While used interchangeably (and incorrectly), there is often a confusion between the terms KRA (Key Responsibility Areas), KPI (Key Performance Indicators) and Goals. Let us define these first.
Key Responsibility Area (KRA): Each employee has responsibilities based on their job role. These responsibilities are called KRAs and are described in the employees Job Description document.
Key Performance Indicators (KPI): The KPIs are measurable indicators used to gauge how well a Business Unit or Organization is doing. Examples include: Revenue, Profitability, Customer Satisfaction, Employee Engagement, Net Promoter Score, and many others.
Goals: An employee is expected to perform their duties based on their job role. In addition, their work should be aligned to the needs of their organization. The Job Role identifies the employees KRAs, and the Organizations define the KPIs. The mapping of the KRAs to KPIs as quantifiable statements gives employee goals.
To clarify these definitions further, let us look at a specific goal of a HR Manager who is responsible for hiring
- – Goal: Hire 5 sales executives in this quarter
- – KRA: Recruitment and onboarding of suitable candidates
- – KPI: Top-line growth
Benefits of defining KRAs
Having a well-defined set of KRAs for each job role has many advantages. including
- – Allows linking of each job role to business strategy
- – Top-down alignment of the organization
- – Setting of unambiguous goals for employees
- – Need based coaching and counseling
- – Periodic measurement of outcomes
- – Fair performance reviews
- – Hiring employees based on organization needs
While most managers are aware of employee job responsibilities, they find it difficult to articulate employee goals in a written form.
To help you in this area, we first share the approach to help you write SMART Goals using Job Descriptions (KRAs) and organization KPIs.
Next, to illustrate the concept further, we use three commonly occurring job descriptions: Sales Manager, HR Manager and IT Manager and three KPIs (New customer acquisition, Profitability and People development) to convert KRAs of each of these Job Descriptions to SMART employee goals.
How to WRITE SMART Goals (KRAs)?
Here are the 7 steps to help you write employee Goals from Job Descriptions (KRAs).
- Identify the appropriate Organization KPIs where the employee can contribute meaningfully. It is important to note that all KPIs are not applicable to each employee.
- Document the responsibilities of the employee in relation to the work they are doing. For the same Job Description, different employees may have different work responsibilities.
- The unique responsibilities found in step 2 above will help shortlist KRAs to be used for this employee. Map these to the department or organization KPIs.
- Categorize what the employee is expected to achieve into 2 different areas viz
- Measurable: Those achievements that are measurable in numbers, percentages or yes/no answers. Examples: Number of Hires, Number of Trainings Conducted, Number of New Customers, Percentage Increase in Revenue, Number of Customer Calls Handled
- Non-measurable: Those achievements that cannot be measured easily. Examples: Brand value, NPS, Productivity, Employee engagement
- Write each Goal making sure you clearly articulate the statement, have a measurable target and a realistic timeframe. Try to focus on the measurable goals first.
- Discuss the goals with the employee and take their acceptance.
- Review the goals and achievements on a quarterly basis. Organization needs (KPIs) evolve and the employee goals should be changed too.
Let us now look at writing goals for the three Job Descriptions.
Goals (KRAs) for a Sales Manager Position
|New Customer Acquisition||Ability to provide overall product value and differentiate support offerings that clearly map to customer needs.||– Research 5-10 customers with $500 Million revenue in retail segment; sign-up one account with $500K annual run rate|
|Evolve market research and segmentation strategy and develop new channels.||– Signup 3 partnerships with leading service distributors|
|Create and implements strategies and plans for lead generation.||– Develop a new sales office at Chicago and hire a team of 3 sales executives
– Build a team of 5 SDRs, each with a target of 3 qualified leads per week and 50 leads overall per month.
– Develop a marketing drip campaign with 100K emails per quarter
|Identify and resolve gaps in customer expectations versus actual service levels.||– F2F with each high value customer once per quarter
– Attending product review meetings monthly and discussion on key customer challenges
– Obtain one positive testimonial or reference per quarter
|People Development and engagement||Conduct strategic sales planning activities||– Coach team on the application of ‘value selling’ principles and practices. Conduct 2 coaching sessions per month.
– Implement lead generation standards and conduct 1 training per month
|Facilitate discussion of team goals, roles, needs, and responsibilities.||– Complete goal setting exercise for team members within 1 month of start of FY
– Identify training needs for teams
Goals (KRAs) for Human Resource Manager
|New Customer Acquisition||Formulate organization’s staffing strategies for current and future demands.||– Hiring and onboarding of Sales team for Mid-west region by end of Q1
|Identify Talent Development Needs||– Setup of product training programs for sales team members
– Build training calendar for Inside Sales team and finalization of training budgets by January
|Implement cost savings and improve profitability by 4%||Select and audits vendors of outsourced benefits programs||– Complete vendor negotiations for new benefit plan by October
– Development of communications package to implement the benefit plan
– Complete annual enrollment by 15 December
|People Development and engagement||Respond to common employee problems and concerns||– Develop an employee feedback program
– Run employee engagement surveys on a monthly basis
– Include employees in performance reviews
|Introduce a climate that rewards excellent group and individual performance.||– Design a new performance management process for end of year performance reviews
– Implement a 360 Review for leadership team
Goals (KRAs) for IT Manager
|New Customer Acquisition||Perform all procurement, development and delivery phases for technology products||– Finalization and selection of new CRM system
– Migration of old sales and customer data to new system
|Provide training to users on new applications||– Setup of training programs for sales team. Travel to sales locations and trainings and usage of system. Completed by Q1 and to be run quarterly for new sales hires.|
|People Development and engagement||Perform all procurement, development and delivery phases for technology products||– Identification of benefit enrollment product and implementation by 01 December
– Development or procurement of engagement survey product
– Evaluation of new performance management product, implementation and rollout by November
|Implement cost savings and improve profitability by 4%||Design standardized procedures for IT service operations||– Outsource system maintenance to external vendors. Complete analysis by February and implement outsourcing agreements by July.
– Build cloud migration strategy by July
As can be seen above, the same set of Organization KPIs are applicable to each job description but the goals vary based on the role of employee.
Linking SMART goals to job description based KRAs and the organization KPIs helps employees to be aligned to organization needs. Using well defined job descriptions helps managers setup a goal setting process that not only maps to what employees do in their job but also to the organization requirements.