Kra 2

NAWBO-LA PEAK LEADERSHIP ACADEMY

Session 4

Lack of Goal Congruency

Individual’s Needs/Goals

Company or Departmental Needs/Goals

Session 4

Goal Congruency

Individual’s Needs/Goals

Company or Departmental Needs/Goals

Session 4

Levels of Organizational Control

Core Control

The Environment

Session 4

Elements of the Performance Management System

Session 4

Elements of Core Control Systems

• Key Result Areas (From corporate or department plans or individual role descriptions)

• Objectives (From corporate or department plans or individual role descriptions)

• Goals (From corporate, department, or individual plans)

• Measurement

• Progress Review

• Performance Evaluation

• Rewards

Session 4

Key Result Areas

• Areas of performance which are essential to the company’s, department’s or individual position-holder’s success.

• Nine KRAs is considered the maximum number

Session 4

Objectives

• Broad statements of what needs to be in achieved in each Key Result Area.

• For the company/department, objectives define “strategy” – results to be achieved over the longer term.

• For position-holders, objectives/activities define what needs to be achieved within each KRA.

• Not changed unless the strategy or structure of the organization changes.

Session 4

• Specific, measurable, time-dated performance targets to be achieved. Each objective will have one or more goals.

• Requirements for effective goals:– Limited in number– Realistic; something that can be attained– Stated in measurable terms– Expectation of success should not be 100%

Session 4

SMART Goals

S Specific Outcome

M Measurable

A Accountable and Achievable

R Results-Oriented and Realistic

T Time-Dated

Session 4

Performance Measures

• Methods and procedures used to evaluate performance

• Guidelines include:– A preference for objective tests

– If subjective means are used, several different measurements are suggested

Session 4

Measurement Methods

• Profit Measurement

• Monetary Measurement

• Non-monetary Measurement– Ratio: Numbers indicate the actual amounts of the

property being measured. Has an empirically meaningful 0.

– Interval: Numbers have quantitative significance – they represent distances between objects. The difference between a score of 8 and a score of 10 is the same as the difference between a score of 2 and 4.

– Ordinal: Numbers signify rank order, but have no arithmetic significance.

– Nominal: Numbers are “labels” intended for classification.

Session 4

Progress Review: Periodic Review of Progress Made Toward Goals

Regular, periodic feedback to each member of a manager’s team on performance against goals, tasks assigned, and on-going responsibilities.

Session 4

Performance Evaluation

A formal process of evaluation and feedback (based on established goals) from which adjustments in an individual employee’s performance can be made.

Session 4

Rewards

• Positive reinforcers for accomplishing appropriate, goal-directed behavior.

• Rewards need to be valued by people.

• Something not desired does not constitute a reward.

• Types of rewards– Intrinsic

– Extrinsic

Session 4

The Performance Management System

Strategy/Role

Description

• KRAs• Objectives

Results

PerformanceEvaluation/Appraisal

Measurement SystemRewards

Goals Behavior

Progress Review/

Feedback

Session 4

Operationalizing the Performance Management System – Individual Level

Session 4

What is a Key Result Area-Based Role Description?

• Designed to support corporate strategy by identifying specific areas where a position contributes to the achievement of the organization’s mission.

Session 4

MISSIONSTATEMENT

KEY RESULTAREAS

OBJECTIVES

ACTIONSTEPS

MISSIONSTATEMENT

KEY RESULTAREAS

OBJECTIVES

ACTIONSTEPS

MISSIONSTATEMENT

KEY RESULTAREAS

OBJECTIVES/ACTIVITIES

CALENDAREDACTION STEPS

MISSIONSTATEMENT

KEY RESULTAREAS

OBJECTIVES

ACTIONSTEPS

Organization BusinessUnit Department Individual/

Manager

Strategic Planning Waterfall

Session 4

What is a Key Result Area-Based Role Description?

• Communicates the dimensions of a position to current and potential holders of that position, as well as others within the organization.

• A guide for individual behavior.

• A tool that managers can use as input for hiring, training, and day-to-day supervision.

• Designed to support corporate strategy by identifying specific areas where a position contributes to the achievement of the organization’s mission.

Session 4

Role Description

Key Result Areas

Objectives/Activities

Action Steps

MissionBroad statement of why the position exists.

Categories of activities on which the position holder should focus to maximize success.

Broad statements of what should be focused upon in each category.

Results to be achieved within the next 12 months within each KRA.

Calendared activities to achieve each objective.

Position-Specific

Person-Specific

Session 4

What are the Components of the KRA Role Description?

• Date

• Department

• Title

• Mission

• Key Result Areas

• Time Allocations

• Objectives/Activities

• Position Requirements

• Authority

Session 4

Date, Department, Title

• When was the role description created or last updated?

