THE EXPERIENCE OF PERFORMANCE MEASUREMENT IN ASIAN COUNTRIES:

THE CASE OF THE REPUBLIC OF INDONESIA

Paper presented at the Second International Conference on Performance

Measurement and Government Innovation

Hosted by the OECD Asian Centre for Public Governance in cooperation with Shejiang Universitycooperation with Shejiang University

Hangzhou, July 9-12, 2007

by

Komarudin

STATE MINISTRY OF ADMINISTRATIVE REFORMTHE GOVERNMENT OF THE REPUBLIC OF INDONESIA

2007

Performancea. Condition that should be known and informed to the

stakeholders so that the level of achievement to the vision and

mission of an institution is also known.

b. Necessary in order to identify the positive and negative impacts

of certain policy taken during the process.

c. Performance information: management tool to observe and c. Performance information: management tool to observe and

evaluate the progress that have been achieved so far or in a

certain period of time: take necessary actions as revising the

policy, aligning the core activities to the organization’s

main duties, plan and determine the desired level of

organization’s achievement, and decide an action, etc.

PERFORMANCE MEASUREMENT� Six Categries: (1) finance; (2) operation; (3) quality; (4) safety; (5)

personnel; and (6) customer satisfaction.” (Chun-Ho Ko, 1998)

� PM can be divided into input, process, output, outcome, benefit,

and impact.

� To be measured: financial, internal business operation,

customer-employee-community satisfaction, stakeholders, and

time.

� Performance Indicator: process, output, outcome, benefit, and � Performance Indicator: process, output, outcome, benefit, and

impact.

� PM Success Strategy: leader commitment, sense of urgency,

alignment to strategic dirction, framework, communication,

employee involvement, custmer oriented strategic plan (logic

model, techniques, SWOT analysis, just in time. accountability,

data collection, reporting, statistical process – operations

research, quality control, evaluation, report to customer and

stakeholders, and develop performance cycle.

• Five Stages: strategic plan, performance indicator, Data Performance System, Improvement of Performance Measure, and Integration with Management Process.

• GOAL OF PM: Effectiveness, Efficiency, Quality, Timeliness, Productivity. And safety. Quality, Timeliness, Productivity. And safety.

• The final result: “good public government” (comparison of mission and goal with output/outcome) and “good corporate government” profit.

Government Agency Performance Accountability System

(SAKIP): inspired by the Government Performance Result Act

(GPRA) 1993 of the US, followed by some related regulation: a. Presidential Instruction No. 7/1999, “Government Performance

Accountability” (INPRES 7/1999)

b. Law 25/2004 on National Development Planning System

c. Law 17/2003 on State Finance

d. Law 1/2004 on State Treasury

e. Law 15/2004 on Control of the Management and Responsibility of

Treasury

f. Law 22/1999 jo 32/2004 on Regional Governance

g. Presidential Instruction 5/2004 on the Acceleration of Corruption

Eradication

h. Presidential Regulation 8/2005 on Finance Report and

Performance Report.

GOVERNMENT PERFORMANCE ACCOUNTABILITY SYSTEM

(SAKIP):

� A decree of the Indonesian People Consultative Assembly

No. XI/MPR/1998 on Administering Clean and Free of

Corruption, Collusion, and Nepotism.

� Followed by Law 28/1999 on Law No. 28/1999 on The State � Followed by Law 28/1999 on Law No. 28/1999 on The State

Organizer Who is Clean and Free From Corruption, Collusion,

and Nepotism.

� Presidential Excecutive Order (Instruction) No. 7/1999 on

Performance Accountability of Government Institution (Inpres

No. 7/1999 on Government Performance Accountability,

“Akuntabilitas Kinerja Instansi Pemerintah, AKIP”).

Government Performance Accountability System

is intended to:a. recover and sustain the people trust to the government;

b. drive transparency and responsiveness of government institutions;

c. encourage people participation in national development programs;

d. make government institutions operate effectively, efficiently, as well

as economically and responsively to the people needs and as economically and responsively to the people needs and

requirements;

e. drive the development of proper evaluation system through the

development of performance management;

f. establish positive and healthy working atmosphere as well as

improved disciplines; and

g. encourage the impromenet of service quality to the people.

