Performance Reviews for Small Businesses: KPIs, KRAs and a Simple 360° Process
A no-jargon guide to performance management for Indian SMBs: KPI vs KRA, example goals for factory, retail, sales and office roles, a short 360° review template, rating scales and a yearly review calendar.
pagar karo Payroll Desk· Published 26 Oct 2026· 3 min readGive each person 3–5 goals: KRAs name the area of responsibility and KPIs put a number on it (for example, KRA “store operations”, KPI “95% opening checklist completion”). Update progress monthly, run a short review once or twice a year with self, manager and optionally one or two peers, use a 1–5 rating scale with written examples, and connect outcomes to confirmation, increments and training.
- KRA = area of responsibility; KPI = the measurable number within it.
- 3–5 goals per person is enough; more gets ignored.
- Monthly progress updates make the yearly review a formality, not a surprise.
- Keep 360° short: 5–8 questions, 1–2 peers.
KPI vs KRA in one minute
A KRA (key result area) is what someone is responsible for. A KPI (key performance indicator) is how you measure it. Every KPI belongs to a KRA.
| Role | KRA | KPI |
|---|---|---|
| Machine operator | Quality | Scrap rate below 2% |
| Production supervisor | Output | 95% of daily plan achieved |
| Store manager | Store operations | Opening checklist done 95% of days |
| Salesperson | Revenue | ₹6,00,000 orders a month; 12 new outlets a quarter |
| Accounts executive | Collections | Receivables over 60 days below 10% |
| HR executive | Payroll accuracy | Zero salary corrections after lock |
Writing goals people can hit
- Start, target and pass mark — e.g. start 3% scrap, target 2%, pass at 2.5%.
- Inside their control — don’t give a salesperson a factory delivery KPI.
- Time-bound — monthly, quarterly or by a date.
- Visible — staff should see their goals and progress on their phone.
A 360° review that fits on one page
Use a 1–5 scale (1 = well below expectations, 3 = meets, 5 = well above) and ask for one example per answer.
- How well did this person achieve their goals?
- Quality of work
- Reliability and attendance
- Teamwork and communication
- Customer focus (internal or external)
- One thing they should keep doing
- One thing they should improve
Collect: self-review, manager review and, optionally, one or two peers (anonymous if your culture needs it). The manager writes the final rating.
A simple yearly calendar
| When | What |
|---|---|
| April | Set yearly goals |
| Every month | Progress updates on goals |
| October | Mid-year check-in (or half-yearly review) |
| March | Annual review; release results |
| April | Increments and new goals |
Link reviews to decisions
- Confirmation after probation.
- Increments — as salary revisions with approval.
- Training — for the “improve” answers.
- Recognition — share the attendance scorecard’s top three.
Performance in pagar karo
Set KPIs and KRAs for one person or a team, let managers and staff update progress (staff updates wait for review), run quarterly, half-yearly or yearly cycles with self, manager and peer feedback, and release results to the staff app. See performance & goals.
Frequently asked questions
How many KPIs should an employee have?
Three to five. Each should be measurable, within the person’s control and reviewed at least monthly.
How often should a small business review performance?
Once a year for formal reviews (twice for sales or fast-changing roles), with monthly check-ins on goals. Probation reviews happen separately before confirmation.
Should attendance count in performance?
It can be one input. An attendance scorecard rewarding punctuality and reliability works well for shop-floor and frontline roles, but shouldn’t be the only measure.
This guide is general information for employers in India, checked against the sources above on 26 Oct 2026. Rules and rates change — confirm with your CA or the official notification before acting.