ANALYSIS OF ISO 9001:2008 IMPLEMENTATION IN RESOURCES MANAGEMENT IMPACTING EMPLOYEE PERFORMANCE OF MANUFACTURING FIRM: CASE STUDY OF PT.XYZ

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MANAGEMENT IMPACTING EMPLOYEE PERFORMANCE OF MANUFACTURING FIRM: CASE STUDY OF PT.XYZ

By

Khairul Dwigautama Intiar 13111055

BACHELOR’S DEGREE in

BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION & HUMANITIES

SWISS GERMAN UNIVERSITY EduTown BSD City

Tangerang 15339 Indonesia

Revision after Thesis Defence on 13^th August 2015

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Khairul Dwigautama Intiar STATEMENT BY THE AUTHOR

I hereby declare that this submission is my own work and to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at any educational institution, except where due acknowledgement is made in the thesis.

Khairul Dwigautama

_____________________________________________

Student Date

Approved by:

Fiter Abadi, BE, MBA

____________________________________________

Thesis Advisor Date

Dr. rer. nat. Linus Pasasa

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Thesis Co-Advisor Date

Prof. Eric Jos Nasution, MBA, MA, Ph.D

____________________________________________

Dean Date

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Khairul Dwigautama Intiar ABSTRACT

ANALYSIS OF ISO 9001:2008 IMPLEMENTATION IN RESOURCES MANAGEMENT IMPACTING EMPLOYEE PERFORMANCE OF

MANUFACTURING FIRM:CASE STUDY OF PT.XYZ

By

Khairul Dwigautama Intiar Fiter Abadi, BE, MBA, Advisor Dr. rer. nat Linus Pasasa, Co-Advisor

SWISS GERMAN UNIVERSITY

Quality management system is understood as a system that guides organization to focus on producing products or services with assured quality. ISO 9001:2008 is among many standards that optimizes quality management system through setting out the requirements, and recommendation for design and evaluation of the quality management system. One particular clause of the requirements of ISO 9001:2008 implementation relates to performance of employees, this clause is clause 6 resources management. The focus of the clause includes competence, training, awareness, infrastructure and work environment. Thus the purpose of this research is to analyze the impact of ISO 9001:2008 implementation in resources management towards employee performance in certified manufacturing firm, PT.XYZ. Quantitative and qualitative approaches were used in this study. Questionnaire distribution & interview were performed to gather the primary data of this research. The software that were used for analysis and processing of data of this research were AMOS & SPSS. The outcome of this research is ISO 9001:2008 implementation in resources management have a strong influence towards the employee performance of PT.XYZ.

Keywords: Quality management system, ISO 9001:2008, Employee Performance, SPSS, AMOS

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Khairul Dwigautama Intiar

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Khairul Dwigautama Intiar DEDICATION

I dedicate this thesis for Swiss German University, and PT. TUV Rheinland and its client PT.XYZ .

I hope this thesis would be useful both for academic purposes and business purposes.

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Khairul Dwigautama Intiar ACKNOWLEDGEMENTS

First of all, I would like to thank Allah SWT for his blessings throughout my life.

The author also wishes to thank those who have given their support during the completion of this thesis:

Author parents, family and friends for the support and motivation during the thesis writing.

I would like to thank Fiter Abadi, BE, MBA, as my thesis advisor who has been very helpful in guiding me through the making of my thesis.

To Dr. rer. nat Linus Pasasa as my thesis Co-Advisor who supported me to complete the statistical aspects of this thesis work.

I would like to offer special thanks to PT. TUV Rheinland Indonesia and PT. XYZ as their client.

Lastly, I would like to thank Dr. Samuel PD Anantadjaya for sharing his knowledge on business research methods subject in the 7th semester.

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Khairul Dwigautama Intiar TABLE OF CONTENT

