Sincerity key human resources quality

Sincerity key human resources quality

By Bob Widyahartono

JAKARTA (JP): As we enter the APEC era, the question for many
Indonesian businesses is not "what is the newest, or best,
technique in human resources development (HRD)?" but "are they
sincere in HRD, professionally?"

Can they claim that, with regards to HRD, their organizational
capacities and capabilities are solid enough to meet the
challenges of entering into alliances with partners from
Indonesia and also from the Asia Pacific on a "win-win" basis.

If the answer is "yes" then there is ample reason to believe
that many Indonesian businesses will have meaningful long-term
relationships. On the other hand, if the answer is still unclear,
then there is little chance that HRD will be of immediate
benefit. Although some business organizations are becoming more
enlightened in their treatment of workers in several sectors,
they are also demanding greater returns on their investments.

Markets are growing more competitive. Alliances will be
necessary to maintain market share and growth in market share.
Indonesian businesses have no other choice but to become more
productive and efficient if they want to prosper in the APEC era.
It is not that their CEOs (Chief Executives of the Organizations)
do not appreciate the value of a high-value working environment.
In order to create an atmosphere in which members of the business
can self-actualize, there must first be sufficient profit in the
business to ensure its survival.

So much has been discussed among government officials,
academicians and prominent leaders in the business community.
There is a sense of eagerness to make the Jakarta APEC meeting
next week successful. Are the business community members,
particularly the medium scale enterprises, well enough prepared
to cooperate with their prospective partners from the Asia
Pacific?

In their second report the Eminent Persons Group of APEC
mentioned that "... Among APEC member economies, the ASEAN
countries and China now enjoy the highest growth rates...
However, these economies already face bottlenecks to further
growth in public infrastructure such as transportation and
telecommunications, and in technical and managerial skills... A
high priority on the APEC agenda must be given to technical
cooperation on public infrastructure, competent small and medium
enterprises (SMEs) and education and human resources development.
All of these complement market-driven integration and enhance the
effects of trade and investment liberalization and
facilitation..." Inevitably private businesses will be the main
players in the APEC era. Are they ready for it?

Many individual business entities of whatever size have argued
that their personnel departments were formed, and to this day, to
recruit new employees, to make up payrolls and to pay personnel
expenses. In many business organizations, employees were, and
still are, treated as production parts. Although a number of
organizations are now more enlightened in their treatment of
people, old attitudes have not completely disappeared.

Many business organizations are still family businesses. Their
personnel departments (not referred to as human resources
departments) are staffed by those non-family members who could be
released from the "more important functions" of manufacturing,
marketing and or finance.

In effect these personnel departments often become a "dumping
field" for the organization's casualties. These personnel
departments are merely assigned to recruiting, recording, and
administrating payments as determined by the CEOs or owners.

In any business organization, the human resources department
should be a system. Its primary subsystems are staffing,
planning, employee relations, compensation and benefits, training
and development. It is imperative for them to take time to
formulate and explain the organizational philosophy. The human
resources department's philosophy is derived from an
organizational philosophy, which in professional business is as
follows:

1. Human resources exist in any organization because they
provide a necessary function at a competitive cost;

2. Human resources' mission is to enhance the productivity and
effectiveness of the organization as it relates to both people-
people and people-system;

3. Human resources should drive the organizations' management
in regard to people issues;

4. Human resources is a professional function, staffed by
people dedicated to the development of employees in ways which
are satisfying to the individual and beneficial to the
organization.

Once this kind of philosophy has been formulated, the next
step is to work out a set of values which fit the philosophy.
Values are social customs or ideals which a group regards as
positive of negative. Behavior of employees is and should be
closely related and therefore business should lay down a list of
acceptable and expected attitudes of employees in whatever
position. Behavior is role determined and a proper description of
behavior is required.

Ideally, organizations should have values such as: allowance
for risk taking and mistakes, high standards of performance,
loyalty, proactive/initiating and personal responsibility and
business ethics as well as social responsiveness. Exercises in
formulating a philosophy, developing organizational values which
everyone in the organization can accept, and describing related
behavior could be very useful since this will commit employees to
the business objectives.

As we enter the APEC era, business operations will grow and
become more complex. CEOs and owners will find themselves faced
with problems in a system that once awarded family ties more than
professionalism. Medium and large enterprises will gradually
become more aware of the challenges in their internationalization
process.

Since the mid 1980s, the Indonesian private sector has become
a major player in integrating regional economies. But as part of
the Asia Pacific region, can the medium scale enterprises, which
make up the majority of Indonesian business, live up to their
rich promises as a booming region, home to the fast growing
economies?

In the APEC era, I anticipate that the regional business
scene will be dominated by multinationals that are owned by East
Asians, Japanese and Chinese stockholders.

So far in this region, American capital will still be present.
Their shares however will be significantly smaller although they
are making every effort to invest. Capital formation streams in
the region will be spearheaded by East Asians with their
networking, which becomes increasingly professional and utilizes
modern information technologies. They are flexible in employing
host country nationals as executives, even at the highest
management levels, rarely the case with American or western
enterprises investing in the Pacific region.

For Indonesia, business ideas and techniques will become more
Asian and less western in the areas of information and process
technologies, manufacturing and service sectors. The critical
issue faced by our private sector is what human resources
qualifications are required in the transformation from
traditional ways of doing business to modern and professional
ways.

The issue remains: where to find the right caliber executives
in individual enterprises since up to date, only a handful of
firms are ready to meet the challenge of APEC. For a start there
should be a change in the thinking of owners that human resources
heads should become members of the management team, reporting
directly to the CEO and with a deep understanding, as well as
experience, in corporate objectives and philosophy. They will
have to understand marketing, segmentations and the financing of
firms in order to help define the human resources needed in the
APEC era.

By understanding the changes and challenges ahead they will be
in a position to collaborate with CEOs in order to identify,
train and develop managers needed by the firm. As mentioned
earlier, the most promising stars are very seldom assigned to
human resources management, although the importance of human
resources development is becoming crucial to enterprises.

What is needed by our medium size enterprises are human
resources executives with a compelling vision of the future of
the enterprise. Also needed are executives who communicate more
frequently with employees, link compensation to individual
performance, promote management training and development and plan
for management succession in the future. Herein lies the
challenge for change and growth of medium size enterprises in the
APEC era.

It will be a long journey for Indonesian businesses, but also
a very interesting one, particularly as they prepare themselves
for the realization of "free and open trade and investment in the
area (Asia Pacific)" as stated in the principles of the
multilateral GATT system.

The writer is dean of the Faculty of Economics at Indonusa Esa
Unggul University, Jakarta.

Window A: As we enter the APEC era, business operations will grow and
become more complex.

Window B: What is needed by our medium size enterprises are human
resources executives with a compelling vision of the future of
the enterprise.