management by objectives (MBO)

360-degree feedback

Self-managed teams
90- 720°
Feedback
Workshop on
Talent
Management

9 box grid
Workshop on Talent Management

! 1A

of T 2A

A 3A
Workshop on Talent Management
Four Pillars
of TM Process
Workshop on Talent Management
Section management
survey

If want invest 100 Rs

 Forms
Self appraisal
Performance review
review form 1
review form 2

some other forms

https://in.pinterest.com/pin/699957967063734606/
Thank You