Setting business goals is important, but merely defining a list of them may just not cut it if you want to ensure success. How do you translate and break them down into everyday activities? This is where clearly defining the Key Result Areas (KRAs) of your business will help.
KRAs, when aligned with the broad business goals of the company, provide the critical framework that will impact your success. This will enhance the productivity of the company and lead to increased levels of employee satisfaction. As a CEO, I have seen how KRAs can impact both; here are some reasons why.
KRAs and Enhanced Business Productivity
Randall Rollinson and Dr. Early Young in their book Strategy in the 21st Century say:
KRAs is a strategic factor that is like scaffolding or framework that help break down your vision and goals into specific factors that will drive your business success.
KRAs help in improving communication across different departments and teams and outlining their responsibilities. They communicate the latest business goals and strategies to employees, ensuring that their goals are aligned with that of the company’s. Well-defined KRAs enable the business and its workforce to focus more effort and time on areas that yield the most ROI.
KRAs can vary from business to business, but the primary ones are profitability, employee satisfaction, customer and engagement.
LinkedIn is an excellent case study to show this. In the article The Management Framework that Propelled LinkedIn to a $20 Billion Company, setting key result areas is mentioned among the primary reasons for the company’s success. These OKRs (Objectives and Key Results) are used to connect and align employees to the company’s mission. CEO of LinkedIn, Jeff Weiner, pushes the team to challenge themselves with key results, and guides them through weekly meetings to keep up with their progress on their key results.
Read: Employees are the new influencers!
KRAs And Employee Satisfaction
Setting KRAs help employees focus on their goals, which increases productivity and gives them a sense of accomplishment. Apart from that, employee satisfaction and engagement in themselves are important KRAs that business owners must focus on.
A study conducted by Gallup says “The average working population ratio of engaged to actively disengaged employees is near 2:1. Only 30 percent of American workers are engaged at work. The cost of this disengagement results in a whopping 450 billion to 550 billion dollars per year, leading to employee absenteeism, workplace accidents, and higher health care costs.”
Jeremiah Bird of Reward Gateway, says that active employee engagement can be achieved by “the alignment of an individual employee with the goals and vision of the business.”
Contrary to popular beliefs, increments and salary hikes do not contribute to employee satisfaction, but perks like the following do:
- Taking care of employee health and wellness
- Encouraging a work-life balance
- Creating a positive and conducive work environment
- Rewards and recognition programs
- Employee learning and career growth opportunities
- Fostering employee relationship and bonding
- Encouraging off-the-box thinking
- Open communication
- Warm and welcoming new-recruit onboarding
Tying KRAs With Long-Term Business Goals During Hiring
Building a great team is integral to success. Paying more attention in the recruitment and selection process is a critical factor in meeting the long-term goals of the business. Assess the goals and attitudes of potential employees. Ensure that they are in line with the KRAs that will be assigned to them. This is vital to the overall business growth strategy and will save you a whole world of trouble that a misfit could bring.
Manager Foundation’s Keith Tatley says, “While on the surface cultural fit may not seem like a critical factor in the hiring process, it is arguably one of the most important selection criteria.”
When you create a result-driven culture with carefully picked employees, it brings your team together and helps them work together in achieving the strategic goals of your business. This will further assist them in becoming more productive, leading to both employee satisfaction as well as business growth.
Read: Building a Happier Workforce with AI
It All Boils Down to Smart KRAs
Aligning the KRAs of your company to enhance productivity, improve employee engagement and satisfaction, and ensure smart hiring keeping the long-term business objectives in mind, will help you achieve your business goals.
While defining KRAs ensure that they are clear, measurable, and can be modified to suit the changing business goals of your organization. What are some of the KRAs that are working for you?