Page

STATEMENT BY THE AUTHOR ... 2

ABSTRACT ... 3

DEDICATION ... 5

ACKNOWLEDGEMENTS ... 6

CHAPTER 1 - INTRODUCTION ... 14

1.1 Background ... 14

1.1.1 ISO 9001:2008 in global context ... 16

1.1.2 ISO 9001:2008 in Indonesia ... 17

1.1.3 ISO 9001 :2008 and Employee Performance ... 20

1.2 Research Problem ... 21

1.3 Research Question ... 22

1.4 Research Objectives ... 22

1.5 Scope & Limitation ... 22

1.6 Significance of Study ... 23

1.7 Thesis Structure ... 23

CHAPTER 2 - LITERATURE REVIEW ... 24

2.1 Framework of Thinking ... 24

2.2 Quality Management Systems ... 25

2.3 ISO 9001 ... 27

2.3.1 ISO 9001 Clause 6 (Resources Management) ... 30

2.3.2 Human Resources Clause... 30

2.3.2.1 Competence ... 31

2.3.2.2 Awareness ... 32

2.3.2.3 Training ... 33

2.3.3 Infrastructure ... 34

2.3.3.1 Building, workplaces and associated utilities ... 35

2.3.3.2 Process Equipments (hardwares and softwares) ... 35

2.3.3.3 Supporting services ... 35

2.3.4 Work Environment ... 36

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2.3.4.2 Social Factors ... 37

2.4 Employee Performance ... 38

2.4.1 Employee performance evaluation... 38

2.4.2 Reliability ... 39

2.4.3 Quantity of Work ... 40

2.4.4 Quality of Work ... 40

2.4.5 Attendance ... 40

2.5 Recruitment ... 41

2.6 Management Levels ... 41

2.6.1 Top Level Management ... 41

2.6.2 Middle Level Management ... 41

2.6.3 Low Level Management ... 42

2.7 Previous Studies ... 42

2.8 Differences of Studies ... 47

2.9 Research Model: ... 48

2.10 Hypothesis ... 49

CHAPTER 3 – RESEARCH METHODOLOGY ... 50

3.1 Research Process ... 50

3.2 Type of Research ... 51

3.3 Research Method ... 51

3.4 Unit of Analysis ... 52

3.5 Population and Sampling ... 52

3.5.1 Sampling Method ... 52

3.5.2 Sample Size ... 52

3.6 Type of Data and Collection Method ... 53

3.7 Variable Operationalization ... 54

3.8 Method of Analysis ... 58

3.8.1 Validity ... 59

3.8.3 Pre-Test ... 60

3.8.4 Post-Test ... 60

3.8.5 Sturcutural Equation Modeling (SEM) ... 61

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CHAPTER 4 – RESULTS AND DISCUSSIONS ... 62

4.1 Company Overview ... 62

4.2 Respondent Profile ... 63

4.2.1 Age range of respondents ... 63

4.2.2 Gender ... 64

4.2.3 Position ... 64

4.2.4 Working Period ... 65

4.2.5 Education Background ... 66

4.3 Pre-Test (Reliability and Validity) ... 66

4.3.1 Competence ... 67

4.3.2 Awareness ... 68

4.3.3 Training ... 68

4.4 Post –test (Reliability and Validity) ... 73

4.4.1 Competence ... 73

4.4.2 Awareness ... 74

4.4.3 Training ... 75

4.4.9 Quality of Work ... 79

4.5 Structural Equation Modeling ... 79

4.5.1 Overall Fitness Model ... 80

4.5.2 Path Diagram Output ... 81

4.6 Hypothesis Analysis ... 83

4.6.1 Hypothesis ... 83

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4.8 Findings ... 86

CHAPTER 5 – CONCLUSIONS AND RECOMMENDATIONS ... 88

5.1 Conclusions ... 88

5.1.1 Variable relationship ... 89

5.2 Recommendations... 90

5.3 Further research ... 95

GLOSSARY ... 96

REFERENCES...98

APPENDICES ... 104

Appendix 1: Questionnaire (Bahasa) ... 104

Appendix 2: Questionnaire (English) ... 108

Appendix 3: Questionnaire Results (ISO 9001:2008 (competence, training, awareness, infrastructure, work environment) ... 112

Appendix 4: Questionnaire Results (Employee Performance) ... 114

Appendix 5: Interview transcript ... 116

Appendix 6: Interview Letter of QMR ... 119

Appendix 7: Interview Letter of HRM ... 120

Appendix 8: Pictures of PT.XYZ Workshop ... 121

Appendix 9: PT.XYZ Productivity 2004 ... 122

Appendix 10: PT.XYZ Productivity 2014 ... 122

Appendix 11: PT.XYZ Rejection Rate 2014 ... 123

Appendix 12: Training Policy ... 124

Appendix 13: Training Needs Analysis procedure ... 126

Appendix 14: Operational classification of PT.XYZ structure... 128

Appendix 15: Operational Definition in PT.XYZ manufacturing workshop ... 129

CURRICULUM VITAE ... 130