Human resources management a vital component of business success

A company is only as good as the people who work in it, according to the oft-quoted business adage.

Low morale, poor management and dissatisfaction on the job will inevitably result in poor performance. Conversely, the cliche of the tightly-run ship, with every worker contributing fully to his defined role within the company, is the recipe for success.

"People are the essential component in the success of an organization," says Djunaedi Hadisumarto, assistant for Economic Affairs at the Office of the Coordinating Minister for Economy, Finance and Development Supervision and one of the judges for this year's Asian Management Awards. "The management has to work at bringing out their strengths to fuel success."

Eddy Zaoputra, senior vice president of PT Charoen Pokphand Indonesia, an animal feed company cited in this year's Asian Management Awards for excellence in Financial Management, agrees that human resources are the backbone of an organization's success.

"All companies need professionalism, and not just from the owners. We need to adapt to changes fast and communication, plus an understanding of how people operate in this culture, are very important."

Knowing how to apply human resources development within the cultural context of Indonesia is necessary if a program is to be successful, says Dr. Paul Harianto, President Director of PT Dankos Laboratories which was a joint winner of the Asian Management Award for Financial Management.

"Employees have to work as a team for an operation to be successful," he says. "We review performance of each department at a monthly. If somebody is not performing, not meeting the defined parameters, then we have to look at how to change this."

He adds that this must be done in way sensitive to cultural norms.

"This is Indonesia. We don't want people to lose face. We give advice indirectly to help them perform better. Competition is there but we are not neglecting our cultural behavior."

Challenge

Bank Bali, this year's Asian Management Award winner along with PT Astra International in the category of People Management and Development, has embarked on a specific approach to cultivate the best in its employees.

"The biggest challenge is the people, and how to organize them into a small, focused banking unit with a special growth culture," says Rudy Ramli, president of Bank Bali. "We must get the right people with the vision to make every business grow. That is the biggest challenge."

Changes were necessitated by the fast-pace developments in the world of banking prodded by the spectacular advancements in technology.

"We have taken several measures to ensure that we are creating solidarity and reliability among our employees," says Muliadi Hendri, vice president of Bank Bali. "We have an in-office newsletter, Bali Info, which gives information on developments in the bank."

These programs also include inviting guest speakers from foreign companies to give input through the Bank Bali Educational Foundation. "We provide a lot of in-house training and courses in order to change the traditional ways of thinking," Muliadi says. "We are seeking greater professionalism and higher level skills. We are undergoing a transformation from dealing with the traditional to what is needed in the world today."

Teamwork

The founding of cohesive teamwork among employees is vital to the success of Bank Bali, Muliadi says. "Teamwork is the key word. It has to be created in line with a compensation package and for that we need a good performance appraisal system. People have to know what are their particular duties within the horizontal structure we have at Bank Bali. When they see good examples set by others, this motivates them to do well."

Strong teamwork is emphasized by training as well as special interdivisional assignment. Communications among teams and divisions were emphasized. Professional ethics were also reinforced through the drawing up of a code of conduct for all employees.

The new organizational structure and job descriptions, career planning, the process of unit and individual goal setting, and the performance appraisal system were significantly strengthened and are currently in the process of implementation.

Rewards

Rewards must be given to employees who are performing well, says IGM Mantera, executive vice president of Bank Bali.

"When I first joined Bank Bali, we were still giving across- the-board bonuses to employees, regardless of their performance," he says. "We were rewarding people based on somewhat irrelevant measurements, including how long an employee had been with the company, and their punctuality in coming to the office, instead of on their productivity."

He admits that there was some "discomfit" among employees when changes were made to award bonuses based predominantly on individual performance.

"But these things had to be done to create a better structure," he adds. "We gave counseling to our employees to see what their prospects were. For employees whose performance was particularly poor, we decided to give them a golden handshake and say goodbye."

Rewards are also given in the form of the awarding of the "Si Jempol" honors, represented in the form of a smiling thumb, to teams and individuals for excellence in support services, innovation, leadership and management, efficiency, marketing, customer service, operations and loyalty.

The dubious distinction of the three poorest performing banks is also handed out every month. But Muliadi says Bank Bali recognizes that this is a spur for banks to improve. The bank also presents awards to those banks whose performance has improved significantly over a short period.

The change to a horizontal structure of management, with accompanying greater openness, is also evident in the workplace, Mantera says.

"When I first came here, everybody had their office doors closed. Today, you will find that most managers have their doors wide open for their employees."