Institut Teknologi Bandung, Indonesia
Email: [email protected]
|
Abstract |
|
Keywords: Balance Scorecard, Key Performance
Indicators, Financial Perspective, Internal Business Perspective, Customer
Perspective, Learning & Growth Perspective |
*Correspondence
Author: Ainun Adhelia Fitri
Email:
[email protected]
INTRODUCTION
As
an archipelago, Indonesia has significant advantages in the tourism and
creative economy sectors. Both sectors play a significant role in the
Indonesian economy. Based on a report from the Ministry of Tourism and Creative
Economy published in September 2024, the performance of the tourism sector
until the first semester of 2024 has contributed a tourism foreign exchange
value of US$10.46 billion to US$13.08 billion and has succeeded in contributing
to Tourism GDP of 4.5% (Adiprasetio et al.,
2023; Indrayani et al., 2023). This success needs to be
supported by the growing employment to increase further. Therefore, tourism has
great potential to expand employment.
The
development of the tourism sector has not escaped the limited human resources
that have occurred due to the COVID-19 pandemic (Katunian, 2019;
Sejdiu et al., 2023). Based on the results of
Sakernas in 2018-2021, the percentage of tourism labor based on its sub-sectors
is diverse. Unlike other tourism subsectors, the Other Tourism Service
Provision subsector related to special tourism service activities and event
arrangements has a labor contribution that has decreased from 2020, which
initially had a percentage of 1.60% and only 1.48% in 2021. This needs to be a particular
concern because, according to data from the Ministry of Tourism and Creative
Economy, one of the five main factors that can increase tourist movements in
2024 - 2025 is the organization of events, which is 35.90% (Awuchi et al.,
2022; Zaidel et al., 2020). This opens up business
opportunities for businesses that provide event organizer services, and
therefore, businesses engaged in event organizing or MICE services are also
very competitive.
With
such competitive competition, each company must be able to compete by providing
high-quality services (Fang & Casadevall,
2015; Orosz et al., 2018). One of the factors that can
be used to achieve this is the quality of each individual who works in the
company. The quality of each individual must be measurable through competence
and willingness to be dedicated to the company. Therefore, employee performance
appraisals that have been adjusted and use clear parameters and KPIs (Key
Performance Indicators) are needed to manage employees better. A measurable
performance appraisal can help achieve the company's vision and mission.
In
the event organizer industry, there are unique characteristics. This industry
requires high flexibility and often has irregular working hours (Heffron et al.,
2020; Seimon & Endagamage, 2022). This results in a high incidence
of overtime and, if not handled with a transparent work appraisal system, will
also impact employee productivity, accountability, and motivation. Worse still,
if employees feel this is a serious and personal matter, they could opt out of
the company or even the industry. These negative impacts go hand in hand with
high financial costs, increased stress within the work unit, and decreased
quality, competitiveness, innovation, and productivity of a company (Ziky &
El-Abdellaoui, 2023). These challenging issues
affect one of Bandung's event organizer businesses, Arcana Indonesia or PT Jati
Miara Kasae.
PT
Jati Miara Kasae, with the brand name Arcana Indonesia, is one of the companies
engaged in event organizing specializing in MICE (Meetings, Incentives,
Conferences, and Exhibitions). Since its first appearance in 2017, Arcana Indonesia
has provided several service products, such as launching programs, MICE
programs, event programs, live streaming programs, and merchandise. Arcana
Indonesia has had regular customers for the past 7 years, namely BUMNs with
headquarters in Bandung, namely PT KAI and PT Bio Farma. As of October 2024,
Arcana Indonesia has 21 in-house employees, and every time there is an event,
they recruit at least 25 additional freelancers. Based on data owned by the
company, in 2024, 9 in-house employees chose to resign.
