The Importance of KRA’s: Expectations and How to Set Them Right


The KRA i.e. The “Key Result Area” is a well known official term. The KRA removes any ambiguity from the employee’s mind about what exactly is expected from him. With proper communication and implementation, it can boost his performance to the extent that surprisingly great output can be delivered by the employee. The performance of the employee can be tracked and he can be led to gain new skills which are imperative for the next level. Thus, it results in the development and growth of both the employee and the organization.

The key stages of setting up and implementing the KRA successfully are:

Setting the KRA

Not only Management, but the employee and the department head should also be actively involved in setting up the KRA. Especially, in case of new joiners, proper guidance should be given on how the KRA is different from the job description. Depending upon the importance of the KRA for the role, its duration should be clearly identified. At times, the KRA may not be the same every year and will depend upon the role and organizational requirements.  At times, the KRA can span over six months and then a new KRA would be allocated to the employee. For example, for the development of a software module, the KRA should follow top – down approach by cascading organization goals down the hierarchy of employees. After finalizing organizational revenue / profit targets based on internal & external factors, same can be cascaded down the sales / operations hierarchy i.e. CEO / COO / VP / GM / Manager / Assistant Manager / Executive. Similarly, other qualitative aspects can be cascaded down such as the number of invoices to be raised in a day by accounts receivables team, number of training mandays conducted by the training team, etc.

Aspects of the KRA

The KRA should be defined such that the employee, the team, and the organisation, all are equally inspired to inculcate and appreciate team work. The KRA should be defined while keeping in mind the employee’s experience, potential and his growth avenues. Another important aspect is not to forget the role in a team while assigning an individual KRA. Moreover, the KRA should coincide with the organization’s goals and objectives to ensure a high level of efficiency.

Communicating the KRA

The KRA should not be simply emailed or handed over to the employee. It should be extensively discussed and explained at the KRA Setting Meeting and should be understood, mutually agreed upon and duly acknowledged by the employee and the supervisor. Employees who have recently joined the organization should be given the KRAs at the time of joining. Existing employees should be given the KRA during same time every year such as beginning of the financial year, so that they get a complete time frame to perform.

Monitoring the KRA

To successfully and fairly evaluate the performance of each individual and his team, an effective and transparent system should be set up. This system should be visible to all employees. It should be set up in such a manner that the employee can clearly make out his performance till date. Performance of Company / Area / City / Unit should be regularly communicated, perhaps monthly, to all employees.

Review Meetings

It is necessary to organize meetings to review the performance of an employee. Future decisions should be taken after duly considering the performance and carefully deliberating upon the employee’s potential. The frequency and timing of the review meetings should be pre-decided so that the employee is aware about it and can come up with his concerns / queries. KRAs which have target date of less than a year, should be reviewed and rated in such meetings.


At times, due to some internal or external factors, the achievement of the KRA might not be possible. In such a situation, the details should be discussed then and there instead of waiting for the year to end. If need be, targets should be revised or a new KRA should be set.

Evaluation of the KRA

Periodic collation of data and documents should happen without fail. The precise evaluation and discussion of the KRA should initially take place between the employee and the supervisor and later with the HR and the Management subsequently. The criteria of evaluation should be such that the employees get a fair chance for evaluation based on their achievement. For example, there can be various slabs such as Very Good, Good, Fair, Satisfactory, Poor.


The KRAs achievement should be linked with monetary and non-monetary rewards in a result-oriented way to motivate and inspire the employee to perform optimally. Such rewards should be paid or distributed as per the timelines committed to the employees. Employees should be confident of the seriousness of the organization.


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