Performance management is the process of managing or utilizing resources aimed at improving organizational and employee performance to achieve organizational goals. Performance management within the scope of the Ministry of Finance includes performance management on the organizational and individual or employee side. In 2022, the Ministry of Finance has improved performance management guidelines for its subordinate units through the stipulation of Minister of Finance Decree No. 300/KMK.01/2022 concerning Performance Management within the Ministry of Finance.
To implement performance management, the Ministry of Finance established a performance management structure consisting of a Performance Management Committee and a Performance Owner Unit. The Performance Management Committee is the highest authority in performance management structure which has the responsibility to determine performance management policies and implement the Ministry’s performance management process.
With the enactment of Minister of Finance Decree No. 300/KMK.01/2022, the term performance manager changes to Performance Unit (UPK). The UPK level consists of:
a. UPK-One, namely the UPK at the organizational unit level led by Senior Executive Official and non- echelon organizational units which are below and responsible to the Minister of Finance;
b. UPK-Two, namely the UPK at the organizational unit level led by First Executive Official, non-echelon organizational unit that is under and responsible to the Minister of Finance through a Middle-Level Manager, and a one-level-below non-echelon organizational unit that is under and responsible to the Minister of Finance;
c. UPK-Three, namely the UPK at the organizational unit level led by the Administrator Official at the service office and the echelon III Technical Implementing Unit within the Ministry of Finance.
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Performance Management Committee Executive
Committee Chairman Minister of Finance
Vice Chairman Vice Minister of Finance
Members Senior Executive Officials, the Head of Nonechelon Organizational Units who are under and responsible to the Minister of Finance, Special Advisor, and Experts
Operational
Committee Chairman Secretary General
Field Chief Executive Assistant to the Minister for Organizational, Bureaucracy, Information and Technology Affairs
Members First Executive Officials and Officials 1 (one) level below the Head of the Nonechelon Organizational Unit who are under and responsible to the Minister of Finance, who oversees performance management
Committee
Secretariat Organizational Performance
Management Head of Bureau of Planning and Finance Employee Performance
Management Head of Bureau of Humas Resources
Performance Unit (UPK) UPK-One (Performance Executive Manager)
Organizational Performance Coordinator of UPK-One Employee Performance Coordinator of UPK-One Organizational Performance Administrator of UPK-One Employee Performance Administrator of UPK-One
UPK-Two (Performance Manager)
Organizational Performance Coordinator of UPK-Two Employee Performance Coordinator of UPK-Two Organizational Performance Administrator of UPK-Two Employee Performance Administrator of UPK-Two
UPK-Three (Performance Submanager)
Organizational Performance Coordinator of UPK-Three Employee Performance Coordinator of UPK-Three Organizational Performance Administrator of UPK-Three Employee Performance Administrator of UPK-Three Legal Basis: Minister of Finance Decree No. 300/KMK.01/2022
The performance management system framework is implemented in three main stages, as follows:
a. formulation of a performance management system that includes systematic performance management policies, procedures, and practices;
b. implementation of performance management consisting of performance planning, performance implementation, performance evaluation, as well as reporting and utilization; and
c. implementation of monitoring and evaluation of the performance management system, which is a series of activities Performance Management Structure at the Ministry of Finance
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Stage Organizational Performance Management Employee Performance Management Performance Planning The process of preparing and establishing a
performance contract. The process of preparing and determining
Employee Performance Targets.
Performance Implementation The process of achieving performance targets, monitoring, coaching and revising performance planning based on the agreement.
Performance Evaluation Performance evaluation process with outputs as follows:
• Organizational Performance Value;
• Organizational Performance Value based on Quality of Performance Commitment; and
• Organizational Performance Title.
Performance evaluation process with outputs as follows:
• Employee Performance Value; and
• Employee Performance Title.
Reporting and Utilization of Performance Evaluation Results
Performance reporting consisting of:
• Determination of Organizational Performance Value and Organizational Performance Value based on Performance Commitment Quality; and
• Preparation of Government Agency Performance Accountability Report.
Performance reporting consisting of:
• Determination of Employee Performance Value; and
• Determination of Employee Performance Title.
Utilization of performance evaluation results, which consists of:
• Awards;
• Providing incentives and/or other benefits; and/or
• Imposition of sanctions based on the provisions of the laws and/or provisions in force at the Ministry of Finance.
Legal Basis: Minister of Finance Decree No. 300/KMK.01/2022
A. ORGANIZATIONAL PERFORMANCE MANAGEMENT
Organizational performance management is performance management in the context of carrying out tasks and functions to achieve organizational goals within a certain period. The Ministry of Finance uses the Balance Scorecard (BSC) performance management system. This system aims to translate the vision, mission, goals and strategies contained in the Strategic Plan into a Strategy Map.