Table 1. Arcana Indonesia Resignation Data
for 2024
|
Arcana Indonesia Resignation 2024 |
||
|
Month |
Number of Resignation |
Role |
|
January |
0 |
- |
|
February |
0 |
- |
|
March |
0 |
- |
|
April |
0 |
- |
|
June |
0 |
- |
|
July |
2 |
Junior Creative |
|
August |
3 |
Junior Creative |
|
September |
3 |
Junior Creative |
|
October |
1 |
Creative |
(Source:
Arcana Indonesia, 2024)
Based on observations from the
results of exit interviews held by Arcana Indonesia, most employees choose to
resign due to the absence of work balance with employees' personal lives. Even
so, from the results of observations of the environment in Arcana Indonesia
when viewed in terms of payroll, Arcana Indonesia applies a basic salary system
that is at a minimum by the Decree of the Governor of West Java
No.561.7/Kep.804-Kesra/2023 which is IDR 4,209,309 plus health benefits and
incentive bonuses when there are events that the employee handles. Furthermore,
the company provides a career path, but the assessment is subjective based on
the COO and owner. As a result, Arcana Indonesia currently uses a very
subjective employee performance appraisal. This is certainly an unpleasant
thing for some employees, especially new ones because they cannot objectively
know the feedback and assessment of their performance. This incident will be unfair
to employees who have a high rate of overtime cases, especially in the event
organizer industry, which demands high flexibility.
Thus, to retain employees,
develop the company, and compete with other companies, Arcana Indonesia needs
to make the most basic improvements and reforms first, namely by measuring the
performance of its employees, which will impact the overall performance of the
company. In addition, a clear performance appraisal system can also be used as
a tool to recognize overtime or additional workload.�
With unique challenges in the
event organizer industry, such as high workloads, irregular schedules, and high
turnover rates, Arcana Indonesia needs a structured performance management
system (Plard & Martineau, 2022; Raymark S. Pabilando et
al., 2022).
Balanced Scorecard (BSC) is a perfect fit for Arcana Indonesia because of its
comprehensive approach. Unlike traditional performance appraisal methods
focusing only on the financial side or individual output, BSC looks at
performance from four perspectives: Financial, Customer, Internal Process, and
Learning and growth. So, it is not just about profit or efficiency but also
employee engagement, process improvement, and skill development, all of which
are important for performance in a dynamic work environment like an event
organizer.�
In addition, BSC helps Arcana
Indonesia align individual and team goals with the company's big vision. So,
employees know what to achieve and understand where they are going, which can
motivate them despite sometimes stressful situations. With the Balanced
Scorecard, Arcana Indonesia has a more systematic way to manage employee
contributions effectively and remain flexible according to the needs of event
organizers.
The purpose of this study is to
analyze and evaluate the effect of a structured performance management system,
such as the Balanced Scorecard (BSC), on employee performance in the event
organizing industry, specifically at Arcana Indonesia. Theoretically, this
study is expected to add to the repertoire of knowledge about the application
of BSC in the context of the creative and tourism industries, as well as
provide empirical evidence regarding the importance of objective and
transparent performance appraisals. Practically, the results of this study are
expected to provide recommendations for Arcana Indonesia management in
developing effective human resource management strategies, so as to increase
employee productivity, motivation, and retention, and support sustainable
company growth.
RESEARCH METHODS
This chapter outlines the
techniques employed within this study, the methodology of data collection and
treatment for answering all the research questions. The main purpose of this
research is to examine how PT Jati Miara Kasae, or Arcana Indonesia, measures the
performance of its employees. Besides, this research also seeks to find out the
reasons why many employees are willing to leave and how a fitting Balanced
Scorecard system could be designed for the organization. The expectation is
that the Balanced Scorecard can be a measure that assists organizations in
improving job satisfaction while employee turnover remains low.
This research uses a
qualitative approach to explore in-depth understanding of the performance
appraisal system at Arcana Indonesia, focusing on the perspectives of
management and employees (Cheron et al.,
2022). This method was chosen
because it provides space to explore the experiences, opinions, and perceptions
of individuals that are difficult to measure through quantitative data. Data
was collected through in-depth interviews with employees and managers who have
a direct understanding of the existing evaluation system. A qualitative
approach allows researchers to construct richer and more contextualized
narratives, which can describe social dynamics as well as factors that
influence job satisfaction and employee intention to leave. With this approach, it is
expected to reveal the main themes that cause dissatisfaction and turnover
intention, as well as more applicable recommendations for improving the
evaluation system in the company.
This chapter has three parts.
The initial section, Research Design includes all the objectives of the
approach applied, including the justification for using mixed methods in this
study. The next section, Data Collection Methods, speaks about the types of
data used, methods of data collection such as interviews and questionnaires,
and the importance of these data in meeting research�s aims. At last, the Data
Analysis Methods part explains such processing of the data that makes it
possible to address the research questions thoroughly in terms of the
qualitative and quantitative analysis of the data.
