A group field project has been conducted to improve motivation through an effective performance appraisal. Research was done both qualitatively by holding a focus group discussion, and quantitatively by conducting a survey on 100 respondents. The respondents were divided into two groups, rater and ratee.

SCI Laboratory is a strategic business unit of SUCOFINDO where its size and scope is considered unique to represent s the company as a whole. The initial problem was first identified by the increasing trend of late work completion. Job completion is a major concern in SCI Laboratory, since it relates to the customers who expect the result in time as agreed in the receipt. On further interview with the General Manager, it was noted that the employees are reluctant to finish their pending jobs in the same day. It appeared there is a low motivation in the part of the employees. The qualitative result shows several indications that contribute to low motivation, which further supported by the quantitative result.

Based on the performance appraisal result of SCI Laboratory in 1996, all of 148 employees receive 'B' rating, and in 1997, 142 out of 148 employees receive 'B' rating. The quantitative study shows that 75% of the respondents say it is common for employees to receive 'B' rating. The majority of respondents (65%) also feel there is no differentiation between number scoring of 76 to 90 (range for 'B' rating).

The quantitative result on the goals of performance appraisal says, promotion and career planing is ranked first, measuring productivity second, requirement for a grade promotion third, promoting motivation fourth, and reward fifth. The focus group stated because of performance appraisal is linked to career planning and grade promotion, it is considered that 'A' rating is given only to extraordinary performer. On the other hand, it is unkind to give 'C' rating since it would result in a delay on grade promotion for at least a year.

The central tendency (every employees receive 'B' rating) and leniency (reluctance to give lower than 'B' rating) are errors in performance appraisal which making it a poor tool in promoting motivation. The existing reward system does not reflect different treatment to outstanding and poor performer, as bonus given is basically the same for all employees, which further de-motivate the employees. From the management point of view, performance appraisal can not provides measurable difference between good and poor performer, therefore it can not be use to differentiate level of appreciation. Thus 73% of the respondents wanted a written record of work achievement to support performance appraisal.

If performance appraisal is not linked to a grade promotion, 86% of raters are willing to give, whilst 97% of ratees are willing to receive 'A' or 'C' rating.

Productivity in SCI Laboratory also as a result of group work as well as individual, whilst group work is based on a synergy between individual group member, group performance achievement should be included in the individual performance appraisal to promote synergy between individual group member. This in line with 91 % of the respondents who wanted to have group performance appraisal

Based on the analysis from the qualitative and quantitative result, there are alternatives solutions and the group field project proposed several recommendations as follows:

-Improvement in performance appraisal system

-Forced distribution method will over come central tendency since the method requires that a certain number of employees will receive low score or high score, with the bulk of employees will remain in the center of the curve.

-Work standard method is recommended where performance objectives are set between the supervisor and subordinate at the beginning of each year.

-Improving the skill of raters by means of training to observe behavior more accurately and judge it fairly.

-Improvement in the merit system

-Cumulative grade promotion method is a modification of the current abortive grade promotion system. Under this method, the final scoring is an average of previous score instead of sudden elimination, then the employee's can compensate their score after receiving a low score by achieving a higher score in the following year.

-Performance Bonus, which is instead of given basically the same bonus to all employees, bonus is given based on the calculation of individual performance appraisal. Under this method, the good performer can associate satisfactory achievement directly to the reward.



- Measuring group performance

To improve synergy between individual group member, group performance achievement should be include in the calculation of quarterly performance bonus using the group performance targets as follows;

. Productivity

. Completion time

. Error Rate

. Customer complaints



Research Location: PT SUCOFINDO Indonesia

Supervisor: Tengku Nathan Machmud, SH, Msc and Amalia Ernawati Maulana, MBA

Accepted on December 1998



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