List of Abbreviations
Chapter 2: Context of the Study
2.4 Context of the study
The Directorate General of Customs and Excise (hereafter referred to as DGCE) consists of 120 vertical offices spread across 34 provinces (MoF Regulation Number 206.3/PMK.01/2014). Alongside the other Echelon 1 units in the MoF, the DGCE began, at the organisational level, implementing performance management based on the BSC in 2009. Then, over the following two years, the implementation of the BSC was cascaded to lower levels, gradually, reaching the staff levels in 2011.
Before implementing the BSC system, performance measurement within the DGCE used the aforementioned DP3 system (list of job implementation assessments). As described in Chapter 1, this assessment system was subjective in that there were no specific performance indicators attached to the DP3 system;
the assessment system was therefore based merely on the subjective views of an employee’s direct supervisor. The introduction of the BSC system at the individual level has brought drastic changes in the assessment system, because in contrast
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to the DP3 system, every employee is now evaluated based on key performance indicators along with the targets that are directly or indirectly related to the organisation’s strategic objectives.
At the beginning of the fiscal year, all DGCE employees sign a performance contract together with their direct supervisors (for instance, in MSOs in the DGCE, Echelon 3 employees sign with the head of the MSO). The performance contract comprises organisational strategic objectives, key performance indicators (KPIs) and the target of the KPIs for the period of one fiscal year. The performance contract is reviewed every six months, and during the review, a performance dialogue system is also provided to support the employees in reaching the performance targets.
For the purposes of this study, the researcher selected twelve CEOs as respondent organisations: the Main Service Offices (MSOs) of Tanjung Priok, Batam, and Soetta and the Customs and Excise Offices (CEOs) of Jakarta, Marunda, Merak, Tangerang, Bekasi, Bogor, Purwakarta, Cikarang, and Bandung. In the following subsections, brief descriptions of the characteristics of each of the twelve offices are provided.
2.4.1 MSO, Tanjung Priok
The MSO of Tanjung Priok is the largest office in the Directorate General of Customs and Excise. This main office is situated at the Port of Tanjung Priok in the northern part of Jakarta, the capital city of Indonesia. The port of Tanjung Priok is the largest seaport in Indonesia and is responsible for roughly 70% of Indonesia’s import and export activities (Ginting et al. 2015; Pang and Gebka 2016). The main task of this office is to serve, control and conduct audits within the context of customs and excise matters covering the port area of Tanjung Priok (MoF Regulation 68/PMK.01/2007).
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The MSO of Tanjung Priok is headed by an Echelon 2 (director-level) employee, who is responsible for ten Echelon 3 (middle manager-level), 145 Echelon 4 (first- line manager-level), and 1,016 staff-level employees. With regards to BSC implementation, at the time the fieldwork for this thesis was conducted, the BSC had been in place for eight years at the organisational level (since 2009). In 2010, the implementation of the BSC cascaded to lower levels (Echelon 3). The year after that, BSC implementation cascaded to Echelon 4 and all staff levels. Thus, in 2011, the MSO of Tanjung Priok implemented the BSC within all levels of the organisation (to the individual level).
2.4.2 MSO, Batam
The MSO of Batam is situated in the city of Batam within the province of Kepulauan Riau. The main task of this office is to serve, control and conduct audits within the context of customs and excise matters in the area of the Batam Free Trade Zone (MoF Regulation 168/PMK.01/2012). The MSO of Batam is headed by an Echelon 2 employee, with seven Echelon 3, 24 Echelon 4 and 257 staff-level employees. As with the MSO of Tanjung Priok, BSC implementation in Batam began in 2009, or eight years prior to the conducting of the fieldwork for this thesis and cascaded gradually to the lower and individual levels in 2010 and 2011.
2.4.3 MSO, Soetta
The MSO of Soetta is situated in the airport area of Soekarno-Hatta International Airport in the province of Banten. The main task of this office is to serve, control and conduct audits within the context of customs and excise matters covering the area of Soekarno-Hatta International Airport (the busiest international airport in Indonesia). The MSO of Soetta is headed by an Echelon 2 employee together with six Echelon 3, 59 Echelon 4 and 622 staff-level employees. The BSC was implemented organisationally in 2010, or seven years prior to the conducting of the fieldwork for this thesis. Later in 2010, the implementation of the BSC was cascaded to Echelon 3. In the following year, BSC implementation cascaded to
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Echelon 4 and all staff levels. As of 2011, then, the MSO of Soetta had implemented the BSC within all levels of the organisation (to the individual level).
2.4.4 CEO, Marunda
The CEO of Marunda is situated in the northern part of Jakarta, within the province of Banten. The main task of this office is to serve, control and conduct audits within the context of customs and excise matters covering the Sunda Kelapa seaport and bonded zones around Marunda (MoF Regulation 206.3/PMK.01/2014). The CEO of Marunda is headed by an Echelon 3 employee and also employs 16 Echelon 4, 40 Echelon 5, and 116 staff-level employees. The BSC was implemented organisationally in 2010, or seven years prior to the conducting of the fieldwork. In 2011, BSC implementation cascaded to echelon 4 and all staff levels. As of 2011, the CEO of Marunda was thus implementing the BSC at all levels of the organisation (to the individual level).