RESULTS
AND DISCUSSION
Analysis
In this chapter, research
results obtained from in-depth interviews with management and employees at
Arcana Indonesia will be presented and analyzed to identify factors that
influence performance appraisal and employee exit intentions. This analysis
aims to reveal key findings that will form the basis for formulating solutions
for the improvement of the company's performance appraisal system.
This analysis process uses a
thematic approach, where the interview data obtained will be grouped into main
themes relevant to the problems faced by the company, namely: job satisfaction,
communication with superiors, workload, and compensation. The investigation
will also examine trends that show up in the connection between these
parameters and the intents of employees to leave.
The characteristics of the
respondents who took part in the interviews should be briefly described before
starting to analyze the key findings. Gaining insight into the respondents'
backgrounds allows to better examine their viewpoints and contextualize the
results. Therefore, the following section will present demographic information
about the interview respondents, including their job titles, duration of
employment, and experiences with performance appraisals and factors driving
exit intentions.
1.
Presentation of Findings
Based on data analysis
utilizing the coding approach, the results from the interviews will be
presented in this section in a structured and thematic manner. In order to
identify the key concepts or ideas that are pertinent to the research issue,
the transcribed interview material is first subjected to an open coding
process. These key concepts will then be grouped and subjected to additional
analysis in the axial coding step in order to identify connections among the
concepts discovered. The categories that have been created will then be
integrated in the selective coding stage to create main themes that can address
research questions on Arcana Indonesia's performance appraisal system and
employee departure intentions.
Three primary respondents�the
Chief Operating Officer (COO), Project Manager (PM), and Creative Staff�were
interviewed. The results offer a variety of detailed insights into how the
company's performance appraisal system is implemented, as well as how it
affects employee exit intentions and job satisfaction. Despite the fact that
the three responders have varying positions and backgrounds within the company,
their results are extremely pertinent to highlighting the difficulties
businesses encounter in enhancing the efficacy of their current performance
review processes.
a. Open Coding
At this stage, the data
obtained through interviews with COO, Project Manager (PM), and Creative Staff
at Arcana Indonesia have been analyzed using open coding. The purpose of this
process is to identify key categories relevant to the research topic,
specifically regarding performance appraisal, feedback, employee turnover, and
career development. Each interview provided different insights related to how
Arcana Indonesia manages performance appraisals, as well as factors that
influence employee turnover rates.
Based on the results of open
coding, several main categories emerged that can be classified into major
themes. The following are the findings presented in the form of a table linking
the main categories based on the interviews conducted.
Table 2.� Key Findings Based On Open Coding
|
Category |
COO Interview |
PM Interview |
Creative Staff Interview |
Direct Quote |
|
|
Performance Appraisal |
x |
x |
x |
"Di Arcana, kita nggak
pakai sistem penilaian yang formal banget sih." (COO) "Penilaian kinerja tuh
nggak ribet banget." (PM) "Sistem penilaian
kinerja yang ada sekarang tuh oke, cuma mungkin ada beberapa bagian yang
perlu lebih jelas." (Creative Staff) |
|
|
Feedback |
x |
x |
X |
"Feedback itu penting
banget, tapi kurang jelas." (COO) "Feedback itu aku kasih
langsung di tengah event." (PM) "Feedback jelas banget
mempengaruhi motivasi aku." (Creative Staff) |
|
|
Expectation Clarity |
x |
X |
|
"Kadang ada karyawan
yang merasa kalau mereka nggak tahu pasti apa yang kita harapkan dari
mereka." (COO) "Penilaian kinerja
lebih fokus ke apa yang mereka lakuin selama event." (PM) |
|
|
Work Motivation |
|
x |
X |
"Kalau mereka kerja
keras, dan mau belajar, itu udah cukup buat kita." (COO) "Feedback positif bikin
kita lebih semangat." (PM) "Kalau feedbacknya
positif, itu bisa banget ningkatin motivasi mereka." (Creative Staff) |
|
|
Work Life Balance |
x |
x |
x |
"Beban kerja yang
terlalu banyak, tapi nggak diimbangi dengan keseimbangan hidup yang baik."
(COO) "Kalau lagi peak
season, kerjaannya kan nggak cuma di kantor, tapi sering lembur juga."
