Over the years, there have been numerous approaches and metrics used to monitor, measure, and track the performance of an organization. However, if you want a proper assessment of your business and how everything is going, you need to pay attention to these two approaches:

  • Key Performance Indicator (KPI)
  • Key Result Area (KRA)

If you want your business to be successful, you have to understand what both these metrics are, what they stand for, how to use them in your business, and the difference between both of them. Finding the right balance between them is going to put all your business goals on the right track and make sure that your employees are giving their 100% for the good of your business.

Difference Between KPI and KRA

In this article, I am going to review KPI vs KRA and discuss what role they play in a company’s success. So, without further ado, let’s get right into it.

Key Performance Indicators (KPIs)

A key performance indicator is a quantifiable value that helps a business measure how effectively it is achieving its goals and objectives. Corporations and organizations mostly divide KPIs into different levels so that they can easily evaluate the success of different departments.

KPIs can be divided into high to a low level, with each serving its unique benefits. High-level KPIs can be used to access the overall success of your business, including your long to short term goals. On the other hand, low-level KPIs can be used to focus on departmental processes such as sales, marketing, etc.

If you want your performance indicators to be useful, you have to find out which of them are relevant to the department you have chosen. Once you have successfully determined that, you can track these indicators in real time to judge how well they are doing.

You can also make use of different tools such as a KPI dashboard to effectively track the performance and report it in real time. KPI dashboard software is a great way to make data readable so that you can perform analytics on it and make accurate predictions.

One of the most important things you have to keep in mind is how a KPI relates to your business. As every business is run in a different way, you need to make sure that you customize the KPI according to your wants and needs so that you can easily achieve your goals. Here are some steps that you must follow when developing KPIs for your business.

  • Clearly online your goals and objectives
  • Share them with major stakeholders for approval
  • Review your objectives consistently
  • Update them if needed

Key Result Areas (KRAs)

As opposed to KPIs, key result areas are qualitative, which means that it is a strategic factor that plays an important role in achieving company goals. KRA defines what a specific job is supposed to accomplish and what objectives are attached to each KRA.

KRAs play an important role in making your employees understand their roles and responsibilities in a better way. KRAs should be well thought of, strategic, and outline the scope of a job in a broad way so that your organization keeps running smoothly.

For example, a manager who is working in a production company must understand that he is responsible for maintaining the budget of the department, handling all the employees, coordinating with other departments, introducing new technologies, analyzing the progress, and reporting everything to his superiors.

Key result areas work in those departments where a single individual has full ownership of his acts. You can then easily list out some tasks that he will have to do daily and judge his performance with the help of KPIs.

With the help of KRAs, a company can improve itself by:

  • Clarifying the role of each individual
  • Aligning individual roles to your organization’s plan
  • Make employees deliver results by setting goals
  • Improve work and time management
  • Make improved decisions

For example, you were to design key result areas for your IT department; you will typically need to pay attention to:

  • IT planning
  • Project design, development, and implementation
  • Project timeline and delivery
  • User satisfaction


If you look at both KPI vs KRA, both of these metrics fall under performance management as they play a key role in making sure that your company keeps working in a professional manner. Setting goals and objectives are one of the most important ways to measure success, which is why you should be doing it regarding whether you are following any KPI or KRA fundamentals.

Key performance indicators are the most basic tools that are going to help you determine what you have achieved so far, while KRAs are going to help you achieve a high level of performance from your employees so that you can gain a competitive place in the market. You should give careful attention while planning out and defining each of these metrics to make sure that they are aligned with what your business stands for.

At the end of the day, if you want your business to be successful, you have to translate long term strategies into a balanced set of operational objectives that you can achieve with the help of KPI and KRA. These two components are going to be an essential part of your recipe for success and are going to prove the foundational stones upon which your business empire is going to be built.