How companies should set up the right KRA structure

Behind every successful human resource (HR) team, there is a concrete strategy that is inclusive of specific goals, objectives, data, and predominantly key responsibility areas (KRAs) or key performance indicator (KPIs).

Dedeepya Ajith John, associate director – knowledge and advisory, SHRM APAC, says "The right KRA structure will help answer a fundamental yet the most important question on a daily basis (for the employees): What am I expected to do? It sets a clear picture of an individual's priorities and ability to focus and align one's work to organisational goals."

But then how do you structure the right KRA process?

Study the company's overall objectives and understand the HR's role in this equation. This will help one map the road in identifying the KRAs and then working towards it. Say, if you are looking at the HR team's KRAs, it could be any of few mentioned below: -

• Increasing employee engagement
   
• Improving performance management
   
• Enhancing employee growth and development
   
• Reducing attrition/absenteeism/costs
   
• Job referrals

Your KRA is a sum of both monetary and non-monetary objectives. "Setting up the right KRAs is like solving 80% of the problem, in any organisational context. A good KRA process has to be linked to the organisational goal and purpose next. It helps both balancing metrics as well as the right amount to stretch. A right balance is a key," adds John.

Your KRA structure needs to be SMART, this framework will help measure your KRAs accurately and ensure that they are effective. The framework could be as explained: -

Specific – Identified clearly as per the strategic goals

Measurable – Quantifiable in terms of success and ROI

Achievable – With a guideline that helps you achieve the results

Relevant – Aligned with the data available

Time Frame – As per the period defined to achieve them

In some companies, the KRAs maybe team-based or employee-based in respect to either focus on the finances or personal performances. In these structures the details will vary accordingly, it may be based on criteria such as bandwidth, time and company-specific requirements.

A good KRA structure should be devised on specific objectives in order to obtain a holistic view of the performance of the individual, say, financial objectives where the KRAs are linked to revenue or expenses. Other objectives could be process-based focusing on execution and behavioural competencies.

This helps in maintaining a balance between the quantitative and qualitative parameters in the structure.

Again, these aspects are subject to vary depending on the need of the role or the hour. Overall, it is important to ensure that it aligns with the organisation's goals.

Sukhdeep Aurora, chief people officer – ANAROCK Property Consultants, says, setting the right KRAs does not only help a firm achieve its business goals but is also a critical aspect of an employee's morale, engagement and retention.

"Employees need to clearly understand their specific roles so that their work is time-efficient and optimally productive. The annual or six-monthly performance review is the primary tool in setting KRAs. This is when managers can engage with their team members to identify obstacles and challenges in KRA expectations to find opportunities for improvement. From the resulting learnings, it is possible to set the appropriate goals in the future."

But goals need to be specific, measurable, relevant to the employee's role and skill-set and, most importantly, attainable, he adds, saying, "There needs to be clear timeline for each goal, as deadlines create focus and commitment. Also, attaining goal milestones must be accompanied by timely follow-ups and appropriate rewards."

These days, it's mandatory to have a KRA structure within an organisation. Although at times what acts as a disadvantage is that if the structure is not defined well, instead of improving the business operations, it ends up diminishing the value/objective behind the whole process.

Hence, the KRA adoption should be taken up with equal responsibility not just by the HR team but every employee at each level in the organisation.

The best way to work on it is to have a data-driven KRA structure. They will guarantee that your technical base is in place to construct and at the same time help you understand the results accurately in return.

The writer is manager - HR, SILA