Writing SMART Goals (Also Called KRAs) From Job Descriptions

Many Managers (Including HR managers responsible for writing others Goals) often ask to help them oncreating Goals (Key Responsibility Areas) for different designations, which they can use for setting Goals and/or conducting performance appraisals. While most of these managers are completely aware of their job profile, they find it difficult to shape it in a written form.

Knowing your Goals and writing them effectively is an all-together different game. To describe your Goals (KRAs) you need to have effective writing skills and sound knowledge of terminology. Unfortunately, some executives/ managers may not have a flair for writing and thus unable to write their Goals (KRAs). This is true for HR also. So here are some tips that will help Talent Junction users to write Goals (KRAs) from the Job Descriptions.

SMART: A Smart Goal (KRA) is one which is:

1. Specific : Clearly stated what to do and how to do?
2. Measurable: States how the performance for this goal will be measured.
3. Achievable: It can be achieved by employees if they work really hard (You can draw this conclusion by talking to employee, manager or someone who has done this job successfully).
4. Relevant: The KRA (Goal) is relevant to the job and the performance on this goal will improve productivity of the employee.
5. Time Frame: States a time frame to achieve the goals.

How to WRITE SMART Goals (KRAs)?

Here are the steps how anyone can write Goals (KRAs) from Job Descriptions:

1. Go through employee’s Job Description. If Job Description is not updated talk to employee and his/her Manager or many be manager’s manager also.
2. Try to find out exactly what the employee is supposed to achieve.
3. Based on your reading and discussions, make a list of the functions and responsibilities which are critical to the employee’s job.
4. Categorize these critical functions and responsibilities in two categories:
   • A : Which can be measured whether in numbers or percentages or yes/no.
   • B : Which cannot be measured in numbers and cannot be calculated.
5. ‘A’s are the one which can be be converted to Goals (KRAs).
6. Make a list of all critical functions.
7. Write a self explanatory (1 sentence ) definition of each Goal (KRA).
8. If you plan to follow BSC (Balanced Score Card) Pattern, then categorize each goal into one of the following categories: Customer, Financial, Internal Business Process, Learning and Growth.
9. There after describe each Goal (KRA). Make sure you mention a measurable target to be achieved and time frame for achievement of the Goal (KRA).

An Example

I picked up job description of a Sales Manager in a company and here are the functions mentioned in the JD.

Functions of a Sales Manager:

• Develops a business plan and sales strategy for the market that ensures attainment of company sales goals and profitability.
• Responsible for the performance and development of the Account Executives.
• Prepares action plans by individuals as well as by team for effective search of sales leads and prospects.
• Initiates and coordinates development of action plans to penetrate new markets.
• Assists in the development and implementation of marketing plans as needed.
• Conducts one-on-one review with all Account Executives to build more effective communications, to understand training and development needs, and to provide insight for the improvement of Account Executive’s sales and activity performance.
• Provides timely feedback to senior management regarding performance.
• Provides timely, accurate, competitive pricing on all completed prospect applications submitted for pricing and approval, while striving to maintain maximum profit margin.
• Maintains accurate records of all pricings, sales, and activity reports submitted by Account Executives.
• Creates and conducts proposal presentations and RFP responses.
• Assists Account Executives in preparation of proposals and presentations.
• Controls expenses to meet budget guidelines.
• Adheres to all company policies, procedures and business ethics codes and ensures that they are communicated and implemented within the team.
• Recruits, tests, and hires Account Executives based on criteria agreed upon by senior management.

After going through the above list I identified the following six functions (actually there can be around 10 but for convenience I chose only 6) that are critical to a Sales Manager’s job and can be measured quantitatively:

Critical Measurable Functions of a Sales manager

1. Improvement in Financial Performance of Account Executives
2. Development of Sales Action Plans
3. Reporting to Management about Performance of Sales Team
4. Negotiates with prospective customers in order to maximize the profits
5. Create and conducts proposal presentations and presentations
6. Adhere to company policies.

Writing Goals (KRAs) for Critical Functions:

Here are the KRA (/Goals) based on above functions. First I wrote the definition for the KRA and then gave a description along with measure and time line.

