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Difference between KPI and KRA

Every organization has a vision, mission and a set of objectives. The set of objectives are short-term goals which must be fulfilled within the given time frame. In order to determine whether the strategies made by the organization to achieve its objectives taking the company in the right direction or not a company uses dedicated metrics. KRA and KPI are two such metrics. The relationship between KPI and KRA is that objectives are designed using KRAs and their realization is measured by KPIs. Let us see how KRA differs from KPI!

KPI:

KPI, which stands for Key Performance Indicator, is a high-level measure or metric used to evaluate the progress and achievement of the specific objective. In other words, for each objective, a dedicated KPI is set at the beginning of the performance period. During or at the end of the performance period by evaluating the KPI one can decide whether the organization is making progress towards achieving that objective or not.

After finalizing the organization's mission and determination of its goals and objective the progress towards a specific goal or objective is evaluated through key performance indicator. The KPIs are used at different levels to track the progress of the firm in meeting the targets. It works like a compass that helps the company understand that whether it has chosen the right way to achieve its goals or not.

Different organizations have different KPIs, e.g. KPI of a business entity can be the percentage increase in profit; KPI of a school may be the pass out rate of the students, etc. Thus a KRA may include profit, turnover, customer base, customer attrition, etc.

KRA:

KRA, which stands for Key Result Area, refers to the fundamental areas of the outcome, for which a department or employee is accountable. It implies the metrics set by the organization for a specific role. Each employee or department has a number of KRAs which are key areas in which the employee or department is supposed to produce results. For example, for an HR manager or HR department recruitment can be one of the key result areas. The companies define a set of KRAs for each role or department in the company so that employees can have a clear understanding of areas they need to focus and produce results.

Furthermore, KRA highlights the job descriptions of a job profile and helps employees understand the role and responsibilities in a better way and align their efforts with the goals of the firm.

Based on the above information, some of the key differences between KPI and KRA are as follows:

Key Performance Indicator Key Result Area
KPI is a performance metric that helps evaluate the progress or achievement of a specific objective. It is the fundamental area of outcome for which an employee or department is responsible.
It is a metric that gauges the level to which the business objective or goal is achieved. It is a metric that defines the areas in which the employees are responsible to produce the results.
It is a quantifiable measure or metric, meaning it gauges the performance of a product, service etc., in the market. It is a qualitative measure or metric as it defines the areas that can help in achieving the objectives of the organization.
It measures how successfully an organization achieves goals at various levels. It helps find out the scope of a particular job or product.
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