(PM) "Kerja di dunia event
itu capek banget." (Creative Staff) |
|
|
Employee Turnover |
X |
|
|
"Dari 8 orang
probation, yang bertahan sampai sekarang cuma 2 orang." (COO) |
|
|
Teamwork & Collaboration |
|
X |
|
"Kerjasama juga kunci,
soalnya kalau timnya kompak, semuanya jadi lebih lancar." (PM) |
|
|
Career Development |
|
|
X |
"Menyediakan pelatihan
atau rencana pengembangan karier akan membuat karyawan merasa ada peluang
untuk berkembang." (Creative Staff) |
|
|
Non-Material Awards |
|
|
X |
"Kadang pengakuan aja
udah cukup buat bikin kita merasa dihargai." (Creative Staff) |
|
|
Workload Management |
|
x |
|
"Kalau ada yang
performanya bagus, biasanya aku kasih tanggung jawab lebih besar." (PM) |
|
|
Communication |
x |
X |
|
"Kadang keputusan atau
arahan nggak tersampaikan dengan jelas." (COO) "Komunikasi itu penting
banget, karena di event semua pihak harus ngerti apa yang harus
dilakuin." (PM) |
|
|
Feedback System |
|
x |
|
"Sistem evaluasi yang
ada mungkin jadi salah satu faktor penting yang mempengaruhi turnover."
(COO) "Feedback-nya itu
membangun, ya." (PM) |
|
Source: (Author, 2024)
Interviews with the COO, PM,
and creative staff after open coding indicate that Arcana Indonesia is still
applying an informal method for employee performance review. As noted by the
COO, the company's assessment process is more reliant on direct observation and
intuition in the absence of a very established system. This creates confusion
in expectation elements they communicate to employees because not all
assessment indicators are sufficiently numeric or clear. Lack of clarity may
create a vacuum among workers about their responsibilities which might lead to
discontent in motivation at work.
There is also the fact that, according
to the project manager, the current performance evaluation system is heavily
geared towards group activities and performance within events. There is as yet
no formal means of evaluating the performance effects on individual employees.
Hence, the evaluation is becoming more subjective and dependent on the opinion
of each management. However, even though the creative personnel consider the
existing approach as satisfactory, it calls for more overt and quantifiable
indicators in order that they can feel assured that their outputs are equitably
evaluable.
While some interviews
revealed, extensive workloads, and a poor work-life balance at Arcana Indonesia
contribute significantly to employee attrition. Many of the staff quit because
they thought that they did not have time for their personal life, especially
during busy times, according to the COO. High turnover rates result from
employees viewing themselves as overworked during uneven workload distribution.
Poor management at events is also noted by the PM as a primary contributor to
employee burnout, which also affects retention.
Another factor that aggravates
the problem is the absence of workplace advancement. Employees often feel
trapped-for-the-money and within clear development tracks as Creative Staff
indicated. Critics who do not have their criticism made clearer may also
perceive comments made toward them as the company does not value them anymore,
and they become at a greater probability to quit the company.
Inevitably, the findings from
the analysis exposed several of Arcana Indonesia's long-standing flaws, such as
ambiguous performance reviews, a lack of constructive criticism, and serious
imbalance in life-work aspects. These phenomena are mutually dependent in
generating the high employee turnover rate. Thus career development and job
incentive should be taken into serious consideration to ensure better employee
retention going forward. The author will further analyze the results from open
coding using axial coding to build an inquiry on the underlying connections
between categories.
b. Axial Coding
Axial coding, the next step of
open coding, groups these categories together to help illustrate how the
connections between them might clarify the phenomena under study. The
categories discovered�the general trends that could explain Arcana Indonesia's
issues with staff turnover, performance reviews, and feedback�will be further
examined using axial coding. A better understanding of the relationships and
mixing of the indicated categories inside the organization may then be obtained
from the results of this axial coding.
Table 3. Axial Coding
|
Category |
Related Category |
Nature of Relationship |
|
Performance Appraisal |
Feedback, Clarity of
Expectations |
The lack of structured
performance appraisal leads to unclear feedback for employees, resulting in
uncertainty regarding expectations and decreased motivation. |
|
Feedback |
Employee Motivation,
Turnover |
Unclear or unconstructive
feedback can make employees feel undervalued, leading to low motivation and
higher turnover rates. |
|
Work-Life Balance |
Turnover, Job Satisfaction |
High workload without proper
work-life balance leads to employee burnout, causing high turnover rates and
low job satisfaction. |
|
Employee Motivation |
Performance Appraisal,
Feedback |
Motivation is highly
dependent on clear performance appraisal and constructive feedback. The lack
of both can lead to low motivation and higher turnover intention. |
|
Career Development |
Turnover, Employee
Motivation |
The lack of career
development opportunities reduces motivation and increases turnover, while
clear development prospects enhance employee engagement. |
|
Workload Management |
Work-Life Balance, Turnover |
Poor workload management,
especially during peak seasons, leads to imbalance between work and personal
life, increasing turnover and decreasing work-life balance. |
Source: (Author, 2024)
This pattern of results from Axial Coding shows
that Arcana Indonesia's staff turnover closely relates to job motivation,
work-life balance, performance reviews, and feedback, all wrapped in an
intricate way. This pattern suggests that the performance appraisal system
itself is discriminatory and it affects employee feedback which consequently
affects job motivation and contributes to high turnover rates.