2.4.5 CEO, Jakarta
The CEO of Jakarta is situated in the eastern part of Jakarta, within the province of DKI Jakarta. The main task of this office is to serve, control and conduct audits within the context of customs and excise matters covering the Halim Perdana Kusumah and bonded zones around Jakarta (MoF Regulation 206.3/PMK.01/2014). The CEO of Jakarta is headed by an Echelon 3 employee, with 16 Echelon 4, 57 Echelon 5 and 101 staff-level employees. As for BSC implementation, it took place organisationally in 2010, or seven years prior to the conducting of the fieldwork. The year after that, BSC implementation cascaded to Echelon 4 and all staff levels. Thus, in 2011, the CEO of Jakarta was implementing the BSC at all levels of the organisation (to the individual level).
41 2.4.6 CEO, Merak
The CEO of Merak is situated in the city of Cilegon in the province of Banten. The main task of this office is to serve, control and conduct audits within the context of customs and excise matters covering the area of the Merak international seaport (MoF Regulation 206.3/PMK.01/2014). The CEO of Merak is headed by an Echelon 3 employee who is responsible for 13 Echelon 4, 37 Echelon 5 and 48 staff- level employees. The BSC was implemented organisationally in 2010, or seven years prior to the conducting of the fieldwork. In the year after that, BSC implementation was cascaded to Echelon 4 and all staff levels. Thus, in 2011, the CEO of Merak implemented the BSC within all levels of the organisation (to the individual level).
2.4.7 CEO, Tangerang
The CEO of Tangerang is situated in southern part of the city of Tangerang, within the province of Banten. The main task of this office is to serve, control and conduct audits within the context of customs and excise matters covering the area of customs bonded zones under the jurisdiction as stipulated in MoF Regulation 206.3/PMK.01/2014. The CEO of Tangerang is headed by an Echelon 3 employee responsible for 13 Echelon 4, 37 Echelon 5 and 48 staff-level employees. The BSC was implemented organisationally in 2010, or seven years prior to the conducting of the fieldwork. The year after that, the BSC implementation cascaded to Echelon 4 and all staff levels. Thus, in 2011 the CEO of Tangerang implemented the BSC within all levels of the organisation (to the individual level).
2.4.8 CEO, Bekasi
The CEO of Bekasi is situated in the Bekasi Regency in the province of West Java.
The main task of this office is to serve, control and conduct audits within the context of customs bonded zones under the jurisdiction as stipulated in Minister of Finance Regulation 206.3/PMK.01/2014. The CEO of Bekasi is headed by an Echelon 3 employee along with 16 Echelon 4, 75 Echelon 5 and 159 staff-level
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employees. The BSC was implemented organisationally in 2010, or seven years prior to the conducting of the fieldwork. In 2011, BSC implementation cascaded to Echelon 4 and all staff levels. Thus, in 2011, the CEO of Bekasi implemented the BSC within all levels of the organisation (to the individual level).
2.4.9 CEO, Bogor
The CEO of Bogor is situated in the Bogor district in the province of West Java. The main task of this office is to serve, control and conduct audits within the context of customs bonded zones under the jurisdiction as stipulated in Minister of Finance Regulation 206.3/PMK.01/2014. The CEO of Bogor is headed by an Echelon 3 employee working with 15 Echelon 4, 52 Echelon 5 and 125 staff-level employees. The BSC was implemented organisationally in 2010, or seven years prior to the conducting of the fieldwork. In the following year, BSC implementation cascaded to Echelon 4 and all staff levels. In 2011, then, the CEO of Bogor implemented the BSC at all levels of the organisation (to the individual level).
2.4.10 CEO, Purwakarta
The CEO of Purwakarta is situated in the Purwakarta district, which is in the province of West Java. The main task of this office is to serve, control and conduct audits within the context of customs bonded zones under the jurisdiction as stipulated in Minister of Finance Regulation 206.3/PMK.01/2014. The CEO of Purwakarta is headed by an Echelon 3 employee and is additionally staffed by 16 Echelon 4, 50 Echelon 5 and 76 staff-level employees. The BSC was implemented organisationally in 2010, or seven years prior to the conducting of the fieldwork.
The year after that, BSC implementation cascaded to Echelon 4 and all staff levels.
Thus, in 2011 the CEO of Purwakarta implemented the BSC within all levels of the organisation (to the individual level).
43 2.4.11 CEO, Cikarang
The CEO of Cikarang is situated in Bekasi Regency in West Java. The main task of this office is to serve, control and conduct audits within the context of customs bonded zones under the jurisdiction as stipulated in Minister of Finance Regulation 206.3/PMK.01/2014. The CEO of Cikarang is headed by an Echelon 3 employee supervising 16 Echelon 4, 49 Echelon 5 and 114 staff-level employees.
Performance management based on the BSC was directly applied at all levels, including the individual level, when the office was first established in 2015.
2.4.12 CEO, Bandung
The CEO of Bandung is situated in Bandung Regency in West Java. The main task of this office is to serve, control and conduct audits within the context of customs bonded zones and Husein Sastranegera International Airport, under the jurisdiction as stipulated in Minister of Finance Regulation 206.3/PMK.01/2014.
The CEO of Bandung is headed by an Echelon 3 employee working with 15 Echelon 4, 48 Echelon 5 and 79 staff-level employees. The BSC was implemented organisationally in 2010, or seven years prior to the conducting of the fieldwork.
The year after that, BSC implementation cascaded to Echelon 4 and all staff levels.
Thus, in 2011 the CEO of Bandung implemented the BSC within all levels of the organisation (to the individual level).