• Where in the organization does this position reside?

• What do we call this position?

Session 4

Mission

• Why does this position exist in our organization?

• What is its basic purpose?

• How does it support the organization’s mission?

Session 4

Sample Mission Statement

Director of Marketing

To develop, implement, monitor and evaluate strategic marketing plans that enable our firm to profitably capture a dominant share of the market. To effectively and efficiently utilize the resources of the marketing team in meeting or exceeding customer requirements.

Session 4

Sample Mission Statement

Executive Assistant

To ensure that the executive’s needs are met in a smooth and timely manner. To serve as the executive’s liaison with customers and staff.

Session 4

What is a “Key Result Area”?

• An area where performance is critical to success.

• A “category” of activities.

• Expressed in one, two, or three words (e.g., People Development, Manufacturing Capability, Planning).

• Used in planning at the corporate, department, and individual level.

• There should be 5 to 9 Key Result Areas.

Session 4

Example KRAs

• Financial Performance

• Strategic Planning

• Organizational Development

• Shareholder and Public Relations

• Corporate Culture Management

• Board Relations

• Staff Development and Supervision

Company President

Session 4

Role Description Worksheet

KEY RESULT AREAS

1.2.3.4.5.6.7.

Time Utilization

Now Goal

Position Requirements:

Education/Experience:

Skills/Knowledge/Ability:

Authority:

Date:Department:Title:Mission:

Session 4

Objectives/Activities

• For each KRA, what are the specific activities that must be completed to fulfill the performance requirements of that area?

• Specific to the position vs. the individual.

• Ongoing responsibilities vs. time-dated goals.

• Expressed as an action (starts with a present tense action verb).

Session 4

Present Tense Action Verbs

• Oversees

• Analyzes

• Approves

• Authorizes

• Controls

• Coordinates

• Creates

• Designs

• Develops

• Ensures

• Negotiates

• Schedules

• Plans

• Decides

• Inspires

• Motivates

• Writes

• Edits

• Purchases

• Sells

• Participates

• Trains

• Coaches

• Hires

• Fires

• Serves

• Maintains

• Facilitates

• Initiates

• Implements

Session 4

Levels of Decision-Making

1. I have complete authority to decide and to act.

2. I have complete authority, but must notify someone else after I have decided.

3. I have complete authority, but must consult with someone else before I decide.

4. I need the prior approval of someone else before I decide.

5. Someone else must consult with me before deciding.

6. Someone else informs me of their decision.

Session 4

Example Objectives/Activities

• Word processes correspondence, manuscripts, reports and other documents.

• Transcribes CDs.

• Screens and handles telephone calls.

• Maintains filing system.

Administrative Support

Session 4

Example Individual Objectives/Activities

• Recruits, hires and fires direct reports

• Oversees the development and maintenance of role descriptions for direct reports

• Works with direct reports to establish their annual goals that support the corporate strategy

• Meets periodically with direct reports to review operations

• Monitors the performance of direct reports toward their annual goals

• Conducts annual formal performance reviews for direct reports

• Gives informal performance feedback periodically to direct reports

• Decides compensation for direct reports

• Coaches, develops and serves as a resource to direct reports

• Disciplines employees as appropriate

Supervision

Session 4

Role Description Worksheet

KEY RESULT AREA OBJECTIVES/ACTIVITIES1. _______________________ a. ______________________________

______________________________b. ______________________________

______________________________c. ______________________________

______________________________d. ______________________________

______________________________e. ______________________________

______________________________2. _______________________ a. ______________________________

______________________________b. ______________________________

______________________________c. ______________________________

______________________________d. ______________________________

______________________________e. ____________________________________________________________

Session 4

Sample Role Descriptions

Session 4

Example of a Company President Role Description

Date: August 2, 2013

Department: Corporate

Title: Company President

Mission: To profitably and effectively manage the company and to maintain the highest possible level of customer satisfaction.

Key Result Areas Time Utilization1. Profitability

15% 2. Staff Development/Management

10%3. Corporate Management 15%4. Planning

20%5. Corporate Culture Management 10%6. External and Public Relations 15%7. Organizational Development 10%8. Miscellaneous 5%

Session 4

Example of a Company President Role Description

KEY RESULT AREAS OBJECTIVES/ACTIVITIES

1. Corporate Management a. Working with the senior management team, ensures that corporate performance is aligned with the company’s strategy.

b. Meets regularly with each senior manager to identify and resolve issues related to corporate performance.

2. Planning a. Leads the corporate strategic planning process.

b. Works with senior management to develop the corporate plan.c. Works with members of senior

management to evaluate performance and develop strategies for improving performance against the corporate plan.