The particularly imprecise feedback with
non-structured performance review leads to what many call "breakdown in
the communication between staff and management." When performance
assessments are not based on solid indicators, COOs and PMs claim that workers
become unsure about what is actually expected from them by their bosses.
Through this ambiguity, employees feel unvalued or don't know how to improve,
resulting in low job motivation as well.
As a matter of fact, the inconsistent and often
unhelpful feedback demotivates employees and is a crucial factor in driving
them away from their workplace. Employees become less interested in doing
better or worse as a result of receiving no clear and encouraging feedback,
thus prompting them to go searching for opportunities at other businesses where
they might receive explicit-coaching recognition.
Moreover, the data from this research study closely
aligns with increased turnover levels at Arcana due to highlighted work-life
balance inadequacies. According to COO and PM, too much work for employees -
especially during a peak season - has an effect on their well-being, then
leaving them after some time. Again, it has extreme workload, which states
development returns by cause that life becomes unbalanced and less satisfied
about the job, although more supposedly quitting urge. The result is also
considered as a very vital factor for people retention and motivation. They
feel bored by this lack of career-growing opportunities - not at any rate
exciting in a place without challenge and no openings for climbing up the
management ladder. Without a clear evolution pathway, it can signal that there
is no possible advancement and prove that such employees will begin looking
outside organizations for other positions. From Axial Coding Results, we can
move towards Selective Coding, which will filter and narrow down to the most
pertinent main categories to research objectives.
c.
Selective Coding
The revelation of the various interrelated
categories on the findings from the open coding and axial coding was meant to
explain the major issues of staff turnover and performance reviews in Arcana
Indonesia. Below mind map summarizes these findings and shows interconnections
of categories strongly related to the challenges of the organization.
Figure 1. Selective Coding Mind Map
Source: (Author, 2024)
Based on the data, it can be said that Arcana
Indonesia now conducts performance reviews in a less formal manner. Generally,
company performance assessments are based on personal judgment and intuition
rather than an organized or clear indicator-based methodology. The COO
clarified that because these evaluations don't make reference to certain
performance metrics, employees receive ambiguous feedback and don't know what
is expected of them. As per this idea, Arcana Indonesia should take a more
organized way in conducting performance appraisal and adopt something like a
Balanced Scorecard to gauge an employee's performance from various aspects
(self-development, teamwork, customer satisfaction, etc.). This will, hence,
provide more clear and precise feedback to the organization and create a more
complete picture of employee performance. With this in mind, it could really
help Arcana Indonesia a lot to adopt a very systematized approach to holding
performance evaluations, perhaps a Balanced Scorecard, which may account for
self-development, teamwork, customer satisfaction, and other criteria. This
would facilitate feedback from the organization to its employees in a clearer
manner and a very complete picture of their performance would be made
available.
Arcana Indonesia's excessive workload, lack of
work-life balance, and lack of professional growth chances are some of the
major characteristics linked to turnover that were found in the Selective
Coding results. The COO and PM stated that a lack of balance between their
personal and professional life led to burnout, which resulted in the
resignation of numerous staff. Lack of performance recognition and ambiguous
feedback also contribute to low motivation, which in turn causes high turnover.
Thus, better work-life balance, better task management, and more defined career
development can all contribute to lower turnover rates in businesses.
d.
Competitor Analysis
The author uses competitor analysis to analyze in
general how competitors in related industries can manage their performance
appraisal systems and what competitors are doing in facing similar challenges.
The process of identifying competitors in this study was obtained based on
informal information from the COO of Arcana Indonesia. However, it should be
underlined that this competitor analysis has limitations, so that the
competitors obtained are not direct competitors who focus on the service
products offered, namely as the main focus of Arcana Indonesia is MICE. This
analysis is also obtained from in-depth interviews from a resource person who
is an employee of the company. For this reason, the names of competitors and
interviewees will be disguised in this analysis. The competitor's name will be
disguised with the initials AE while the interviewee will be disguised with the
initials SY.