The Orientation of SAKIP not only covers the indicators of

input and outpout but also widens to the indicators of

outcome, benefit, and impact as well as indicator of process to

alter the orientation of the previous performance measurement

of government institutions, while monitoring their

implementation processes.

� SAKIP employs strategic management approach� SAKIP employs strategic management approach(including performance measurement) in order to stimulate the

changing

a. from the orientation of inputs and processes to the

effectiveness of outputs and outcomes (outcome oriented);

b. from the short-term orientation (yearly) to the measurable

and sustainable middle-term orientation (five yearly); and

c. the quality improvement of accountability reports.

• The main focus of SAKIP is to enhance

accountability by boosting the government

performance and avoiding authority misuses.

SAKIP also emphasizes an integrated and

non-separable performance accountability

cycles from:

a. Strategic Planning; a. Strategic Planning;

b. Performance Planning;

c. Performance Measurement (including performance evaluation and performance accountability analysis); and

d. Performance Reports.

These cycles reflects a strategic management approach which aims at strategic planning, performance planning, outcome based b

� SAKIP addresses the importance of focusing on high

priority strategic goals (in terms of result) and defining

right programs to achieve the goals or objectives

(efficiently and effectively).

� The new features introduced by the system to the public

governance in Indonesia are performance measurement

and performance evaluation, utilizing performance and performance evaluation, utilizing performance

indicators and measures.

� Both performance measuremet and performance

evaluation were about barely been done under neither act

nor government regulation in the past. The system was

aimed to help both central and regional/local government

agencies to sustainably improve performance and

accountability simultaneously.

Presidential Instruction No. 7/1999 (INPRES 7/1999):requires Ministries, Chief Commander of National Army, Central

Bank Governor (is no longer required to comply with the President

Instruction due to Act No. 23/1999 on Bank Indonesia), Attorney

General, Police Chief, Head of Non-Departmental Agencies,

Secretary of the Highest and High State Institutions (Secretary

General of People Consultative Asssembly is no longer required of

comply with the President Instruction due to Constitution

Ammendment the third, 2001), Governors of the Province, Regents Ammendment the third, 2001), Governors of the Province, Regents

(Districts) and Mayors (Municipalities) to implement performance

accountability system:

a. to prepare a practical guideline on performance accountability to

report as well as to disseminate the guidelines;

b. to evaluate performance accountability report;

c. to coordinate and to monitor the implementation of the INPRES

7/1999.

DISSEMINATION SCENARIO, EFFORTS, AND PROGRESS

OF SAKIP:

• Development of SAKIP: learning based approach; adopting

some good performance management practices which are considered

applicable in Indonesian environment.

• Benchmarking through hunting any performance management

models in website. Study of relevant subjects: Strategic Management

System, Performance Based Management, Performance Based System, Performance Based Management, Performance Based

Budgeting, Reinventing Government, Change Management, etc.

• Dissemination: seminars, workshops, pilots, and socialization;

intended to communicate (regulations or guidelines) and gathering

feedback from public particular participants.

• First National Seminar: pilots in some ministries and regional

governments. The pilots done until the President Instruction No.

7/1999 was issued in June 1999.

� Feisal Tamin, Minister of Adminisrative Reform

(2001-2004): increases the task and function in terms of

accountability and control.

� Taufiq Effendi, Minister of Adminisrative Reform

(2004 up to now): developed cooperation between the

Ministry, Governor, and the Legislative Body of the Province,

witnesses by the Corruption Eradicating Commission to witnesses by the Corruption Eradicating Commission to

implement “ISLAND OF INTEGRITY”. The Minister also

develops coordination, monitoring, and evaluation of the

implementation of INPRES No. 5/2004 on The Acceleration of

Eradicating Corruption.

� The prime public services were the end of bureaucratic

reform to achieve good governance, clean govenment,

and avoiding corruption, collution, and nepotism.

RECENT DEVELOPMENTS

• Cooperation between the Ministry of Administrative Reform and

Corruption Eradication Committee to prevent corruption, collusion,

and nepotism.

• Good mentality and behaviour of government officials along with the

implementation of SAKIP could make them avoid breaking laws.

• Annual Performance Agreement is required between a government

official, a subordinate, and his or her superior, starting from budget

year 2005. year 2005.

