Dear Sankar,
As you are already aware, KRA stands for Key Result Area. I feel that what (Cite Contribution) has done, and that too very efficiently and excellently, is KPA of HR Executive (Key Performance Areas) which has to be agreed upon by all concerned.
Actually, in the true sense, KRA is a concept that is usually very difficult to implement. I will try to explain how it works.
First, the Board of Directors (BOD) decides upon the objectives of the company and sets a period-specific target.
This target becomes the KRA of the CEO.
Then it gets divided until it reaches the bottom-most rung.
The KRA of each person is linked, and fulfillment of KRA will lead to the fulfillment of the objective set by BOD. Hence, if one person fails, it will hamper the attainment of the desired result.
Let me give you an example:
The company sells PCs.
Suppose the objective decided by the Board is to make a profit of 500 crores in 3 years.
The KRA of the CEO is to attain a 500 crore profit in 3 years.
The CEO decides to attain this by making 400 crores by selling PCs, 50 crores by investing in stocks, and 50 crores by improving the productive cycle.
Now, the KRA of the Chief Marketing Officer will be to sell PCs that will give the company a 400 crore profit in 3 years. He will then set the KRAs for his subordinates in such a way that this target is achieved.
The Chief Operating Officer has KRA of improving the productivity cycle and producing PCs by which 400 crores can be achieved.
The Chief Finance Officer will, as KRA, have to look after investing in stock and providing finance for the purchase of raw materials, machinery, and others so that both operation and marketing can achieve their KRAs.
Chief People Officer (HR) [Generally, KRAs are difficult or not done for HR since they are essentially a support function, but in some cases, it is done]
CPO, as his KRA, will have the following tasks: provide manpower and maintain harmonious industrial relationships so that there is no disruption in production or marketing, provide training to improve skills to attain a better productivity cycle, and frame a compensation benefit structure by which efficient employees can be retained.
The chiefs then divide the KRA further to their subordinates. For example, the KRA of the Manager (Training) under CPO will be to provide adequate training to the workforce. Hence, if the Manager (Training) fails, that will be reflected in the KRA of both CPO and COO and CEO. Similarly, if the KRA of the Assistant Manager (Training) is to locate the training institutes that can impart quality training and he is not able to achieve it, this will reflect in the KRA of Manager (Training), CPO, COO, and CEO.
Suppose, if the Deputy Manager (Training) is supposed to conduct the training programs, which could not be carried out since the funds for training that were supposed to be arranged by the Deputy Manager (Finance) could not be arranged. Now, you can see this failure will reflect in the KRA of Deputy Manager (Finance), Manager (Finance), CFO, Deputy Manager (Training), Manager (Training), and CPO, COO, and CEO.
Hope I have not confused you.
Kind Regards,
SC