Session 4

Goals, Performance Review, Performance Evaluation and

Rewards

Session 4

Strategies for Establishing Individual Performance Goals

• Link to the individual’s Key Result Areas

• Support of the company’s business unit’s plan.

• Consider the individual’s needs, goals, skills, abilities.

• Limit number – no more than 3 to 5 in each Key Result Area.

• Establish such that the individual responsible can exert control over their achievement.

• Record in writing on the Performance Appraisal Form or a “Goal Setting Form” so that they can be referred to regularly by the manager and the individual responsible for achieving them.

Session 4

Goal Setting Worksheet

Support for Personal Goals

Support for Division/

Department Goals

GoalsKey

Result Area

Individual’s Name:___________ Position:_______________

Session 4

Performance Evaluation Form

Individual’s Name:___________ Position:_______________

Key Result Area Goals

Performance Achieved

Session 4

Exercise: What Do People Value?

RewardImportance in General

Importance to the People You

Supervise

Job security

Good wages

Interesting work

Sympathetic help on personal problems

Promotional growth in the organization

Feeling of being in on things

Full appreciation of work done

Personal loyalty to employees

Good working conditions

Tactful disciplining

Session 4

Sample Plan Page

KEY RESULT AREA: 1.0 Markets and ProductsObjective 1.1: Grow active buyer base at a rate consistent with overall sales growth per year.

Goals Prty Who When Status

1. Increase our active buyer base by 50% from 1/1/0x to 9/30/0x.

A BH 10/1/13

2. Identify and evaluate vehicles for growth beyond FY’0x.

A BH 9/30/13

3. Identify new strategies to support FY ‘0x growth.

C LM 6/30/13

Session 4

Operationalizing the Performance Management System – Company Level

Session 4

Key Result Areas for the Company

It is advisable to use the 6 levels of the Pyramid of Organizational Development + Financial Results:

- Markets - Operational Systems- Products - Management Systems- Resources - Culture - Financial Results (Fiscal Management)

Session 4

Pyramid of Organizational Development

Personnel:• Hiring• Compensation

Corporate Culture

Values Beliefs Norms

Management Systems

Planning OrganizationManagementDevelopment

Perf.Mgmt.

Operational Systems

Resources Management

Products & Services

Markets

Accounting:

• Billing• Payroll

Production:

•Shipping

Marketing:

• Selling

Financial Resources

Technological and Physical Resources

Human Resources

Develop Products (Services)

Define Market Segments and Niche

Business Foundation Business Definition Strategic Mission Core Strategy

Session 4

Sample Objectives – Company

KRA 1.0 Markets• Profitably grow our market share.

• Foster the best customer relationships in our industry.

Key Result Area 2.0 Resources• Achieve/maintain highly trained staff.• Minimize staff turnover.• Maintain physical environment with up-to-date

equipment, facilities, design, and ambiance that is both safe and regulatory agency compliant.

Session 4

Sample Goals

• Develop and begin production of two new internally generated product ideas that will result in total sales of $4 million by 12/31/13. [Peter]

• Earn revenues of $5 million by 12/31/13. [Paul]

• Open new accounts with average sales of $30,000 each by 12/31/13. [Mary]

Session 4

Sample Plan Page

KEY RESULT AREA: 1.0 Markets and ProductsObjective 1.1: Grow active buyer base at a rate consistent with overall sales growth per year.

Goals Prty Who When Status

1. Increase our active buyer base by 50% from 1/1/0x to 9/30/0x.

A BH 10/1/13

2. Identify and evaluate vehicles for growth beyond FY’0x.

A BH 9/30/13

3. Identify new strategies to support FY ‘0x growth.

C LM 6/30/13

Session 4

Performance Measurement: Corporate Scoreboard

Measure EvaluationGoalObjective

Key Result Area:

Overall Evaluation: _____

Session 4

KRAs Objectives Goals Measures Performance

Local Area Marketing/Sales Growth

Work with branch personnel to profitably achieve sales targets.

Achieve 200X Sales targets.

$$ Achieved$$ Achieved vs. budget

Staff Develop/Mgmt

Train Branch personnel in branch business development techniques.

80% of Branch personnel will meet Countrywide standards in business development by 12/31/0X.

Assessment checklist of business development standards.

Bringing It All Together: The Performance Scoreboard

Session 4

Making Planning Work

• Base your plan on the best available information.

• Involve other members of your team.

• Take time to plan.– At least a full day, once a year, to review/refine your strategy

and set annual Goals.– At least a ½ day each quarter to review/update your plan and

problem-solve.– At least 2 hours a week to individual time management –

schedule time in your calendar to work on Goals.

• Set realistic Goals.

• Hold people accountable for results.

• Celebrate and reward success.

• Don’t give up!– Remember that planning is like sausage AND– It is an invisible key to success!

Kra 2

Business

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