Implementation of Performance Implementation of Performance

Management in Indonesia : Management in Indonesia :

Problems, Challenges and Problems, Challenges and

ExpectationExpectationExpectationExpectation

Sri Hadiati WKSri Hadiati WK

Presented in

International Seminar on Public Service Delivery

OECD Korea Policy Center and The Royal Government of Cambodia22-23 June 2010

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1. 1. Introduction Introduction

2. 2. Bureaucratic ReformBureaucratic Reform

3. 3. Implementation of Performance Management in IndonesiaImplementation of Performance Management in Indonesia

4. 4. Challenges and ExpectationChallenges and Expectation

CONTENTCONTENT

55. . SummarySummary

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SteppingStepping downdown ofof Suharto’sSuharto’s administrationadministration inin 19981998 hashasgivengiven chanceschances forfor variousvarious kindskinds ofof changechange inin IndonesiaIndonesia ::

●● DemocraticDemocratic processprocess

●● AmendmentAmendment ofof ConstitutionConstitution

●● BureaucraticBureaucratic reformreform..

INTRODUCTIONINTRODUCTION

●● BureaucraticBureaucratic reformreform..

WhenWhen PresidentPresident SBYSBY inin powerpower inin 20042004,, bureaucraticbureaucraticproblemsproblems areare veryvery complexcomplex ::

●● InefficientInefficient

●● IneffectiveIneffective..

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MoreMore systematicsystematic andand comprehensivecomprehensive approachapproach ofofbureaucraticbureaucratic reformreform startedstarted inin 20072007 ::

●● MinistryMinistry ofof FinanceFinance asas pilotpilot projectproject..

●● FollowedFollowed byby SupremeSupreme CourtCourt (MA)(MA) andand FinancialFinancialSupervisorySupervisory BoaBoarrdd (BPK)(BPK)..

INTRODUCTION INTRODUCTION

SupervisorySupervisory BoaBoarrdd (BPK)(BPK)..

ObjectiveObjective ofof thethe reformreform ::

●● EnhancingEnhancing qualityquality ofof bureaucracybureaucracy throughthrough improvingimprovinggovernmentgovernment system,system, strengtheningstrengthening organizationalorganizationalcapacity,capacity, humanhuman resourcesresources andand simplifyingsimplifying businessbusinessprocessprocess..

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INTRODUCTIONINTRODUCTION

ProgressProgress ofof civilcivil serviceservice reformreform proceedsproceeds veryvery slowlyslowly afterafteramendmentamendment ofof LawLaw 88//19741974 inin 19991999 ::

●●CivilCivil servantservant isis veryvery volatilevolatile towardtoward politicalpolitical interventionintervention

●●LittleLittle progressprogress onon improvingimproving civilcivil serviceservice systemsystem ::recruitmentrecruitment andand selection,selection, carriercarrier system,system, trainingtraining andandrecruitmentrecruitment andand selection,selection, carriercarrier system,system, trainingtraining andanddevelopment,development, remuneration,remuneration, pensionpension system,system, etcetc..

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BUREAUCRATIC REFORMBUREAUCRATIC REFORM

�� IndonesianIndonesian governmentgovernment hashas strongstrong politicalpolitical willwill totoreformreform itsits bureaucracybureaucracy..

�� SuccessfulSuccessful ofof bureaucraticbureaucratic reformreform willwill havehave aa directdirectimpactimpact onon enhancingenhancing competitivenesscompetitiveness ofof nationalnationaleconomyeconomy..

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�� ToTo extendextend bureaucraticbureaucratic reformreform programsprograms toto otherothergovernmentgovernment institutions,institutions, currentlycurrently itit isis designingdesigning grandgranddesigndesign ofof bureaucraticbureaucratic reformreform asas wellwell asas establishingestablishingBureaucraticBureaucratic ReformReform CommitteeCommittee chairedchaired byby ViceVicePresidentPresident..

BUREAUCRATIC REFORM COMMITTEE BUREAUCRATIC REFORM COMMITTEE

�� ViceVice PresidentPresident willwill bebe assistedassisted byby threethree CoordinatingCoordinatingMinisters,Ministers, ii..ee.. CoordinatingCoordinating MinisterMinister forfor Politic,Politic, LawLawandand Security,Security, CoordinatingCoordinating MinisterMinister forfor Economy,Economy, andandCoordinatingCoordinating MinisterMinister forfor People’sPeople’s WelfareWelfare..

