Many abbreviations are used in the business world. They can be confusing, but it’s important to understand them. Two of these are KPI and KRA. They come up a lot during discussions on job roles, hiring and appraisals.

To understand KPI vs KRA, let’s first define them. KPI stands for key performance indicators, while KRA stands for key results area.  

 The difference between KRA and KPI is in what they measure. KPIs measure how a system is functioning, while KRAs measure the results from certain actions within a system.

The similarity is that both are metrics used to measure the performance of a company or system.

To be clear about what is KRA and what is KPI, let’s take a closer look.

 

  1. What Is KPI?

  2. What Is KRA?

  3. KRA And KPI Examples

  4. KPI Vs KRA 

What Is KPI?

KPIs are used to monitor the performance of a system. They may be measured by looking at whether a target number was met. KPIs can also show if there were setbacks during the performance period. 

KPIs are used to ensure the good performance of systems. They’re tools that analyze and measure how well an entity is performing, how fast it responds to calls, payment transactions and other major events. 

What Is KRA?

If we look at the difference between KRA and KPI, the KRA of employees is created with different goals in mind than the KPI. A KRA is used for evaluation and planning of an outcome. KRA of employees can also be used to measure if there were setbacks during the time period.

A good way to understand “what is KRA?” is that it doesn’t necessarily have a goal in mind, as KPIs do.  

KRA And KPI Examples

 

A KRA can be measured with any results-based indicator. These are sometimes used to measure the success of an action or goal. Here’s an example:

Samaira is a salesperson with a goal of increasing sales to over one million dollars within the year. Her KRA may be ‘Add two active leads per week’. This metric may be used to measure her performance, and they may also compare the performance to other salespeople within the organization. This KRA can measure how successful those additional two active leads per week are and whether they’ll be sufficient to meet her goal.

Here’s another one of KRA vs KPI examples. Say an organization has a KPI of ‘average response to calls from customers within 3 minutes’. It may use this to measure how quickly they respond to customer demands and whether or not they fulfill what’s required of them. They may use this KPI to compare themselves to other firms. If they’re able to respond within three minutes not only is it good performance, but it also shows they do not have issues with any sort of delays or processing problems. The KRA of employees in this situation might be, ‘Customer tickets closed within two minutes’.

It’s easier to understand the difference between KRA and KPI using KRA and KPI examples.

KPI Vs KRA

 

If we compare KRA vs KPI examples, we can see they measure different goals and ways of evaluating the results. To recap: 

  • A key result area is simply a measure of performance
  • A key performance indicator is used to measure performance but also to track progress
  • Another difference between the two is that a KPI is more a process measurement, while a KRA is more a value-driven measurement
  • The KRA measures the result of an action that can be taken, and its value towards achieving a specific goal or target
  • KPIs are used to measure systems and entities, while KRAs are used to measure specific actions directly related to the entity being measured

There are many differences between a KPI vs KRA. But at the end of the day, both help monitor progress. Sometimes KPIs and KRAs might be used alongside each other to gather data that can then allow for a better analysis.

 

KPI vs KRA is a core management concept that leadership needs to understand deeply. With Harappa’s First Time Manager Program, young leaders will gain the knowledge and understanding to steer teams and the organization toward their goals. Building strong teams, keeping lines of communication open and managing conflict are some of the areas they’ll master with the help of our nudge-rich content packed with the knowledge they can use.

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