AE is a company engaged in event organizing from
Bandung which was established in 2014. The products offered by AE are creative
agency, social movement creator, creative festival promoter, and concert. AE is
famous as the creator of the largest annual music event in Indonesia which
carries the concept of 90s artists. In the event, not only the artists are 90s
artists, but they also create the atmosphere and feel of the 90s through games
and all aspects that existed at that time. In addition to these events, AE is
also well known as a promoter of solo concerts from other internationally
renowned artists. In 2024, AE created a festival that featured artists from the
2000s. The event was successfully held in November in Jakarta. For the plan in
2025, AE will organize 2 solo concerts from other international artists.
Although AE as an event organizer has been quite
successfully recognized by the general public, AE also faced difficulties in
2020 due to the COVID-19 pandemic. As happened in Arcana Indonesia, AE also
faced problems in employee management after the pandemic occurred. Therefore,
the following competitor analysis table is presented which aims to compare
competitors with Arcana Indonesia.
Table 4. Comparison of Competitor Analysis
|
Aspect |
Competitor�s Information |
Arcana Indonesia�s Information |
Analysis Notes |
|
Performance Evaluation (KPI) |
Uses KPIs with monthly targets for each position
to evaluate employee performance. |
KPIs are not formally structured; performance is
evaluated based on project/event outcomes. |
Competitor has an advantage with structured KPIs.
Arcana can improve by implementing measurable, outcome-based KPIs. |
|
Employee Turnover |
High turnover due to project/event-based hiring.
Mitigation: contracts employees for multiple events. |
High turnover as well, with 9 employees resigning
within 3 months (July-September 2024). |
Both face similar challenges. Arcana can consider
adopting project/event-based hiring for greater flexibility and cost
efficiency. |
|
Work System |
WFO Monday-Friday (09:00-17:00), with WFH option
2 days/week for some employees depending on workload. |
WFO Monday-Friday (10:00-18:00) with no WFH
option. |
Competitor offers more flexibility with WFH
options. Arcana could explore hybrid work to attract more talent and increase
employee satisfaction. |
|
Training & Development |
No formal training, but identifies potential
employees for challenging roles in future events. |
Provides basic training for new employees but
lacks long-term skill development programs. |
Arcana has a slight edge with basic training.
Both need to focus on long-term employee development and skill enhancement
programs. |
|
Work Environment |
Supportive, flexible, and dynamic work
environment; needs improvement in office facilities and equipment. |
Flexible work environment focused on
project/event completion. Office facilities are relatively adequate. |
Arcana has an advantage in office facilities.
Competitor excels in creating a more dynamic and supportive work environment. |
Source: (Author, 2024)
Looking
at the results of the analysis Arcana Indonesia has advantages in the field of
office facilities and basic training held for new employees. On the other hand,
competitors also have other more fundamental advantages, namely KPIs and a
flexible work environment including work from home work schemes. Therefore,
there is still room for improvement for Arcana Indonesia by observing,
imitating, and modifying the insights gained from competitors.
2.