The implementation of BSC-based performance management in the Ministry of Finance is divided into six levels, namely:
a. Kemenkeu-Wide, namely the Ministry level (Minister and Vice Minister);
b. Kemenkeu-One, namely UPK-One level, Senior Executive Officials of Non-UPK Manager, Special Advisor, and Experts;
c. Kemenkeu-Two, namely UPK-Two level, First Executive Officials of Non-UPK Manager, and functional officials who are responsible to the UPK- One Executive Officials;
d. Kemenkeu-Three, namely UPK-Three level, Administrator Officials of Non-UPK Manager, and functional officials who are equivalent to Administrator Officials;
e. Kemenkeu-Four, namely Supervisory Officials and Functional Officials who are equivalent to Supervisory Officials;
f. Kemenkeu-Five, namely staff and functional position equivalents of staff.
Performance Management Implementation Stages
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Perspectives Description
Stakeholder Includes SO that the organization intends to realize to meet expectations in order to be considered successful from the perspective of stakeholders, namely parties who have an interest in the output or outcome of the organization without using the organization's services directly (President, House of Legislatives, Minister of Finance, The Audit Board of The Republic of Indonesia, society).
Customer Includes SO that the organization intends to realize to meet expectations of customers and/or the organization's expectations of customers, namely external parties who are directly related to the output or services of the organization (taxpayers).
Internal Process Includes SO to be realized through a series of processes managed by the organization in providing services and creating value for stakeholders and customers.
Learning & Growth Includes SO in the form of ideal environments for the organization's internal resources that the organization intends to realize to carry out business processes to deliver results that meet the expectations of stakeholders and customers.
Legal Basis: Minister of Finance Decree No. 300/KMK.01/2022
Additionally, the success of achieving each SO is measured by the KPI. KPI is determined by adhering to the SMART-C principle (specific, measurable, agreeable, realistic, time-bound, continously improved).
DGT regularly monitors and develops organizational performance through Organizational Performance Dialogue (DKO). DKO is a formal communication between UPK leaders and officers/employees reporting to them to discuss the achievement of strategy, performance, risks and organizational action plans. The employees conduct DKO at least once every quarter, in April, July and October of the current year, as well as
Subsequently, DGT evaluates organizational
performance represented as Organizational Performance Score (NKO), Organizational Performance Score based on Performance Commitment Quality (NKO K3), and Organizational Performance Title. The final stage of the organizational performance management cycle involves reporting and utilizing organizational performance results, which includes determining NKO and NKO Legal Basis: Minister of Finance Decree No. 300/KMK.01/2022
Principles Description
Specific Defines something firmly, does not have double meaning, is relevant and distinctive/unique in assessing and encouraging the performance of a/an unit/employee.
Measurable Being measured clearly and has a clear measurement method.
Agreeable Agreed by the KPI owner and supervisor.
Realistic Representing achievable and challenging target.
Time-bounded Setting a deadline for target achievement.
Continously Improved Quality and targets are adjusted to developments in organizational strategy and are always refined.
Principles in Determining Key Performance Indicators Perspectives in GT Strategy Map
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Legal Basis: Minister of Finance Decree No. 300/KMK.01/2022
KPI Realization Raw data assessment results are based on the formula stated in the KPI manual.
KPI Achievement Index Results are evaluated by comparing realization to target using the formula for calculating the KPI achievement index for each type of polarization.
Strategic Objective Value Total of all KPIs achievement index in a SO considering the weighted KPIs.
Perspective Value Total of all Strategic Objective Value in a Perspective.
Organizational Performance Value Total of all Perspective Values or all KPI realizations in a Strategy Map.
B. EMPLOYEE PERFORMANCE MANAGEMENT
Employee performance management begins with employee performance planning, which includes preparing and establishing Employee Performance Target. Employee Performance Target is a document created as a consequence of a performance dialogue between employees and their immediate superiors regarding the performance plan to be accomplished in a specific period. Key Performance Result and Additional Performance Result, Work Behavior, and Employee Performance Target Attachments are all part of the Employee Performance Target. The Key Performance Result reflects the employee’s job description based on performance dialogue with management, while the Additional Performance Result is a task outside of the main job description that includes innovation, squad team, and other assignments.
DGT conducts employee performance through Individual Performance Dialogue as a communication medium between immediate superiors and employees. Individual Performance Dialogue implementation includes planning the Employee Performance Target, implementing performance plans, monitoring performance, providing continuous feedback, and implementing performance coaching. Following that, the employee performance evaluation stage is conducted regarding performance results and work behavior.
The final stage of employee performance management is reporting and applying performance assessment results.
Employee performance reporting leads to the determination of Employee Performance Score and Employee
Performance Title utilized as a basis for providing awards, incentives and/or allowances, and sanctions. Additionally, DGT also conducts an employee performance rating procedure which provides performance status as a basis for payment of allowances and used as a consideration in human resource decision making.