�� ReformReform programprogram willwill bebe implementedimplemented byby MinisterMinister forfor

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BureaucraticBureaucratic ReformReform whichwhich willwill bebe supportedsupported byby ::

●● MinisterMinister ofof Finance,Finance,

●● MinisterMinister ofof HomeHome Affairs,Affairs,

●● HeadHead ofof NationalNational PlanningPlanning AndAnd DevelopmentDevelopmentBoard,Board, andand

●● UKPUKP44 (Presidential(Presidential WorkingWorking UnitUnit forfor SupervisionSupervisionandand ControllingControlling Development)Development)

MAIN TASK OF MAIN TASK OF

BUREAUCRATIC REFORM COMMITTEE BUREAUCRATIC REFORM COMMITTEE

Enhancing quality of bureaucracy through improving government Enhancing quality of bureaucracy through improving government

COMMITTEECOMMITTEE

Enhancing quality of bureaucracy through improving government Enhancing quality of bureaucracy through improving government system, strengthening organizational capacity, human resources system, strengthening organizational capacity, human resources

and simplifying SOPand simplifying SOP

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TARGETTARGET

In 2025 reform program has fully implemented In 2025 reform program has fully implemented

both in central and local government. both in central and local government.

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One of the approaches in strengtheningHuman

resource management is application of

Performance management system

IMPLEMENTATION OF PERFORMANCE IMPLEMENTATION OF PERFORMANCE

MANAGEMENT IN INDONESIAMANAGEMENT IN INDONESIA

�� DevelopmentDevelopment ofof performanceperformance managementmanagement ininIndonesianIndonesian governmentgovernment iinstitutionnstitution hashas beenbeen sstarttartededinin endend ofof 19901990ss..

�� NIPANIPA cancan bebe regardedregarded asas aa pioneerpioneer ofof developingdevelopingperformanceperformance managementmanagement amongamong governmentgovernment

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performanceperformance managementmanagement amongamong governmentgovernmentinstitutionsinstitutions ::

�� InIn 19991999 NIPANIPA hadhad establishedestablished somesome researchresearchcenterscenters whichwhich specificallyspecifically focusedfocused onon performanceperformanceofof variousvarious subjectsubject..

�� IncreasedIncreased attentionattention toto deeplydeeply learnlearn performanceperformanceamongamong NIPA’sNIPA’s researchersresearchers..

RECENT DEVELOPMENT OF PERFORMANCE RECENT DEVELOPMENT OF PERFORMANCE

MANAGEMENT IN INDONESIAMANAGEMENT IN INDONESIA

�� Currently, many central and local governments have Currently, many central and local governments have implemented performance management in different implemented performance management in different format and formula.format and formula.

�� Both in organizational and individual performance Both in organizational and individual performance management.management.management.management.

�� Performance has been main indicator in measuring Performance has been main indicator in measuring the succeed of an the succeed of an institutioninstitution including local including local government agencies.government agencies.

�� In 2008, Government Regulation was issued as formal In 2008, Government Regulation was issued as formal guidelines to measure the performance of local guidelines to measure the performance of local government.government.

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�� Individual performance management works slower Individual performance management works slower than than organisationalorganisational performance management:performance management:●● No formal policy issuedNo formal policy issued●● Government is still preparing policy for Individual Government is still preparing policy for Individual

performance management.performance management.

RECENT DEVELOPMENT OF PERFORMANCE RECENT DEVELOPMENT OF PERFORMANCE

MANAGEMENT IN INDONESIAMANAGEMENT IN INDONESIA

�� To fulfill need for more objective performance To fulfill need for more objective performance measurement, some local governments have measurement, some local governments have initiated to formulate the performance initiated to formulate the performance management system.management system.

�� Initiative mainly come from the Head of Region (i.e. Initiative mainly come from the Head of Region (i.e. Governor, Mayor or Regent). Governor, Mayor or Regent).

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IMPLEMENTATION OF PERFORMANCE MANAGEMENTIMPLEMENTATION OF PERFORMANCE MANAGEMENT

Local Governments which have designed their own Local Governments which have designed their own performance contract : performance contract : ●●Yogyakarta Provincial Government Yogyakarta Provincial Government ●●Gorontalo Provincial Government Gorontalo Provincial Government ●●Yogyakarta Municipal GovernmentYogyakarta Municipal Government●●Boalemo Government Boalemo Government ●●Etc.Etc.