• President Instruction No. 5/2004 on Acceleration of Corruption

Eradication: along with the statement of Performance Agreement,

have to be attached a summary of Annual Performance Plan revealing

the main programs that must be accomplished by the signing official,

strategic objectives that were expected to attend, performance

indicators (outputs and or outcomes), and the budget of each

program.

• Socialization 5 Modules: Accountability and Governance; Strategic

Planning; Performance Measurement; Performance Evaluation; and

Reporting.

� Act or Law No. 17/2003 on State Finance intends to

integrate performance accountability system with budgeting

system, so the state budget becomes a performance based

budget, or either central government or regional/local

government. Implementation of performance based budgeting

have been started for budget year 2005.Fully implementation of

it is expected to be done in the next couple years.

� Act No. 1/2004 on State Treasury intends to include � Act No. 1/2004 on State Treasury intends to include

performance achievement information accompanying financial

report and statements in the government annual report.

Transparency of government agencies performance

information is being encouraged.

� Act 32/2004 on Regional Governance intends to include

regulation in autonomy and decentralization.

� Act 25/2004: National and Regional Development Planning

� INPRES 7/1999: Government Performance Accountability

(Accountability, Control, and related Performance

Measurement and Management)

� INPRES 5/2004: Acceleration of Corruption Eradication

� Government Regulation No. 79/2005 on Guidance and

Control of Regional Governance.Control of Regional Governance.

� Government Regulation No. 8/2006 on Finance Report and

Performance Report

� Government Regulation No. 3/1007 on Regional

Development Report, Responsibility Report, and

Information of Regional Development Report.

INPRES 5/2004 on ACCELERATION OF CORRUPTION

ERADICATION

Ten General Instruction to Government Officials:Regular report, reporting-registering-announcing, and

controling; Signing Performance Contract; Increasing the

quality of public services; Integrity Act and Island of

Integrity to buid free of corruption region; Implement

Presidential Decree No. 80/2003 on Goods and Services

Provision without corruption; Efficient, effective, and low

profile character of government officials; Support law

enforcement handled by Police, Judge, and Anti

Corruption Agency; Increasing coordination and

cooperation with all law enforcement bodies or agencies;

and Avoiding corruption habits and increasing guidance

and control to government officials.

1. To develop and implement E-Procurement for government goods and

services provision. .

2. Increases control of taxes, customs, and avoid corruption eradication in

financial activities.

3. Develops National Action Plan of Corruption Eradication (RAN-PK) through

coordination with related institutions.

4. To develop public services policy, performance agreement, implementation

of good governance characteristics, develop government employee system,

and coordinate, monitor, and evaluate the implementation of Inpres No.

5/2004.

Eleven Special Instruction to he Ministries and Related

Chairman of Institution:

5/2004.

5. To prepare the amendment of Law and revise the Act on Corruption

Eradication.

6. To make guidance for the implementation of good corporate governance.

7. To design education curriculum cover anti corruption

8. To socialize and campaign anti corruption program

9. To increase coordination among law enforcement institution

10. To increase awareness and coordination on corruption eradication

11. To implement good governance, to create public services and increase

coordination

All government officials should implement this Presidential Instruction with full

responsibility and report to the President regularly. Signing on December 9,

2004.

Performance Indicator:a. Increase efficiency and effectiveness, public services, Human

Development Index (HDI), Human Poverty Index (HPI), citizen

participation, transparency, accountability, and perception corruption

index (IPK).

b. Key Success Factors in implementing Island of Integrity and

Performance Measurement: commitment from the leader, law as

guidance, system or systemic, internal initiative, coaching, close

monitoring and evaluation, and can do spirit.

c. Best Practices of Island of Integrity covers role of leader (strong c. Best Practices of Island of Integrity covers role of leader (strong

leadership), increasing capacity of regional government, institutional

arangement, system and procedure, management system, human

resources development, the prime and quality of public services,

performance-based governance management, and the acceleration of

corruption eradication.

d. Island of Integrity Program already implemented in 2006 in the

Province of (Riau, South Kalimantan, Central Kalimantan, and

Gorontalom and in 2007, this program will be implemented in another

some provinces.

