Perpustakaan Digital ITB

This final project report describes the performance management and reward systems as it has been, and should have been implemented in PT XYZ. The need for updating and implementing the updated PT XYZ’s performance management and reward systems are because there have been such business issues as higher failure rate in test bay and lower employee productivity if compared with the specified targets in the financial year of 2010-2011. There are 2 (two) problem formulations need to be addressed by the author during research/investigation of the above problems that are: (1) why did such problems as higher failure rate in test bay and lower employee productivity if compared with the specified targets in the financial year of 2010-2011 happen in PT XYZ; and (2) how could PT XYZ reduce the failure rate in test bay and increase its employee productivity. iv Methodology, used during the research, is the quantitative research method which includes business issue exploration, literature review, data collection, data interpretation, data analysis, finding discussion and deductive conclusion. In addition, the author also adopt the research methodology of Wibisono, D.1 and Kaplan and Norton’s balanced scorecard (BSC) framework2 in determining the strategy map, proposed to both the management and union of PT XYZ. The proposed strategic map enables the management of PT XYZ to look better at the business from 4 (four) important perspectives: (1) learning and growth perspective; (2) internal business processes perspective; (3) customer perspective; and (4) financial perspective. Based on (1) ICMA International’s survey in 2010 of PT XYZ’s employees; (2) The expectancy theory model3 which describes that employee’s satisfaction and motivation are as functions of his or her last effort to performance expectancies, performance to reward expectancies and perceived attractiveness of rewards; and (3) intense communication between the president director and the president of union of PT XYZ of bonus scheme and salary increment, the author believes that the root causes of increase in failure rate in test bay and lower productivity, compared with their respective targets in the financial year of 2010-2011, are that the major employees of PT XYZ had less motivation and target commitments. These were due to their dissatisfaction with the implemented performance management and reward systems in PT XYZ. PT XYZ has decided to approach both short and long-term business solutions in handling the business issues. The short-term business solutions are more likely to be fire-fighting activities. They are developed and implemented for smoothening (daily) operational activities while the long-term solutions are developed to be in-line with PT XYZ’s long-term (strategic) plans or intents. The detail of implementation plan of business solutions are described in chapter 4 of this final project report.