Blame yourselves for sloppy performance

By Keith Koppenol

JAKARTA (JP): In some countries, the cost of staff is one of the biggest burdens for a business. In other countries it is one of the smallest. One of the problems, when labor is cheap, is inefficiency. I have seen this problem time and again in many Asian countries.

A certain job, for example, can easily be done by one person. However, that person is poorly paid, possibly not well-educated and has never received any training. The job is not getting done well, nor in time. Never mind, says the manager, labor is so cheap, I will get a second person on the job. The result? The job may be finished on time, but it is still done poorly. Quality management is not only to get the job done, but to get it done well and efficiently.

Just an illustration: I had to work closely with an accountant in Indonesia. I was not getting the financial statements on time. When I did get them, the statements still had many mistakes in them. The accountant said he was too busy and needed someone to help him. OK, the manager said, get yourself an assistant. I knew what the outcome would be. I was getting the statements on time, but all the statements still had many mistakes in them.

So, what's the problem? I would like to give you three examples which clearly demonstrate a large part of the problem.

1. I recently interviewed an accountant. He told me he had studied three years accounting at university level. He could not answer one single basic accounting question.

2. A person with an Indonesian MBA made a P&L for me as follows: Sales minus Cost of Goods plus Stock is Gross Margin. The result was a fabulous (albeit wrong) Gross Margin and Direct Operating Profit. This same person told me she never did an exam for finance/accounting, but was just given her certificate for this subject.

3. I read the advertisements for staff in local newspapers. They ask for people with foreign higher education, such as holders of MBAs. I believe the above examples clearly show that it is not the people (because they are OK if they have a foreign certificate), but possibly either the education system of higher learning or the quality of its educators.

So, what is the answer for today's employers in Indonesia?

I do not profess to have the answer to this problem, I wish I did. I do know that the golden years of yesterday will not return for a long time. Indonesian businesses will need to become much more professional and much more efficient to survive the crisis and to grow and prosper properly (not artificially as in the past) when things finally settle down.

Even if there was a most profound change in the quality of higher education today, it would take years for that change to come through in the form of graduates. So, employers need to do something constructive themselves and become more proactive.

Many, many years ago I built a very successful business in Indonesia, with the best staff I have ever had anywhere in the world, based on training and discipline. I had some very strict rules, which are listed below.

* I advertised every position in the newspaper.

* New employees signed a letter which stated that they had no relatives working for the company and that they understood that the company had the right to dismiss them if it turned out they did have a relative working in the company.

* Particularly the sales people received extensive initial and ongoing training.

* Employees were paid well, with generous bonuses for achievement only.

* Everyone knew that promotions were earned through performance and not because the person was a friend of the boss.

* I made sure everyone had a feeling of pride working for the company. Our sales representatives were the best trained, best paid, cleanest looking and best dressed people on the road. Our offices were in a very ordinary building in Kota, but inside it was neat, clean and well organized.

But training was the key to our success. However, before you start spending money on training, first review your employment practices. Following are some suggestions that may be of value.

1. Start hiring on merit and not on a system of sons/daughters/other family/friends of a family member/friends/friends of a friend. If you wish to run a more profitable business, you advertise your vacancy and you interview the applicants properly. Only employ the very best you can afford.

2. Clean up your office. It is fine to have your office in a rented house somewhere in the back blocks, but most offices are a terrible mess. Everything makeshift and uncomfortable. Make it a place where people enjoy working and you will attract a better standard of people and get better productivity.

3. Supply the new employee with a letter of appointment. This letter spells out what you expect from the person in return for how much salary. It spells out that there is a probation period of, say, one, two or three months. Alternatively, have a three- month contract. If you are not happy at the end of the three months, that's it -- the employee leaves. If you are happy, you can extend the contract for another six months, or employment just continues. I have heard too often: but that is not done in Indonesia. Well, just because it is not done does not mean you cannot do it (unless it is against the law).

4. Send the person to the best possible school for additional training. This is still quite affordable for most companies in Indonesia. This could be a night school or partly night/partly day school.

If the person wants to be paid extra money for going to night school, do not employ that person. (It is ironic that in spite of the enormous unemployment problem here, people still expect/demand all sorts of payments for often seemingly unreasonable reasons).

5. Pay well. Be among the three best payers at your level in your industry, but never the highest. If you are the highest, you will attract people who will leave their present job for an extra few rupiah and they will leave you just as quickly for the same reason.

6. When you are not happy with an employee's performance, talk to the person. Spell it out not only verbally, but also in a letter. When you have good reasons to do this three times without the desired result, you then will have the right to dismiss this employee.

Incidentally, it is amazing how things will improve in a general sense when you actually do this and show your people that you are serious and will act. One thing should always be remembered by every manager: whatever problems you have in your business, it is your fault. If you allow sloppy work, poor attendance and inefficiency (which is exactly what many managers here do allow), then that is what you will have to live with. Do not complain about it. Do not blame your people. The finger is squarely pointed at you.

The writer is a management consultant based in Jakarta.