Muhammad Fahmi Shahab
Institut Teknologi
Bandung
Email: fahmishahab@sbm-itb.ac.id
Abstract
The aim of this journal research is
to propose the implementation of a performance management system with a focus
on the Integrated Performance Management System (IPMS) at PT. Pusatex. Recognizing the importance of a robust performance
management framework, the proposed system aims to address key challenges within
the company, including traditional marketing methods, the absence of Key
Performance Indicators (KPIs) in the company's system, and inefficiencies in
the use of machinery and production tools. By implementing IPMS, the goal is to
enhance the overall company performance, align business objectives, and foster
a culture of continuous improvement. The primary objective is to shape a
dynamic and responsive performance management system that not only addresses
current challenges but also positions PT. Pusatex to
build an effective performance management system to compete with global
competitors.
Keywords: performance
management system, integrated performance management system, IPMS
Introduction
PT Putera Sahabat
Textile, commonly known as PT. Pusatex, was
established in 2009 according to the company's founding deed, numbered 37,
dated August 15, 2009. Located at Jl. Raya Watusalam
RT. 14 RW. 07, Watusalam Village, Buaran
District, Pekalongan Regency, the factory spans an
area of 7,221 square meters. PT. Pusatex specializes
in the production of woven "palekat" sarongs
under the brand "CENDANA." The company employs 285 individuals, with
206 male and 79 female employees.
The numerous changes needed at PT. Pusatex, relating to the development of the company that
requires improvement, led the author to propose an integrated performance
management system to address these issues.
In the competition among companies
and considering the rapid pace of technological advancements, it is expected
that companies have an assessment of their performance (Sheng,
Zhou, & Lessassy, 2013). This system is something that
should be consistently implemented within the company throughout its operation.
The designed performance management system aims to enhance both the company's
overall performance and that of its employees (Biron,
Farndale, & Paauwe, 2011). The system should be effectively
and efficiently achieved by emphasizing a strong quality orientation, focusing
on employee development aspects, and addressing the pressures associated with
evaluating factors within individuals and groups (Meyers,
Durlak, & Wandersman, 2012).
For this reason, a company
performance management system is the appropriate approach to assess all aspects
of PT. Pusatex to improve problematic areas within
the company, both at the organizational and individual levels.
Performance management is a
systematic and integrated approach to managing organizational performance to
achieve its strategic goals. According to (Aguinis,
Joo, & Gottfredson, 2012), performance management is a
continuous process that involves the identification, measurement, and
enhancement of the performance of individuals and teams. Additionally, it
serves to align performance with the strategic objectives of the organization.
In doing so, performance management significantly contributes to the sustained
success of the organization by enhancing the capabilities of its employees (Shahzad,
Jianguo, & Junaid, 2023).
Integrated Performance Management
System (IPMS), formulated by (Wibisono,
2016), is regarded as an advancement that
builds upon the concepts of Balanced Scorecard (BSC) and Performance Prism. It
combines the simplicity of BSC design with the focus on stakeholders from
Performance Prism, aiming to be applicable, especially for companies in
Indonesia. IPMS uses only three perspectives: business results, internal
processes, and resource capabilities (Napitu,
2017).
The comparison suggests that the
Integrated Performance Management System (IPMS) is a type of Performance
Management System (PMS) that amalgamates the simplicity found in Balanced
Scorecard (BSC) and The Performance Prism, while also considering stakeholders.
Some advantages of IPMS over BSC and The Performance Prism, as highlighted by (Wibisono,
2016), include: 1. Uses a simple and
structural approach, focusing on performance processes and outputs. 2. Allows
stakeholders to develop strategies, target, and evaluate outcomes. 3. Just in
terms of gauging performance in relation to duties, obligations, and
compensation schemes. 4. Offers a useful foundation for figuring out who is
responsible. 5. Assigns accountability to those involved to improve
performance.
