Presented in International Seminar on Public Service Delivery OECD Korea Policy Center and The Royal Government of Cambodia June 2010

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1 Implementation of Performance Management in Indonesia : Problems, Challenges and Expectation Sri Hadiati WK Presented in International Seminar on Public Service Delivery OECD Korea Policy Center and The Royal Government of Cambodia June

in International Seminar on Public Service Delivery OECD Korea

2 CONTENT 1. Introduction 2. Bureaucratic Reform 3. Implementation of Performance Management in Indonesia 4. Challenges and Expectation 5. Summary 2

3 INTRODUCTION Stepping down of Suharto s administration in 1998 has given chances for various kinds of change in Indonesia : Democratic process Amendment of Constitution Bureaucratic reform. When President SBY in power in 2004, bureaucratic problems are very complex : Inefficient Ineffective. 3

Amendment of Constitution Bureaucratic reform.

4 INTRODUCTION More systematic and comprehensive bureaucratic reform started in 2007 : Ministry of Finance as pilot project. approach Followed by Supreme Court (MA) and Financial Supervisory Board (BPK). Objective of the reform : Enhancing quality of bureaucracy through improving government system, strengthening organizational capacity, human resources and simplifying business process. of 4

approach Followed by Supreme Court (MA) and Financial Supervisory Board (BPK).

5 INTRODUCTION Progress of civil service reform proceeds very slowly after amendment of Law 8/1974 in 1999 : Civil servant is very volatile toward political intervention Little progress on improving civil service system : recruitment and selection, carrier system, training and development, remuneration, pension system, etc. 5

intervention Little progress on improving civil service system : recruitment and

6 BUREAUCRATIC REFORM Indonesian government has strong political will to reform its bureaucracy. Successful of bureaucratic reform will have a direct impact on enhancing competitiveness of national economy. To extend bureaucratic reform programs to other government institutions, currently it is designing grand design of bureaucratic reform as well as establishing Bureaucratic Reform Committee chaired by Vice President. 6

7 BUREAUCRATIC REFORM COMMITTEE Vice President will be assisted by three Coordinating Ministers, i.e. Coordinating Minister for Politic, Law and Security, Coordinating Minister for Economy, and Coordinating Minister for People s Welfare. Reform program will be implemented by Minister for Bureaucratic Reform which will be supported by : Minister of Finance, Minister of Home Affairs, Head of National Planning And Development Board, and UKP4 (Presidential Working Unit for Supervision and Controlling Development) 7

Coordinating Minister for Economy, and Coordinating Minister for People s Welfare.

8 MAIN TASK OF BUREAUCRATIC REFORM COMMITTEE COMMITTEE Enhancing quality of bureaucracy through improving government system, strengthening organizational capacity, human resources and simplifying SOP 8

9 TARGET In 2025 reform program has fully implemented both in central and local government. One of the approaches in strengtheninghuman resource management is application of Performance management system 9

10 IMPLEMENTATION OF PERFORMANCE MANAGEMENT IN INDONESIA Development of performance management in Indonesian government institution has been started in end of 1990s. NIPA can be regarded as a pioneer of developing performance management among government institutions : In 1999 NIPA had established some research centers which specifically focused on performance of various subject. Increased attention to deeply learn performance among NIPA s researchers. 10

NIPA can be regarded as a pioneer of developing performance management among government institutions : In 1999

11 RECENT DEVELOPMENT OF PERFORMANCE MANAGEMENT IN INDONESIA Currently, many central and local governments have implemented performance management in different format and formula. Both in organizational and individual performance management. Performance has been main indicator in measuring the succeed of an institution including local government agencies. In 2008, Government Regulation was issued as formal guidelines to measure the performance of local government. 11

Both in organizational and individual performance management.

12 RECENT DEVELOPMENT OF PERFORMANCE MANAGEMENT IN INDONESIA Individual performance management works slower than organisational performance management: No formal policy issued Government is still preparing policy for Individual performance management. To fulfill need for more objective performance measurement, some local governments have initiated to formulate the performance management system. Initiative mainly come from the Head of Region (i.e. Governor, Mayor or Regent). 12

13 IMPLEMENTATION OF PERFORMANCE MANAGEMENT Local Governments which have designed their own performance contract : Yogyakarta Provincial Government Gorontalo Provincial Government Yogyakarta Municipal Government Boalemo Government Etc. 13

Yogyakarta Provincial Government Gorontalo Provincial

14 IMPLEMENTATION OF PERFORMANCE MANAGEMENT Gorontalo Provincial Government has implemented performance contract, performance standard and performance evaluation since 2005 for managerial positions. Yogyakarta Municipal Government has practiced performance contract, performance review and performance evaluation since In Yogyakarta Municipal Government, performance evaluation also involves peer. 14

Yogyakarta Municipal Government has practiced performance contract, performance review and

15 IMPLEMENTATION OF PERFORMANCE MANAGEMENT More and more local governments design their own performance management system. However, most local governments still do not practice performance management system yet. They actually need some assistance in designing and implementing performance management. 15

However, most local governments still do not practice performance

16 NIPA S ROLES IN DESIGNING PERFORMANCE MANAGEMENT NIPA has initiated to design individual performance management system for Indonesian civil servants in 2001 through a series of research, workshops, seminars, study visit, etc. Concept prepared by NIPA has been adjusted with the need and context of central and local government organisations. It mainly consists of performance contract, performance review, performance evaluation and reward/punishment. 16

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

17 CYCLE OF PERFORMANCE MANAGEMENT Bonus PLACEMENT Transfer Promotion REWARD PLANNING T and D Without Bonus FOLLOW UP PERFORMA NCE ACTION Warning Transfer PUNISHMENT REVIEW AND EVALUATION T and D 17

18 CHALLENGES AND EXPECTATION Implementing performance management need prerequisites : Clearness of job and responsibilities of individual employee. No disguised unemployment in bureaucracy. Reward and punishment system work well. Certainty in career. Rotation is not done frequently. Commitment from all parties. The big challenge for government organisations which are intended to implement performance management is related to those prerequisites above. 18

Reward and punishment system work well. Certainty in career. Rotation is not done frequently.

19 CHALLENGES AND EXPECTATION Four steps to implement performance management : Initiation Step Installation Step Consolidation Step Stabilization Step. 19

20 SUMMARY Indonesia is just in an initiation step. More efforts are needed to move to installation step of performance management strategy. Indonesia government needs to take unpopular measures by : Rightsizing Distributing Budget. 20

21 Thank you 21

Structure of the Administration (political and administrative system)

Thailand Performance Management 1. Introduction Structure of the Administration (political and administrative system) Since the declaration of the first constitution in 1932, the politics and government