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Key result areas (KRAs)

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What is a key result area?

Key result areas (KRAs) are specific, critical domains of an employee’s job or a business process that are essential to achieving the overall objectives and success of an organisation. KRAs outline what is expected from a role or a function in clear terms, providing focus for performance measurement and professional growth.

Key takeaways

1
Focused performance metric
KRAs identify the most critical areas where outcomes must be achieved for a role or department to contribute effectively to the organisation’s mission.
2
Clarity of responsibility
Each KRA is linked to a set of tasks or responsibilities, making it clear what an employee or team is accountable for.
3
Alignment with strategy
KRAs align individual or departmental efforts with broader organisational goals, ensuring that every role adds value to the overall success.

4
Basis for appraisal

They serve as a foundation for monitoring performance, setting targets, and conducting appraisals.

Why key result areas matter?

KRAs simplify performance management by providing clarity and focus to both employees and managers. By zeroing in on the most crucial outputs, KRAs help teams align with the organisation’s priorities and ensure resources are directed towards the most impactful tasks. This alignment not only increases productivity and motivation but also aids in transparent and fair performance evaluation.

The KRA setting process

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1
Role analysis

Identify the core responsibilities of the job or function.

2
Stakeholder consultation

Managers and employees discuss expectations in alignment with organisational goals.

3
KRA definition

Clearly define 3-7 key areas that will be central to performance, focusing on outcomes rather than just tasks.

4
Documentation

KRAs are documented in job descriptions or performance management systems.

5
Periodic review

Regularly revisit and update KRAs based on changing objectives or role requirements.

Impact on performance management

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KRAs are directly linked to the performance appraisal process. They provide measurable criteria against which actual results can be compared, making evaluations objective and transparent. Well-defined KRAs also help in identifying skill gaps, training needs, and areas for professional development.

Impact on financial statements

Real-world examples

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Case study: Sales manager

 

A sales manager’s KRAs might include:

 

Achieving quarterly sales targets

Expanding the customer base by a specified percentage

Maintaining customer satisfaction scores above a set threshold

Ensuring timely reporting and data accuracy

Frequently asked questions about key result areas?

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KRAs define broad outcome areas for a role, while KPIs are the specific, quantifiable metrics used to measure success within those areas.
Focusing on a select few (usually 3-7) ensures that attention and effort are targeted on the highest-value activities, thereby reducing the dilution of responsibilities.
KRAs should be revisited regularly—at least annually or whenever there is a significant change in role or organisational priorities—to ensure continued relevance and alignment.