Method
the research design
is a plan and procedure that encompasses decision-making from broad assumptions
to detailed methods of data collection and analysis (Creswell
& Creswell, 2017). In this Journal, a qualitative
research approach is employed. This method involves the exploration of
information from subjects, namely stakeholders responsible for governing and
managing the company. The stakeholders include the president director and
managerial-level individuals from PT. Pusatex, such
as HR manager, marketing, finance, and PPC (Production, Planning and Inventory
control). Data collection is conducted with all these subjects to obtain
relevant and precise data for the qualitative research needs.
The first step taken by the researcher to address the issue
is the collection of primary data, consisting of interview results from stakeholder
of the company. The primary data collection involves conducting face-to-face interviews
with the stakeholder within PT. Pusatex. The
researcher utilizes in-person interviews to gather primary information.
Secondary data is collected from various sources within PT. Pusatex, such as financial reports, company deeds, employee
data, and the company's profile. This secondary data will support the research
in understanding the company's conditions and business processes.
Results and Discussion
Designing Performance Management
System
In formulating a performance management system, there are
four fundamental stages. Utilizing the information outlined in all these stages
is essential for crafting a new performance management system (Armstrong
& Taylor, 2020). Furthermore, this information can
be instrumental in proposing a fresh performance management system. The
proposal for a novel performance management system, employing the IPMS method
for PT. Pusatex is presented below
:
In designing a performance management system, there are four
fundamental steps (Ates,
Garengo, Cocca, & Bititci, 2013). Designing a new performance
management system can utilize all the information explained in each stage.
Additionally, it can serve to support the proposal of the new performance
management system. The proposal for the new performance management system using
the IPMS method for PT. Pusatex can be seen below.
Stage 0: Foundation
According to (Wibisono,
2016), understanding the four principles
and five rules in designing a performance management system is the focus of
this stage. There are four foundational principles to consider when developing
a performance management system :
1) Partnership with Stakeholders:
Stakeholders
must understand and support IPMS, contributing to targeted actions and
improvements.
2)
Empowerment
of Employees:
Successful
leaders empower employees based on their abilities, actively involving them to
support company performance.
3) Integrated Performance Improvement:
Fostering a
sense of belonging among employees enhances overall company performance.
Independent
Team:
A team formed by PT. Pusatex's
Director has the authority to develop a company-specific performance management
system.
make decisions.
a.
Easy-to-Understand Approach (KISS):
Prioritizing simplicity in design and implementation over complex scoring or
certificates.
b.
Long-Term Orientation: Focus on both
financial and non-financial aspects for long-term competitiveness.
c.
Real-Time Feedback: Implementing
variables in real-time to promptly address new issues like production defects
or performance deviations.
d.
Continuous Improvement: Emphasizing
continuous improvement through benchmarking, comparing past and current
performance internally and externally.
e.
Quantitative Approach: Adopting a
quantitative approach for analyzing and evaluating planned improvements,
facilitating straightforward progress tracking.
Stage 1 Basic Information
This basic information is integral
to the development of the performance management system. This journal uses SWOT
analysis which was developed into the TOWS Matrix. SWOT Analysis is an
effective strategic planning method designed to assess the strengths,
weaknesses, opportunities, and threats associated with a company that is either
in development or still in the planning phase.
Stage 2 Design
When creating the IPMS (Integrated Performance Management System),
the researcher will concentrate on several key aspects, including the company's
vision and mission, corporate strategy, performance variables, variable
linkage, and benchmarking.
Vision
PT Pusatex currently does not have
a company vision, and the researcher here proposes a new vision for PT Pusatex based on the company's future needs. The researcher
proposes the following new vision: "To be the biggest producer of sarung with the highest quality materials to delight our
customers, meeting their needs and employing the best technology."
After discussions with the President
Director of PT. Pusatex, the vision "To become one of the biggest
producers of sarongs with the highest quality materials to delight our
customers" has been selected.
Mission
Mission is a series of actions necessary to achieve the
vision. It can also be described as an elaboration of the vision. While the
vision is usually condensed into one sentence, the mission is articulated in
several sentences designed to be easily understood by anyone reading it.