BUREAUCRATIC REFORM: SIMPLE UNDERSTANDING

1) CHANGE OF MIND, SET, (PATTEN OF THOUGHT, ACTION, ATTITUDE,

CHARACTER AND IDENTITY,

2) SHIFT FROM AUTHORITY PARADIGM TO SERVANT PARADIGM

3) PUTTING ROLE AHEAD OF AUTHORITY

4) OUTCOME ORIENTED

5) PERFORMANCE-BASED MANAGEMEN

6) ADOPTION OF BEST PRACTICES IN MATERIIALIZING GOOD GOVERNANCE,

CLEAN GOOVERNMENT, AND FREE OF CORRUPTION, COLLUSION, AND

NEPOTISM.NEPOTISM.

7) PUBLIC SERVICE DELIVERY SHOULD MAKE VERY CLEAN THE REQUIRMENT,

COST, AND TME OF COMPLETION

TO SPEED THE ERADICATION OF CORRUPTION AND ESTABLISHMENT OF AD

HOC COMMISSION

TO HELP CLAMP DOWN CORRUPTION AGENCIES

9) “START FROM THE END, AND END AT THE BEGINNING.” (FROM

UPSTREAMS: A RIVER AS AN EXAMPLE) RIVER STARTS ITS FLOW.

10) ENCOURAGE THE IMPLEMENTATION OF “INTEGRITY PACT” (COMMITMENT

OF HONESTY).

11) APPLICATION OF GOOD GOVERNANCE, GOOD PUBLIC GOVERNANCE,

GOOD CORPORATE GOVERNANCE

BUILDING A CREDIBLE, TRANSPARENT,

ACCOUNTABLE, AND PROFESSIONAL NATION

CORRUPTION ERADICATION SHOULD START FROM OURSELVES, FAMILY,

MORALITY.

ISSUANCE OF SUCH REGULATION

a. A BUREAUCRATIC REFORM IN INSTITUTION SERVICE DELIVERY

b. SUPERVISION and ACCOUNTABILITY

c. SYSTEM AND PROCEDURE

d. HUMAN RESOURCEd. HUMAN RESOURCE

e. PUBLIC SERVICE DELIVERY

g. SHIFTING PARADIGM and CHANGE OF MIND-SET

WORK ETHICS: COMMITMENT AND CONSISTENCY, AUTHORITY AND

RESPONSIBILITY, HONESTY AND SENSITIVITY, INTEGRITY AND

PROFESSIONALISM, CREATIVITY, LEADERSHIP AND EXEMPLARY,

TOGETHERNESS AND GROUP DYNAMICS, PRECISION AND ACCURCY,

FASTNESS AND RATIONALITY, DEDICATION AND LOYALLY, EMOTIONAL

QUOTIENT, FIRMNESSAND TOUGHNESS, DISCIPLINE AND WORK

REGULARITY, BREVELY AND WISDOM, SPIRIT AND MOTIVATION,

DILIGENCE AND AND PATIENC, JUSTICE AND OPENNES, AND MASTERY

OF SCIENCE AND TECHNOLOGY.

Good Public Governance (GPG) 1) equity

2) supervision/control

3) law enforcement

4) responsiveness

5) effectiveness and efficiencies

6) participation

7) professionalism

8) accountability8) accountability

9) strategic vision

10) transparency

Good Corporate Government (GCG)GCG covers transparency, accountability, responsibility,

independent, and fairness to be implemeted in

government entrepresises.

REGIONAL GOVERNANCE BEST PRACTICES � Best Practices as basic for innovation (criteria and parameter)

– UN HABITAT, as “initiative which is create significant

contribution (outstanding contribution) in increasing the

quality of life in urban, rural or other environment or

circumstances.”

� Best Practices (UN; Dubai Municipality, 2003): big impact in

increasing the quality of life, result of good an effective increasing the quality of life, result of good an effective

coordination, partnership within the government, private

sector, and communities, and sustainable in terms of social,

culture, economic, and environment.

� Stressed of best practices focused on outstanding

contributions from initiatives, success of initiative, increase

quality of life, reality, impact, process, and sustainabiliy, and

transfer to other environment, and peer to peer learning.

CRITERIA OF BEST PRACTICES BY THE UN

Five criteria: Impact, partnership, sustainability and

leadership, community empowerment,gender equity and

social inclusion, innovation within local context and social inclusion, innovation within local context and

transferability or replication.

Seven parameter of Best Practices:situation of region, motivation, innovation,

result measurement, sustainability, lessons learned,

transfer or replication to other area.