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IMPLEMENTATION OF PERFORMANCE MANAGEMENTIMPLEMENTATION OF PERFORMANCE MANAGEMENT

�� GorontaloGorontalo Provincial Government has implemented Provincial Government has implemented performance contract, performance standard and performance contract, performance standard and performance evaluation since 2005 for managerial performance evaluation since 2005 for managerial positions. positions.

�� Yogyakarta Municipal Government has practiced Yogyakarta Municipal Government has practiced �� Yogyakarta Municipal Government has practiced Yogyakarta Municipal Government has practiced performance contract, performance review and performance contract, performance review and performance evaluation since 2004.performance evaluation since 2004.

�� In Yogyakarta Municipal Government, performance In Yogyakarta Municipal Government, performance evaluation also involves peer. evaluation also involves peer.

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IMPLEMENTATION OF PERFORMANCE MANAGEMENTIMPLEMENTATION OF PERFORMANCE MANAGEMENT

�� More and more local governments design their own More and more local governments design their own performance management system. performance management system.

�� However, most local governments still do not practice However, most local governments still do not practice performance management system yet.performance management system yet.

�� They actually need some assistance in designing and They actually need some assistance in designing and �� They actually need some assistance in designing and They actually need some assistance in designing and implementing performance management.implementing performance management.

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NIPA’S ROLES IN DESIGNING NIPA’S ROLES IN DESIGNING

PERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENT

�� NIPA has initiated to design individual performance NIPA has initiated to design individual performance management system for Indonesian civil servants in management system for Indonesian civil servants in 2001 through a series of research, workshops, seminars, 2001 through a series of research, workshops, seminars, study visit, etc. study visit, etc.

�� Concept prepared by NIPA has been adjusted with the Concept prepared by NIPA has been adjusted with the �� Concept prepared by NIPA has been adjusted with the Concept prepared by NIPA has been adjusted with the need and context of central and local government need and context of central and local government organisationsorganisations..

�� It mainly consists of performance contract, It mainly consists of performance contract, performance review, performance evaluation and performance review, performance evaluation and reward/punishment. reward/punishment.

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PLANNING

REWARD

Bonus

Transfer

Promotion

PLACEMENT

CYCLE OF PERFORMANCE MANAGEMENTCYCLE OF PERFORMANCE MANAGEMENT

PERFORMA

NCEACTION

REVIEW AND

EVALUATION

T and D FOLLOW

UP

PUNISHMENT

Without Bonus

Warning

Transfer

T and D

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CHALLENGES AND EXPECTATIONCHALLENGES AND EXPECTATION

�� ImplementingImplementing performanceperformance managementmanagement needneedprerequisitesprerequisites ::

●● ClearnessClearness ofof jobjob andand responsibilitiesresponsibilities ofof individualindividualemployeeemployee..

●● NoNo disguiseddisguised unemploymentunemployment inin bureaucracybureaucracy..●● RewardReward andand punishmentpunishment systemsystem workwork wellwell..●● RewardReward andand punishmentpunishment systemsystem workwork wellwell..●● CertaintyCertainty inin careercareer..●● RotationRotation isis notnot donedone frequentlyfrequently..●● CommitmentCommitment fromfrom allall partiesparties..�� TheThe bigbig challengechallenge forfor governmentgovernment organisationsorganisations

whichwhich areare intendedintended toto implementimplement performanceperformancemanagementmanagement isis relatedrelated toto thosethose prerequisitesprerequisitesaboveabove..

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Four steps to implement performance Four steps to implement performance

management : management :

●● InitiationInitiation StepStep

●● InstallationInstallation StepStep

CHALLENGES AND EXPECTATIONCHALLENGES AND EXPECTATION

●● InstallationInstallation StepStep

●● ConsolidationConsolidation StepStep

●● StabilizationStabilization StepStep..

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SUMMARYSUMMARY

�� IndonesiaIndonesia isis justjust inin anan initiationinitiation stepstep.. MoreMore effortseffortsareare neededneeded toto movemove toto installationinstallation stepstep ofofperformanceperformance managementmanagement strategystrategy..

�� IndonesiaIndonesia governmentgovernment needsneeds toto taketake unpopularunpopularmeasuresmeasures byby ::measuresmeasures byby ::

●● RightsizingRightsizing

●● DistributingDistributing

●● BudgetBudget..

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Thank youThank you

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