Table 2. Mission Design
Strategy
Corporate strategy is a plan that originates from the main
objectives or policies established by a company, involving a series of
interrelated actions.
Based on the design of the Integrated Performance Management
System (IPMS), all corporate strategies will be categorized into three groups:
resource availability, internal processes, and organizational outcomes. The
strategic map of PT. Pusatex can be seen in the
figure below.
Figure 1. Strategy Map
Performance
Variable
There are two recognized types of variables: quantitative variables
and qualitative variables. While certain variables may not be easily measurable
quantitatively, qualitative variables can be effectively employed (Borrego,
Douglas, & Amelink, 2009). Qualitative variables can be
utilized successfully as long as they are specific and utilize a rating system.
In the design of the Integrated Performance Management System (IPMS),
performance variables are categorized into three perspectives, as illustrated
in the following table.
Table 3. Performances Variable
|
PERSPECTIVE |
ASPECT |
KPI |
|
1.
Organizational
Output |
a.
Financial Aspect |
1)
ROE |
|
|
|
2)
ROA |
|
|
|
3)
Net profit margin |
|
a.
|
|
4)
Revenue |
|
a.
|
|
5)
Current ratio |
|
b.
|
|
6)
Debt Ratio to Equity |
|
|
|
7)
Debt Ratio to Asset |
|
|
|
8)
Expense Ratio |
|
|
|
9)
Total asset turnover |
|
|
b. Non Financial Aspect |
1)
Customer satisfaction index |
|
2. Internal process |
a. Innovation |
1) Product innovation |
|
|
b. Operation process |
1) Reject rate |
|
|
|
2) Product delay |
|
|
c. Marketing |
1) New customer growth |
|
|
|
2) Number of partnership |
|
|
|
3) After Sales |
|
|
|
4) Customer feedback and suggestion |
|
|
|
5) Customer Complaint |
|
3.
Resource capability |
a.
Human resource |
1)
Employee productivity |
|
|
|
2)
Employee competency |
|
|
|
3)
Employee Attendance Level |
|
|
b.
Technology resource |
1)
Availability of technology |
|
|
c.
Organization capital |
1)
Teamwork and knowledge sharing |
|
|
|
2)
Leadership |
Linkage
Variable
The researcher employs correlation analysis with a focus on
interviews and group discussions. This is utilized to explore the
interconnections between each perspective and to identify cause-and-effect
relationships based on the opinions and experiences of the involved parties.
The cause-and-effect relationships are still in the form of predictions as they
have not been proven yet.
Variabel Linkage
Benchmarking
Due to data limitations, this study focuses on internal
benchmarking and competitive benchmarking. Internal benchmarking is conducted
using financial performance from the period 2018 to 2022. Competitive
benchmarking is done with PT. TSU, which operates in the same industry as PT. Pusatex.
The table above shows that PT. Pusatex is superior in many ways compared to competitors in
net profit companies PT. Pusatex is also superior in
the expense which is still a challenge for PT. Pusatex’s
Net profit which is still decreasing unlike PT TSU which experienced its best
year in 2022, therefore it is a challenge for PT. Pusatex
to make next year the best year and develop in the following years. Therefore a
need for PT. Pusatex to develop a strategy regarding
this matter and find out why net profit this year has only grown slightly after
further research because expenses are still high compared to the development of
net profit and the results of discussions with the director of the company it
turns out that many lines are still not being carried out properly, namely in
the operational section where there are still many reject rates and project
delays that need to be improved, besides that the marketing department is also
still carrying out traditional activities, all of this also happens because
there is no KPI in the company, this problem will always occur and there is no
awareness leading to it.
