SWA_HR_AFTA issues

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A view on HR Indonesia
In respond to HR Indonesia – SWA Supplement Nov. 2002.
Indonesia Human Resources.
I share some of the respondents (Pak Pri, Ibu Vina, Ibu Malaon, and the others) view on the
following issues.
Indonesian HR professionals (in general or most of them) are :
• Having inferiority and lack of confidence.
• Lack of required communication skills
• (Tends) to be passive
• Certificate minded instead of proven/behavioral evidences.
• Lack of self-driven learning.
• And I also agree that our HR executives should be a part of the executive committees/
board of director, not just like most of the current practices in which HRD being
treated as “a type of administrative function” instead of a strategic function.
• There is also many issues on the leadership, culture, systems and practices as well as
the regulatory factors that was said contributes towards the current issues on
Indonesian human resources.
(But somehow I got an impression that we were so easy to blame on our people, Indonesian
companies, and to some extent our government instead of doing anything relate to the
problems at least in our own environment.)
I also would like to share my view on our current HR/HR Professionals based on my personal
observation/ experience for the last 10 years with well known Indonesian and foreign
companies:
• Shareholders/ top executives are “more interested “ in short term results instead of
long term results.
• Many (if not most of our) HR Professionals lack of confidence that they are the
bridge between employees and employer; which lead to the demand to put themselves
in a balance position, one leg represent the management, and the other one represent
the employees. Otherwise the HR person (or the function) will not be able to perform
their roles effectively nor being perceived as the real professional by the
employer/employees.
• Many of us easily influenced by the new concepts/approach/jargon and easily
tempted to apply them without really get the essence (just for the shake to be seen/
perceived as having a modern/up-to-date with the current issues).
• Most of the companies are looking at HR as “cost” instead of an investment or
productive assets. Even there are many jargons that I can make a joke on it for
example :
o Human resources is the most valuable assets (that can be written off)
o All will depend on “the man behind the gun” (but we are more interested in
the “gun” instead of what behind it).
o HR is the main enabling factor/ driver towards the organization success (so
we can play on them as long as not deviate the (weak) regulations).
o HR will perform optimally if they work in totality with their body, mind, and
soul (but I’m sorry, I don’t know whether my soul is with this company or
with the next one).
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o No one is indispensable (that’s why we can get rid off anyone that we don’t
like or can’t meet our expectation and get the new one without any additional
investment for training and develop him/her).
o Etc. (I may be able to give more he…he..he..).
• I got the feeling/impression that our educationalist are aware about that but they
frequently fail to really meet what they call “link and match” between education and
the business requirement whenever I discuss with them.
In addition to that, I found that many of our HR Management specialists, educationalist, and
HR professionals seeing the HR professional issues as well as overall HR in Indonesia in a
partial perspectives (does not comprehensive enough) which is lead to a partial solution
alternatives (and at the end I believe it will not solve the issues completely or create other new
issues).
The needs for an integrated solutions for HR issues.
Please allow me to start with a model developed by Dr. Elliot Jaques, that concluded from his
40 years + study on Effective Organization1
in looking at the human resources, organization,
and systems/practices in an organization:
P = ƒ CMP x V/C x Kx/Sx
P = Performance
F = function of
CMP = Capacity of Mental Processing (similar to someone’s bucket/capacity).
V/C = Value/ Commitment (we may use the “heart” as an analogy)
Kx/Sx = Knowledge / Skills.
This may familiar to all of us if we say it “Performance is depends on some one capacity,
heart, and owned and applied knowledge/ skills”. I read the book in 1997 but I found the
book was in line with my view in seeing an organization and the human resources in it since
my first role in human resources management.
The above formula can be verbalize “ performance is the function of employee(s)’ capacity x
their value/commitment x the applied knowledge/skills in the workplace”.
Any element of the above is less than 100% has already meant the P will definitely can not be
100%.
From the SWA articles we also identified there are some other related factors such as the
stakeholders (in particular the shareholders), systems and practices (culture, habits, policy,
strategies, etc.) although not discussed in the sufficient depth.
But on top of that, we did not sufficiently discuss about the organization in which all of the
above are having its’ “playing ground”.
Jaques said that the following is interacting components of total managerial organization
systems:
1. A universally applicable organizational structure, comprising a hierarchical system
of managerial layers, a system of accountability and authority in lateral working
relationship, project teams with accountable leaders, and the establishment of
specific functions at given organization levels.
1
Dr. Elliot Jaques, Requisite Organization, Cason & Hall & Co. Publisher, Rev. Second Edition, 1996,
Arlington VA.