Business Solution
Based
on the results of the analysis that has been done, Arcana Indonesia has great
potential in this industry. This is in line with what is described by the COO
of Arcana Indonesia through the following quote regarding the intensity of events
in one week which is very high:
�Kalau lagi rame, eventnya
seminggu bisa tiga event.�
With
the high intensity of existing events, it certainly also affects the high
workload. Therefore, it is unfortunate if the performance appraisal is still
unstructured which will ultimately lead to turnover intention. The urgency to
have a structured performance appraisal system is also reinforced by the
statements put forward by the COO as follows:
�Kalau
menurut aku, sistem penilaian kinerja yang ada mungkin jadi salah satu faktor
penting yang mempengaruhi turnover di perusahaan. Meskipun kita nggak pakai
sistem yang formal banget, kadang ada karyawan yang merasa nggak puas dengan
cara kita menilai mereka. Jadi, kalau penilaiannya cuma berdasarkan attitude
dan kerja keras tanpa ada indikator yang jelas, bisa jadi mereka merasa nggak
dihargai atau nggak tahu harus bagaimana untuk berkembang. Ke depannya, kita
mungkin perlu sistem penilaian yang lebih terstruktur dan transparan, biar
karyawan bisa lihat perkembangan mereka dan tahu apa yang diharapkan dari
mereka. Dengan sistem yang lebih jelas, mereka bisa merasa lebih dihargai dan
termotivasi untuk terus berkembang, sehingga bisa menurunkan turnover.�
Therefore,
the Balanced Scorecard is the right solution to overcome the problems in
structuring the performance appraisal system. As what has been described in
Chapter 2 in this study, the application of the Balance Scorecard proposed by
Kaplan & Norton (1996) is one of the tools that can help create a more
structured appraisal system. The Balance Scorecard can provide a more holistic
picture of employee performance by combining several important perspectives,
such as finance, internal processes, client satisfaction, and employee
development. By using the Balance Scorecard, Arcana Indonesia can assess
employee performance not only based on final results, but also taking into
account non-financial factors that affect the company's success. The hope is
that this solution will provide a more objective and structured assessment, which
in turn will increase employee motivation and reduce turnover. This is also in
line with the direct quote from COO Arcana Indonesia in his statement as
follows:
�Sebetulnya,
aku cukup tertarik sama konsep BSC, karena itu bisa memberikan pandangan yang
lebih menyeluruh tentang kinerja karyawan, bukan cuma dari hasil akhir doang.
Di Arcana, kita kan lebih fokus ke sikap dan kontribusi mereka, jadi kalau BSC
bisa menambahkan aspek lain kayak pembelajaran dan pengembangan diri, mungkin
itu bisa membantu kita melihat perkembangan karyawan dengan cara yang lebih
objektif. Mungkin bisa ditambahin juga sama KPI nya ya, karena sekarang ini
kita belum punya KPI jadi selain belum ada alat yang terstruktur, kita juga
belum punya KPI nya.�
Therefore,
the solution that will be offered to Arcana Indonesia in overcoming existing
problems related to the performance appraisal system and turnover intention is
to create a Balance Scorecard and Key Performance Indicator. The making of the
two tools is also generated from the company's internal data and competitor
analysis that has been done before.
a.
Designing The Balance
Scorecard
Based
on previous information and analysis, the Balance Scorecard design stage will
be divided into four stages, namely; designing Arcana Indonesia's strategic
objectives, performance indicators and strategic mapping, weight areas, and
value description.
1) Designing
Arcana Indonesia�s Strategic Objective
In the first stage to
create a Balance Scorecard, companies need to first formulate what are the
measurable and clear strategic objectives for each perspective in the Balance
Scorecard. Of course, the goals made also need to be in accordance with the
company's vision and mission so that these goals can support the long-term
goals of Arcana Indonesia. Based on the data that has been obtained and the
results of the company's internal discussions, the company's strategic goal
design is as follows:
Table 5. Proposed Strategic Objectives
|
Perspective |
Strategic Objectives |
|
Internal Process |
Implemented a freelancer
management system with a target of 60% utilization rate in 3 months. |
|
Financial |
Increase profit margin per
event by 15% in 12 months. |
|
Customer |
Added 5 new B2B clients per
quarter, mainly from the campus segment. |
|
Learning & Growth |
Achieve 80% employee
satisfaction and reduce turnover rate by 15% in 12 months. |
|
Develop 2 new products for the
campus market and make IDR100 million in 12 months. |
Source: (Author, 2024)
2) Designing
Performance Indicators and Strategic Mapping
Performance
Indicators (IK) are obtained after conducting literature reviews and
conversations with management. The success rate of a company's strategy is
measured using relevant IK. Each set strategic objective (ST) must be
represented by at least one IK in order to be measured appropriately. In this
context, it is important to ensure that the indicators chosen truly reflect the
goals that the company wants to achieve.
The Internal Process
Perspective has three clear STs, namely implementing a freelancer management
system with a target utilization rate of 60% in three months, optimizing
freelancer costs per event, and improving the quality of project management. On
the other hand, the Finance perspective also has three STs, including
increasing profit margin per event by 15% in 12 months, managing operating
costs more efficiently, and increasing revenue from new products. In addition,
the Customer perspective establishes three STs, which include adding five new
B2B clients each quarter, increasing customer loyalty, and increasing customer
satisfaction.
This strategy mapping
shows how the four perspectives in the Balanced Scorecard (BSC) are
interconnected to achieve the company's grand goals. Starting from Learning
& Growth, the main focus is to make employees feel happy, with a
satisfaction target of 80%, and reduce turnover rates so that they feel at home.