Goal Definition	Goal Description
Improves Financial Performance of Account Executives	To ensure that all sales executive under him meets/exceed the sales targets provided to them. Track the performance of sales and guides the salesmen to improve their skills to ensure more sales.  Target: US$ 500,000 per quarter for the whole team.
Development of Sales Action Plans	Conducts market research and develops solid sales plans. Sales plan must be reported every quarter to management team for analysis and approval.  Target: Renew and Renovate the Plan every quarter. Target: Conduct 2 Sales Training per month.
Reporting to Management about Performance of Sales Team	Create and send the monthly reports with accuracy and time to management. Reports should clearly indicate the strengths and weaknesses of the sales team.  Target: Complete Reports to be send by 7thof Every Month.
Negotiates with prospective customers in order to maximize the profits	Sales manager should ensure that all salesmen are pitching most competitive and profitable rates to the clients.  Target: Average Selling Price: US$ 10,000 or above
Create and conducts proposal presentations and presentations	Reply to Request for Proposals, Tender Notices, and Price Quotations in Time.  Target: All Proposals to be submitted to management for review 2 days prior and to customer as on date.
Collections of Due Revenues	Sales Manager should assist the Accounts Receivables manager in collecting all due invoices in time. He/She should ensure that customer has accepted the delivery of the product and the Invoice.  Target: 80% of the due invoices to be collected within 30 days/ ad agreed in Purchase Order.
Adhere to company policies and procedures	Ensure that all teams members attend the weekly sales meet and present their report.  Target: 90% attendance in Sales Meetings.

 

Purchase 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.

 

Finance KRA

Finance and Accounting KRAs include KRAs (can apply for KPIs management)

1. Cost control

2. Internal audit

3. Regulatory reporting

4. Credit control

5. Financial records

6. Payroll

7. Cash flow forecasting

8. Budgeting

9. Costing

10. Capital expenditure

11. Financial analysis

12. Credit referencing

13. Management information

 

Manufacturing KRA

Manufacturing KRAs include KRAs (can apply for KPIs management):

1. Customer Satisfaction

2. Good working conditions

3. Product development.

4. Preventive maintenance

5. Delivery management:

• Minimize downtime and
• Meet annual production target as per expected cycle time.

6. Resource Utilization

• Maximizing quality of product, efficiency of production and maximize production rates.
• Compliance of corporate policy norms.
• Maximize plant efficiency through teamwork and innovation

7. Operational costs.

• Minimize the scarp level/wastage reduction.
• Control overhead expenditure.
• Stock Control.
• Reduction in operating costs.
• Minimize the inventory levels.

8. Implementation of quality control programs

• Apply newer management techniques such as ISO, TQM, Six Sigma, etc.
• Application and acceptance of new technology.
• Shop floor improvements.

9. Productivity: Improvement of process.

10. Record Keeping.

 

Quality KRAs

Quality KRAs include KRAs (can apply for KPIs management)

1. Develop and implement quality management strategy and plans.

2. Validation of process, instruments, methods, etc.

3. Quality assurance for the projects and the manufacturing set up.

4. Evaluation of new suppliers and vendors.

5. Minimization of rejection & rework.

6. Customer’s acceptance include: establish quality standards & implementing quality control requirements of the customers and handle complaint.

7. Standardization for goods and work inspection.

 

Marketing KRA

Marketing KRAs include KRAs (can apply for KPIs management):

1. Market research

2. Marketing materials

3. Media relations

4. Sales support

5. Agency relations

6. Advertising

7. Pricing

8. Field support

8. Promotional strategy.

 

Sales KRA

Sales KRA include components as follows (can apply for KPIs management):

1. Budget preparation / sales expenditure.

2. New Business Acquisition

3. Net sales

4. Gross Contribution

5. Key Account Management

6. Territory Management

7. Customer Relationship Management

8. Sales forecasting. Market research.

9. Building client relationship

10. Consultative Selling

11. Agency Relations.

12. Product Management

13. Sales Planning

 

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.
KRA’s is an acronym for ‘Key Results Area’.Having clearly defined Key Results Areas enables you to take ownership of your job and toaccept responsibility for those areas in which achieving results are your responsibility.Key Results Areas enable you to:•Have clearly defined and achievable goals.•Measure your progress during the year in terms of identified targets.•Manage your skills development.•Identify areas for development (skills gaps which exist).•Obtain timely feedback that will allow you to change direction when needed.•Promote an environment of self-management.

Why KRAs?

• To have clearly defined and achievable goals.
• To measure and communicate your progress during the year in terms of identified targets.
• To manage your skills development. Identify areas for development.
• To contribute to the company’s wealth creation.
• To obtain timely communications and feedback that will allow you to stay aligned and change direction when needed.
• To promote an environment of alignment and self-management.

So the importance of KRA is to

• 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

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

“Writing SMART Goals (also called KRAs) from Job Descriptions”

Here are 9 steps suggested by Go through employee’s Job Description. If Job Description is not updated talk to employee and his/her Manager or may be manager’s manager also.

