Purchasing KRA
Purchasing KRA include KRAs (can apply for KPIs management)
1. Outsourcing strategy / development / management
2. Zero production losses due to material shortages.
3. Timely delivery of goods at the respective sites.
4. Stock audit to ensure reconciliation of physical stocks.
5. Developing & negotiating with suppliers for obtaining timely procurement of materials at favourable commercial items.
6. Assessment of performance of the vendors.
7. Logistics operations.
8. Introducing innovative initiatives in operations.
9. Reduce on-hand inventory to the lowest feasible levels consistent with customer service objectives.
10. Reduce materials costs to the lowest levels consistent with quality objectives. Cost saving budgeting and targeting.
11. Purchasing policy and planning.
12. Development & implementation of key procurement strategies.
13. Formulating budget for timely procurement of spares & materials.
14. Develop statistical methods to estimate future materials requirements.
15. Assessing project material requirements and designing purchase schedule.
Categories: Compensation and Benefits, Performance management, Types of KRAs Tags: Purchasing KRA
Management KRA
Management KRA include KRAs for general management level : –
1. Board of Directors relationship
2. Productivity
3. Financial Strategy
4. Business Development
5. Technology management
6. Internal operations.
7. Market development
8. Profitability
9. Organizational structure
10. Community relations
11. Regulatory compliance
12. Assets & Liability management
13. Customer satisfaction
Categories: Compensation and Benefits, Performance management, Types of KRAs Tags: Management KRA
Training KRAs
Training KRAs can include: (can apply for KPIs management)
1. Identify causes of delays in conducting training and reduce it by 3%
2. Take training in the areas of
a)…………. and
b) to upgrade the latest developments in these areas by July’2010.
It may include subject knowledge, communication skills, computer skills,
3. The feedback from participants on Program ABC to be improved from 75% Very Good rating to 85% very good rating.
4. Feedback on Effectiveness of training conducted 3 months ago to be take from superiors of the participants to understand usefulness and improvement areas.
6. Conduct Training of 5 batches of ………… by Jun 2010.
7. Prepare method for calculating cost of training by 10th Dec. Take KRA to reduce this by 7% by the end of next quarter.
5. Develop training module content in the area of ………….. by May 2010.
Key Result Areas
1. Definition of Key Result Areas (KRA)
“Key Result Areas” or KRAs refer to general areas of outputs or outcomes for which the department’s role is responsible.
Key Result Area in simple Terms may be defined as Primary responsibilities of an Individual, the core area which each person is accountable.
2. Importance of KRAs.
• Set goals and objectives
• Prioritize their activities, and therefore improve their time/work management
• Make value-added decisions
• Clarify roles of department or individual
• Focus on results rather than activities
• Align their roles to the organization’s business or strategic plan
• Communicate their role’s purposes to others
3. Conditions of KRAs
• Key result areas (KRAs) capture about 80% of the department’s work role. The remainders are usually devoted to areas of shared responsibility.
• Each KRA should capture at least 5 % of work role
4. Types of KRAs:
• Training KRAs
• Management KRA
• Purchasing KRA
• RD KRA
• Administration KRA
• Finance KRA
• HR KRA
• Manufacturing KRA
• Quality KRA
• Marketing KRA
• Sales KRA
• Key result areas
Categories: Compensation and Benefits, Performance Appraisal Methods, Performance management Tags: Key Result Areas
Key Performance Indicator (KPI) Examples
I. Characteristics of KPI
KPI is a term specifically used to indicate criteria adopted in evaluating the employee’s performance. Following are some characteristics of KPI:
1. A KPI must be aligned with the organization’s objectives;
2. A KPI is determined by management personnel (normally human resource managers);
3. A KPI must be designed so that it is easy to understand;
4. Some KPIs are specifically designed for each employee;
5. KPIs are expected performance by the organization;
6. KPIs must be designed to balance the evaluation of each employee;
7. KPIs lose their accuracy over time; therefore, it is necessary to revise KPIs periodically.
II. Requirements of a KPI:
An effective KPI should be:
1. Specific;
2. Measureable;
3. Achievable;
4. Performance relevant;
5. Containing deadline requirement.
III. How to design a KPI?
1. Design Key Result Areas (KRAs) and the importance of each KRA;
2. Identify necessary procedures to perform each KRA;
3. Identify the measurement criteria for each KRA and evaluate the importance of each criterion;
4. Summarize the criteria and the importance of each criterion;
5. Develop a summary table of KPIs.
Click Here To Download Key Performance Indicator (KPI) Examples
Categories: Compensation and Benefits, KRAs & KPIs, Performance management Tags: KPI
Behavioral Observation Scales
Behavioral Observation Scales
1. Definition of Behavioral Observation Scales (BOS)
• Behavioral Observation Scales is frequency rating of critical incidents that worker has performed.
• The BOS was developed by Latham & Wexley (1977) who believed that both graphic rating scales and BARS require supervisors to make vague judgments.
• The BOS is a list of critical incidents behaviors which the supervisor has to rate in terms of frequency.
2. Rating scales
We use 5 scales as follows to identify frequency of behavior.
• Never
• Seldom
• Sometimes
• Generally
• Always
3. Identification of critical incidents
Items indicate either desired or undesired aspects of work performance, for examples :
• Worker misses workdays ________
• Worker never needs her/his work to be double checked _______
Forced Ranking (Forced Distribution)
Forced ranking method in performance appraisal
1. Definition of forced ranking (forced distribution)
Forced ranking is a method of performance appraisal to rank employee but in order of forced distribution.
For example, the distribution requested with 10 or 20 percent in the top category, 70 or 80 percent in the middle, and 10 percent in the bottom.
The top-ranked employees are considered “high-potential” employees and are often targeted for a more rapid career and leadership development programs.
In contrast, those ranked at the bottom are denied bonuses and pay increases. They may be given a probationary period to improve their performance.
2. Application of Forced Ranking
GE, Ford Motor, Conoco, Sun Microsystems, Cisco Systems, EDS, Enron and a host of other U.S. corporations have adopted similar policies of this method
3. Advantages and disadvantages of forced Ranking
Advantages:
• They force reluctant managers to make difficult decisions and identify the most and least talented members of the work group.
• They create and sustain a high performance culture in which the workforce continuously improves.
Disadvantages
• They increase unhealthy cut-throat competitiveness;
• They discourage collaboration and teamwork;
• They harm morale;
• They are legally suspect giving rise to age discrimination cases.
Categories: Compensation and Benefits, Performance Appraisal Methods, Performance management Tags:
Management By Objectives (MBO)
1. Definition of Management By Objectives (MBO)
• MBO is a process in which managers / employees set objectives for the employee, periodically evaluate the performance, and reward according to the result.
• MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished (methods).
2. Classification of Objectives
• Corporate objectives
• Functional objectives
• Individual objectives
3. Conditions of Management By Objectives
An objective must be satisfied SMART conditions:
• Specific,
• Measurable,
• Achievable,
• Relevant, and
• Time-Specific.
4. Advantages of MBO
• It is based on the assumption that the individual (employee) knows more than anyone else about her/his own capabilities, needs, strengths, weaknesses and goals.
• A further advantage of MBO is that the emphasis is on the future rather than on the past. Appraisal thus becomes a means to a constructive end.
Categories: Compensation and Benefits, Performance Appraisal Methods, Performance management Tags: Management, MBO, Objectives
Performance Ranking
Performance ranking method in performance appraisal
1. Definition of performance ranking method
Ranking is a performance appraisal method that is used to evaluate employee performance from best to worst.
Manager will compare an employee to another employee, rather than comparing each one to a standard measurement.
2. Rating scale of ranking
• Much better – 5 points
• Slightly better – 4 points
• Equal – 3 points
• Slightly worst – 2 points
• Much worst – 1 point
3. Process of ranking
• The scaled comparison asks a rater or evaluator to compare the performance of two individuals.
• Continue comparison to other two employees.
• Total points to each employee.
• Give point to employee, for example: A is Slightly better – 4 points so that B is Slightly worst – 2 points.