This became the basis for better organizing the internal system, coupled with
the launch of two new products aimed specifically at the campus market, which
is expected to be a breakthrough to gain new revenue.
Furthermore, from the
perspective of Internal Processes, efficiency is a major concern. From a
freelancer management system that targets a 60% utilization rate to cost
optimization to make everything more efficient while still running as planned.
This clearly impacts the Customer Perspective, which will increase customer
satisfaction and loyalty. Finally, all of these steps contribute to the Finance
perspective, with a target of increasing profit margins by 15% per event, plus
additional revenue from new product launches.
3) Designing
Weight Area
Once
the relationship between the strategic objectives and their mapping has been
designed, the next step will entail determining the KPIs (Key Performance
Indicators) to track success against each of the strategic objectives. Such
determination is still guided by the company's vision, mission, and culture, as
well as by how the company is ready right now. Usually, the matter involves
brainstorming and discussion with internal teams so that the decisions made are
appropriate to the environment. However, for Arcana Indonesia, most decisions
are taken directly by the COO as the principal decision-maker. So it really
goes unambiguously and unambiguously because it is based directly on insights
and inputs from people who actually understand the company's operational conditions.
Internal
Processes is the first part that both Author and Arcana Indonesia want to start
with. Well, if the system for managing freelancers is good, and the quality of
projects is right, that will form a sublime base on which the effectiveness of
all other processes rests. We will then follow up with a Financial perspective.
This perspective attempts to highlight the importance of some areas that
include the generation of revenues from new products directly derived from the
efficiency of the operations as well as the increase in profit margins and
controlling costs. Then will come the Customer perspective, with the increased
number of new clients, improved loyalty, and customer satisfaction. Finally,
Learning & Growth will serve as the founding pillar for continuous
development of employees and innovations of products to remain competitive in
the marketplace. With the modalities that have been well-organized in this
manner, all strategies can support each other optimally.
4) Designing
the Value Description
In
this last stage, all results from the calculation of this performance appraisal
system will be used as a reference whether the performance of Arcana Indonesia
can be categorized as very good, good, sufficient, or still needs improvement.
To be able to facilitate the company, a percentage will be used as a form of
categorization. This percentage selection is a general percentage used by
Arcana Indonesia which is divided into the following 4 categories:
a. 85%
- 100%����������� = Excellent
b. 75%
- 85% = Good
c. 75%
- 70%� = Fair
d. <70%�������� = Need Improvement
With
this method, companies can know the progress of each target periodically, to
get important insights about things that need to be improved or anticipated.
For this calculation to be effective, companies need to do it regularly, so
that the insights obtained are maximized.
3.
Implementation Plan
Based
on the results of the Balance Scorecard design that has been made before, this
implementation plan is made to be able to help the implementation process to be
more structured. The focus of this process is to be able to create optimal
efficiency for all business instruments in Arcana Indonesia. Seeing that the
time of making this research falls at the end of 2024, the plan to implement it
will begin in 2025 and will be carried out in stages every quarter to evaluate
the previous Balance Scorecard that has been made. Of course, in order for
everything to be balanced, this implementation process must be carried out in
all Arcana Indonesia operational units including on the day of the event. In
its implementation, this implementation will be fully monitored by the COO with
assistance from related divisions. Here is the implementation plan timeline:
Table 6. Proposed Balanced Scorecard for Arcana Indonesia
|
Task |
Start Date |
End Date |
|
Implement Freelancer
Management System |
2025-01-01 |
2025-03-31 |
|
Optimize Operational Costs |
2025-01-01 |
2025-09-30 |
|
Train Employees on New System |
2025-02-01 |
2025-03-31 |
|
Develop 2 New Products for
Campus Market |
2025-03-01 |
2025-06-30 |
|
Acquire 5 New B2B Clients |
2025-03-01 |
2025-12-31 |
|
Launch and Market New
Products |
2025-06-01 |
2025-12-31 |
|
Evaluate Customer
Satisfaction |
2025-09-01 |
2025-11-30 |
|
Final Implementation Review |
2025-12-01 |
2025-12-31 |
Source: (Author, 2024)
But
keep in mind that this design is still a proposal and will not necessarily be
implemented as written in this study. In the future, there may be adjustments
from Arcana Indonesia stakeholders and it is also possible that there will be
changes in this implementation plan.
CONCLUSION
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