THE DESIGN OF PERFORMANCE MANAGEMENT SYSTEM FOR A FINANCIAL SERVICES PROVIDER USING IPMS FRAMEWORK: A CASE STUDY OF WEST ABSTRACT SUMATRA REGIONAL BANK

• Main Author: Martha Devano, Alrido
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/57427
• Institution: Institut Teknologi Bandung

Managing performance is a critical function of any company. A performance management system (PMS) should be designed in such a way to facilitate a company to achieve its strategic targets quantitatively. Companies can leverage existing frameworks to develop variables or indicators as part of their performance management activities. As a financial services provider, West Sumatra Regional Bank, or more commonly known as Bank Nagari, has been implementing the fundamental concepts of performance management at the individual level. However, they have not implemented PMS at the corporate level to assess the company's performance across multiple perspectives and aspects. Additionally, based on the company's internal and external analysis, it is found that Bank Nagari is expected to apply a hold and maintain strategy, with market penetration and product development being two strategies that are appropriate for this company. Developing a PMS at the corporate level could be one way to strengthen Bank Nagari's capability to improve and manage its performance. Bank Nagari's performance management system is designed using an Integrated Performance Management System (IPMS) approach. IPMS is divided into five stages: Foundation, Basic Information, Design, Implementation, and Refreshment. This study employs a qualitative approach where the data is collected from primary and secondary sources. IPMS is designed with three perspectives: business outcome, internal process, and resource capability. This study proposes the new PMS which includes twelve variables for business outcomes, eight variables for internal processes, and eight variables for resource capability. Each variable is derived into several indicators that serve as a measurement instrument at the corporate level. It is proposed that 48 indicators will be assigned to the responsible departments. Internal benchmarking is done by evaluating Bank Nagari’s historical performance data. While external benchmarking is done by comparing Bank Nagari's performance to all banks in West Sumatra, conventional and regional banks in Indonesia, and banks classified as BUKU II. Additionally, an implementation plan based on Stage 3 of IPMS should be developed to define the gap between the current and target PMS, as well as supporting reports, socialization of the new PMS, training, resource allocation, display, and scheduling.