1. Try to find out exactly what the employee is supposed to achieve.
2. Based on your reading and discussions, make a list of the functions and responsibilities which are critical to the employee’s job.
3. Categorize these critical functions and responsibilities in two categories:
   1.     i.            (4.1) Which can be measured whether in numbers or percentages or yes/no.
   2.   ii.            (4.2) Which cannot be measured in numbers and cannot be calculated.
4. Ones in 4.1 are the ones that can be converted to Goals (KRAs).
5. Make a list of all critical functions.
6. Write a self-explanatory (1 sentence) definition of each Goal (KRA).
7. If you plan to follow BSC (Balanced Score Card) Pattern, then categorize each goal into one of the following categories: Customer, Financial, Internal Business Process, Learning and Growth.
8. There after describe each Goal (KRA). Make sure you mention a measurable target to be achieved and time frame for achievement of the Goal (KRA).

Key Performance Areas [KPA]

When the key results area is large, it is broken into manageable areas formanaging/ evaluation. These sub-sections of KRAs are called KPA

For example

KRA = Recruitment / Selection

KPA 1= Recruitment

KPA 2 = Selection

Key Performance Indicators [KPI]

To manage each KRA/ KPAs, a set of KPIs are set.A key performance indicator is a financial and non-financial measure used to measureprogress towards a stated organizational goal or objective (KPA / KRA).

The benefits of measuring Key Performance Indicators

• It can be a very quick way of seeing the actual performance of a goal or strategic objective.

• Decisions can be made much quicker when there are accurate and visible measures to backthem up.

• Can allow management to see the company or department performance in one place.

• A team can work together to a common set of measurable goals.Characteristics of KPI

• KPI is always connected with the corporate goals.

• A KPI is decided by the middle or top management.

• It belongs to an individual who is accountable for its outcome.

• A KPI leads to action.• Few in number.

• They are indicators of performance desired by the organization.

• Easy to understand.• It should be balanced not undermine each other.

• Users can gauge their progress overtime.

• KPI’s loses its value overtime so they must be periodically reviewed and refreshed.

Difference between KRA and KPI

Each role in a company generally has a number of KRAs, which define the key areas that the employee needs to produce results in (for example, for a HR Manager, one of the Key Result Areas might be Recruitment). Typically organisations like to define a set of KRA’s for each role in an company, so that everybody’s clear on the exact areas that the role is responsible for, and the incumbent is clear where they need to focus their attention.

KPI stands for Key Performance Indicator – KPIs describe the indicators of performance or success for an employee. Again, using the example of the HR Manager who has Recruitment as one of their KRA’s, a typical KPI for this HR Manager might be “Recruitment of Level 1 Positions within 3 months of notified vacancy and within 90% of budget”.

Many companies have slight variations on this theme, and sometimes KPI’s/KRA’s get mixed up and combined. Which is not always a major problem; as long as in the end, people understand what their job are (KRA’s) and what results they need to deliver (KPI’s)

Difference between JD and KRA’s –

JD stands for Job Description – It will give the broad description or picture of any job.

KRA’s- It is very specific to organization short term and present goal.

 

 

 

Research development KRA

1. Plan and estimate development activities. Hold reviews to validate designs & analysis.

2. Working out on budget (manpower andmachineries required for department).

3. Cost analysis.

4. Minimize purchasing costs.

5. New Product development & Testing.

6. Value engineering & innovative solutions

7. Analysis of customer requirements.

8. Coordinate with the factory and suppliers for product development.

9. Preparation of SOP’s. Authorize all documents for development of new product. Preparation of technical documentation and resolve product problems.

10. Define specifications of all the instruments & research materials for conducting the experiments.

11. Evaluate competitors offerings technically & commercially.

 

Human resources KRAs

1. Recruitment & Selection

• Reduce Average time taken to fill vacancies
• Reduce Average cost per recruitment
• Finalize selection in 5 weeks for each individual position
• Workplace accidents
• Reduce workplace accidents

2. Building capabilities and organizing learning

• Training
• All workforces below middle management should receive a minimum of 4 days training.
• Maximize induction training. Maximize training workshops
• Employees Development
• Training needs analysis & Competencies development.

3. Performance Management

• Performance Appraisal
• Managing Employees through KRAs
• Achieve 100% performance appraisals against total employees.

4. Monitoring employee deployment

5. Compensation and benefits.

6. Employee Relations

7. Statutory Compliance

8. Reward Management

9. Effective HR management systems, support & monitoring

10. Workplace Management

• Reduction in absenteeism per employees
• Increase in employee satisfaction
• Talent retention and turnover ratio.
• Reduce the labor turnover
• Benchmark total HR costs externally.