Stage 3 Implementation
The implementation plan will encompass details such as the
specific activities, the designated individuals responsible for each task, and
the expected duration for each activity.
|
NO |
ACTIVITIES |
PERSON IN CHARGE |
DURATION (DAY) |
|
1 |
Introduction about performance management system |
Top
management |
1 |
|
2 |
Presentation of the analysis about the current situation of PT. Pusatex, and explain the advantage of implementing
performance management system |
Top
management |
1 |
|
3 |
Brainstorming about foundation and basic information stage |
Top
management |
1 |
|
4 |
Analysis of internal and external environment of the company |
Top
management |
1 |
|
5 |
Explanation and introduction about stage 2 in designing IPMS for new
Vision, Mission and strategy for PT. Pusatex |
Top
management |
4 |
|
6 |
Explanation about proposed variable, linkage and benchmarking |
Top
management, middle management |
6 |
|
7 |
Explanation about stage 3 : implementation |
Top
management, middle management |
5 |
|
8 |
Resource allocation |
Top
management, middle management |
2 |
|
9 |
Designing report of the IPMS |
Top management,
middle management |
2 |
|
10 |
Cost benefit ratio analysis |
Top
management, middle management |
2 |
|
11 |
Leadership training |
Human
resources and Visi semesta alam |
2 |
|
12 |
Employee training (operation) |
Human
resources, Production, Planning and Control (PPC) and Visi semesta alam |
4 |
|
13 |
Autonomous maintenance |
Engineering
& Production, Planning and Control (PPC) |
10 |
|
14 |
Digital marketing |
Marketing
& Revo U |
7 |
|
15 |
Designing display of IPMS |
Top
management, middle management, IT |
5 |
|
16 |
Socialization the new IPMS |
Employee |
3 |
|
17 |
Performance measurement |
Top
management |
Continuous
process |
|
18 |
Evaluation of measurement |
Top
management |
Continuous
process |
|
19 |
Diagnosing of improvement |
Top
management |
Continuous
process |
|
20 |
Follow up |
All
employee |
Continuous
process |
The table above outlines the details of activities in the implementation
plan, starting from the introduction, through the continuous change process in
establishing a new performance management system.
The introduction of IPMS and its socialization will take
place over approximately 3 months from April 2024 to June 2024. Following the
socialization, performance measurement, measurement evaluation, diagnostic
improvement, and continuous follow-up will be conducted.
This timeline will span around 1 month, starting from the
beginning of the new quarter and will be reviewed at the end of the quarter.
The Corporate Strategy Team, as an independent team, will collaborate with the
Account Management Team, starting with observing and mapping the existing
business processes applied by Account Management, conducting literature
research on frameworks and systems applicable to existing Account Management
operations, building and testing the functionality of the new IPMS, socializing
and implementing the recommended system, collecting feedback, and refining it
until the end of the research project duration.
Stage 4 Refreshment
The final step in the performance management system is
refreshment, where a thorough assessment is conducted based on the latest
information and knowledge (Marr
& Gray, 2012). This step highlights the ongoing
maintenance of the established system, stressing the importance of leadership,
commitment, and stakeholder involvement for long-term effectiveness (Lazos‐Chavero
et al., 2016).
A dynamic and continuously updated performance management
system is essential to stay in sync with changes in the business environment,
such as competition, regulations, community demands, customer needs, and
technological advancements. It should also be flexible enough to adapt to
evolving performance standards and methods. Leadership, commitment, and
stakeholder involvement are critical aspects that the system should address.
Regular monitoring is vital to prevent errors and ensure that the company consistently
meets its targets.
Conclusion
Berdasarkan uraian di atas, maka kesimpulannya:
1. Pemilik UMKM Bellosano.id dalam
menjalankan usahanya membuat dua jenis laporan keuangan yaitu laporan laba
rugi dan laporan perubahan modal. 2. UMKM Bellosano.id tidak
menerapkan standar SAK EMKM
dengan tidak menyusun laporan keuangan yang terdiri dari laporan laba
rugi, laporan posisi keuangan, dan CALK. 3. Berdasarkan uraian pada bab 4 mengenai laporan keuangan UMKM
Bellosano.id, terlihat bahwa
UMKM Bellosano.id belum menerapkan
standar SAK EMKM yang berlaku.
Standar tersebut seharusnya mencakup laporan laba rugi,
laporan posisi keuangan, dan CALK
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