Appropriate Human Resources Management System

Bank Indonesia is aware that organisation performance depends heavily on a few key people holding critical positions⁷. In this regard, filling in these positions is a vital function of human resource management. Further, it is important and necessary to identify these critical positions and the personnel who can systematically and be prepared to hold such positions. All of these new areas would be implemented within the framework of human resources management.⁸

7 Bradley W. Hall, Ph.D., The New Human Capital Strategy-Improving the Value of Your Most Important Investment Year After Year,

Chart 9

Framework of Human Resources Management in Bank Indonesia

The five systems of human resources management in Bank Indonesia are as follows:

Human Resources Planning, 1.

Human Resources Sourcing, 2. Human Resources Profiling, 3. Human Resources Developing, and 4.

Human Resources Rewarding.

5.

2.4.1 Human Resources Planning

Human resources planning is a process of identifying the needs of human resources, either quality or quantity. This process will be carried out for the next five years period although its implementation and assessment is on an annual basis.

Upon the identification of the required quality and quantity, the next step would to strategise the meeting of these human resources requirement. During the strategic stage, the requirement can be fulfilled through internal recruitment and thereafter external recruitment. For internal recruitment, the priority would be focused on the top talent pool, internal business units and lastly, external business units. For the recruitment through the top talent pool and internal business units, the relevant vacant position is not announced to all employees but instead is filled based on the human resources planning by the head of the business unit. For internal as well as external recruitment, Bank Indonesia places emphasis on career paths so that the

2.4.2 Human Resources Sourcing

Human resources requirement will be met by first giving priority to the internal candidates. HR management therefore requires rules on career progression.

If a candidate within the internal business unit cannot fill a vacant position, the vacancy is then published via intranet inviting those from other business units with specified qualification to submit an application. The process can be either vertical or lateral. Bank Indonesia believes that a potential candidate need not necessarily be from the same grade, but indeed, can be sourced from lower grades. However, there is maximum number of grades that a candidate can move upward. Bank Indonesia has several critical positions, the source of which potential candicates comes from the Talent Pool, which is managed by the HR Committee. When no potential candidates are available within its organisation, Bank Indonesia would recruit candidates from external sources. The recruitment can be done exclusively or concurrently with other vacant positions. The external party would normally take charge of this recruitment process to ensure good governance and avoid unnecessary interventions.

2.4.3 Human Resources Profiling

To identify profiles of employess, Bank Indonesia has to undergo three assessments as follows:

2.4.3.1 Performance Appraisal

The performance appraisal in carried out in three stages, namely performance planning, performance review and performance evaluation⁹. There are two appraisal items, the individual key performance indicator and the behaviour competencies. Each stage is done through a dialogue between the employee and his/her supervisor, the results of which will then be discussed at the level of business unit heads for their approval.

2.4.3.2 Competency Assessment

Bank Indonesia has in place a competency model to be applied in every position within its organisation. The competency assessment is carried out by way of self-assessment, the results of which will be discussed and verified by the respective line managers for approval. The discussion with the relevant manager will also determine the type of measures necessary to overcome any competency gap issues faced by the relevant employee.

2.4.3.3 Readiness, Awareness and Willingness (RAW) assessment Unlike the other assessments, the RAW assessment applies only to those considered as potential by the organisation. These potential employees (based on performance and competency) will be assessed according to their readiness, ability and willingness to hold a higher position. If the relevant employees pass this assessment, they will be admitted into the top talent pool for customised human resources development by the organisation.

2.4.4 Human Resources Developing

A development programme is available for top talent and talent categories.

Those who are admitted into the top talent pools will join the leadership development programme. This programme is designed with various modalities of development, including placements in other institutions. The organisation is fully responsible for human resources development although it works closely with the line managers when it comes to the implementation thereof. Those who are classified as talent employees will receive development based on the results of the competency assessment. Generally, the form of development tends to be more technical for supporting their existing tasks. Another form of development is, among others, the sponsorship of qualified employees for post-graduate or doctorate programmes to meet Bank Indonesia’s requirements.

2.4.5 Human Resources Rewarding

As an acknowledgement to its human resources contribution to the organisation, Bank Indonesia uses the total remuneration package comprising salary, incentive, benefit and facility. As the regulator, it is necessary for Bank Indonesia to employ the best human resources available. Therefore, its compensation package is aimed at leading the market. The rewards are based on position, person and performance (3Ps), with emphasis on performance, i.e., the higher the performance, the higher the rewards bestowed by Bank Indonesia.

To maintain the quality of its human resources, Bank Indonesia has an exit policy scheme. This scheme is set in motion either upon initiative of the organisation or the employees themselves. The amount of compensation offered under this scheme varies, depending upon the specified criteria. In general, if the initiative comes from Bank Indonesia, the compensation offered is usually higher.