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2. A system of detailed managerial leadership processes, comprising: immediate
manager-subordinate leadership via team working, context setting, just-in-time task
assignment, personal-effectiveness appraisal, coaching, and merit recognition,
manager-once-removed leadership, via mentoring, career development, talent pool
analysis, and development, equilibration of subordinate managerial leadership; and
organization wide values and symbolic leadership.
3. An equitable differential structure using pay levels tied to the structure of managerial
layers, and pay bands for roles within these layers giving the bands within which
individuals are paid in accord with their immediate manager’s judgment of
effectiveness.
4. A newly-discovered system of evaluation of individual potential capability which
taken together with the person’s commitment and skilled knowledge gives entirely
new and practical meaning to the notion of getting the right people in the right
position, and for career development.
Jaques calls such conditions requisite organization. The terms requisite organization means
doing business with efficiency and competitiveness, and the release of human imagination,
trust, and satisfaction in work. These conditions are essential for the effective managerial
leadership systems in any decent free-enterprise democratic society.
The first point on organizational structure that comprising a hierarchical system of managerial
layers, definitely talking about the importance of the right structure in terms of the
accountability and authority as well as the roles – relationship among them horizontally. This
also means the needs for establishing specific functions at given organization levels
(departments/ divisions) through a business process analysis. More importantly, this
definitely will be a market/ business oriented rather than following a new approach/method
that is in the current trend.
Clearly, the second point of the requisite organizations, refer to managerial systems and
practices, including the concept of task assignment, authority delegation, human resources
development and organizational culture and value.
Third, also very obvious that we should not leave any compensation and remuneration issues
more than just a motivating factors or compulsory things, but it must ensure the fairness
among the job holders relate to their performance effectiveness.
Lastly, we have had so many approaches, methods, and also technology that will help a lot in
the individual potential capability development (and career development) to meet their
maximum capability, including how to boost their commitment in order to be able to get the
right people in the right position.
In general, we can conclude that to solve any issue on human resources in an organization,
we should not ignore any part of the systems in the process of achieving the goals.
So what?
There have been a lot of discussion/ articles/ studies on the change management, and we have
seen them in Indonesia for at least for the last ten years and getting intense with the AFTA
and globalization issues.

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The forces of change are so great that the future success, indeed the very survival, of
thousands of companies depends on how well they respond to change or, optimally they can
actually stay ahead of change.2
Without underestimating each of the change forces elements and its relationship among each
other, I would like to ask ourselves, so what! What we can we do about it?
There should be an integrated change management in the entire organization, otherwise the
partial change initiatives will only create problems in the other elements of the organization
and also means a never-ending pain of the changes.
You may have read/heard how a partial change management initiative that too much
emphasized on a single factor were frequently failed to achieve the objectives nor win the
competition, e.g. Business Process Reengineering (Down-Sizing) that focus on business
process and least attention to people side, Empowering that focus to the release of human
resources but not enough attention to the other two (organization and systems/practices),
TCQ/TQM/TPM/ISO etc. that too much focus on process and less attention to the others.
At least some of them having difficulty to adjust themselves in facing the new issues or other
issues relate with the changes that they did..
Integrated means, we must change the organization, the systems and practices, and lastly
the people inside the organization.
1. Change the organization should be based on the most effective and efficient business
process, so no more question about non-added values process or functions (at least
being minimized) represented in the job positions (boxes in the organization chart). In
particular it must also clarify the roles-relationship among the job positions, vertically
and horizontally.
2. Establish the systems and practices such as policies, standards, procedures, manual,
guideline, code of conducts, etc. to enable any organization members knowing who’s
doing what and to what level. This may also cover what we call as the corporate
culture either it is in written or just like a common/ shared values. In fact, the
systems/ practices will also reinforce (most of ) our people to behave properly in
accordance with the applied systems/ practices.
3. People development processes should not be seen as “cost-center” solely, but should
be seen more as investment for the company’s/ organization’s future. The scope of
changes/ development should encompass all the human side within organization
environment in a consistently and continuously, otherwise we may dream about the
readiness of the human resources for the near future competition/ globalization. We
may buy the technology/ systems, educate our people (for lack of knowledge), train
them (for lack of skills), but we still have to win their heart; otherwise the total
performance may never been achieved.
Back to the Indonesian human resources limited (rather than lack of ) performance and
capability, we may see it caused by two major factors either they CAN NOT or they WILL
NOT.
If they can not show/ apply their knowledge or skills since they do not have it, we can
develop them by many development options from traditional training to the hi-tech ones.
This may include the tutoring/mentoring, coaching, self development initiative supports,
apprenticeships, special project assignment (job enrichment/ enhancement), rotation, etc.
2
Berger, A Lance and Sikora, Martin J; The Change Management Handbook, Richard D. Irwin Inc.,
NY` 1994.

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If they WILL NOT perform (assume they actually have had the required knowledge/ skills)
we may trace the causes not only from individual values (e.g. job fitness) but also the internal
organization systems and practices such as leadership applied by the managers, company’s
values, systems’ fairness, challenging and fair performance effectiveness systems,
compensation and benefit, career development opportunities, etc.
As an employee, there only two basic reason to be happy:
• first, when I got the (total) pay not less than the similar role (with equal level of work
complexity) in the organization / external organization;
• secondly, when I can work at the level that match with my current / applied capability
and values.
I believe these also apply for any employee.
Having known the above, I believe that we should come into an agreement that human
resources limited performance (caused by limited knowledge, skills, and un-matched values
and working environment) can not be solved by training and development or motivating
process only. It must take into consideration and change the other influencing factors towards
human resources capability/performance in an integrated ways simultaneously.
On top of the above, stakeholders and top executive commitment towards the change
initiatives and continuous human resources and organization development is a must. (A)
visionary stakeholder(s) in specific the main shareholders and the top executives that
recognize the needs to rely on their future human resources capability relate to their business
strategy will be a very strong enables / driver for human resources development.
Otherwise, we should not expect a strong organization in terms of management and
sustainable growth since there will be a minimum opportunity to invest in human resources
and organization development or management systems and practices development. Of course
this is very obvious since those will take a relatively long terms and require financial supports
in specific.
I might not be a hundred percent right but I will be glad to discuss/ share with anyone
interested in human resources issues.
Kind regards,
NM Wijayanto
Sr. Organization Dev. Mgr. (Competency Development (Project) Leader).
e-mail address: wijayanto@sampoerna.co.id
(021) 526 7205
0812 1050 393

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