PROPOSED DESIGN OF PERFORMANCE MANAGEMENT SYSTEM BASED ON CONTINUOUS PERFORMANCE MANAGEMENT IN BUSINESS UNIT PROCUREMENT OF PT X

• Main Author: Arifasuri, Ninditya
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/46387
• Institution: Institut Teknologi Bandung

PT X conducted internal research as a first step in transforming the organization in order to be able to compete and gain a sustainable competitive advantage in the E-Commerce industry. From the results of this research, it was found that most employees did not know the alignment between their work and company goals. This is due to a deficiency of a formal goal setting by the top leaders caused by a highly dynamic industrial environment. To solve the problem, a continuous performance management is proposed, consists of two components, Objective and Key Results (OKR) and Conversation, Feedback, and Recognition (CFR). Strategic OKR is formed by formulating strategy that is derived from the company's vision and mission, as well as SWOT analysis. Business unit OKR, division OKR, to individual OKR are formed based on the strategic OKR. Next, a performance management system template was designed, consists of OKR, CFR, and end-of-quarter OKR assessment templates, and also its mechanisms. The strength of this proposed performance management system is that it is able to accommodate nimble company condition like PT X. This is because the time horizon of the company's strategy is made for a period of one year and the determination of targets is determined every quarter. That way, the strategy can be adjusted quickly so that the company can survive in the industry. Nevertheless, there are some shortcomings of this performance management system, which in the aspect of strategy derivation and compensation. Strategy derivation to the company OKR is not carried out in a structured and comprehensive manner as in the Balanced Scorecard. In addition, the performance value in OKR is not linked to bonuses so other mechanism needs to be prepared in the distribution of bonuses within the company.