BEST PRACTICES OF PROVINCIAL LEVEL

OUT OF 33 PROVINCES AND 462

DISTRICTS/MUNICIPALITIES, THERE WERE SOME

PROVINCES/DISTRICTS/MUNICIPALITIES COULD BE

SEEN AS BEST PRACTICES

Provinces: Gorontalo, East Java, Special Region Yogyakarta Provinces: Gorontalo, East Java, Special Region Yogyakarta

South Kalimantan, Central Kalimantan, Riau,

Riau Island

Districts and Municipalities: Solok, Jembrana, Sragen,

Karanganyar, Pekanbaru, Parepare, Tarakan, Banjarbaru,

Palangkaraya, etc.

DEVELOPING NEW ACT ON

ADMINISTRATIVE REFORM1) RUU on Public Services,

2) RUU on Governance Administration,

3) RUU on State Ministries),

4) RUU on Ethic of Government Employee,

5) RUU on Government Employee, 5) RUU on Government Employee,

6) RUU on Responsibility of Central and Regional

Government and Their Interrelation,

1) RUU on Non-Profit Public Services,

2) RUU on Pension of Government Employee,

3) RUU on National Control System, and

4) RUU on Accountability (SAKIP).

SUGGESTIONS TO IMPLEMENT BUREAUCRATIC REFORM,

INCREASE TRANSPARENCY AND ACCOUNTIBILITY, AND

CORRUPTION ERADICATION

1) Clear and accurate vision, mission, policy, strategy and action plan.

2) Implementing 4-W (well planned, well-organized – who brings what,

well-arranged, and well controlled/supervised).

3) Implementing 4-C (clear, comprehensive, and innovative Concept,

Competence, Connection, and Commitment – meaning, know your Competence, Connection, and Commitment – meaning, know your

mission, know your men, and keep them involved).

4) Consistency and Seriousness

5) Shifting mind-set and culture-set, ethics and code of conduct, and

shifting paradigm.

6) Starting to rewrite Indonesia, rewrite the Republic, and rewrite the

Nation.

7) Developing attitude, knowledge, motivation, and knowledge-based

society and knowledge-based economy.

OBSTACLES TO THE DEVELOPMENT AND

IMPLEMENTATION OF SAKIP

1. Political and Systemic: SAKIP AS AN INSTRUMENT;

2. Organisational Culture: IF YOU WANT, EXACTLY YOU CAN!

3. Performance Measurement AND Performance Indicator

4. Connotation: there are still varies in describing performance.

SAKIP defines that performance means result in terms of output and SAKIP defines that performance means result in terms of output and

or outcome.

5. Legal Base: Government Regulation, Law/Act?

6. Budget Constraints

7. General Problems: institutional and organizational management,

system, procedure, mechanism, and management system,

performance-based human resources management and development,

public services, understanding of accountability, and

control/supervision; discipline, ethic code, character, and shifting

paradigm.

VI. CONCLUSIONGood Governance: laws and regulations, transparent public policies,

people’s participation and public accountability.

The indicator of successful performance of government

institution: emphasized on the successful organization’s vision and

mission accomplishment, and not by inflexible standardized indicators.

The government bureaucracy is encouraged to have clear pre-defined

vision, missions, goals, and objectives which can later be used as the vision, missions, goals, and objectives which can later be used as the

basis of performance measurement and accountability information to its

stakeholders.

Accountability and transparency, the core elements of good

governance on public administration system, have been implemented

through, among others, the development of performance accountability

of government institution system (INPRES 7/1999).

Accountability and transparency is based on classification of managerial

responsibility on each level of the government organization as means of

measurement of the organization’s success or failure in achieving its pre-

defined vision, mission, goals, and objectives.

We should increase our understanding (definition)

about performance measurement and

accountability: accountability:

What kind of material to be meassured? (financial, customer

satisfaction, internal business operation, personal satisfaction,

community satisfaction (shareholders and stakeholders), time frame,

and requirements of the success of performance measurement.

What is the strategy of the success of performance

measurement? full commitment from the leader (top management),

sense of urgency, alignment with strategic direction,

conceptual framework, communication, involvement of employee,

customer-based strategic plan (logic model, using techniques),

SWOT analysis,

“start doing performance measurement norm, revise tomorrow”,

Improve performance measurement, goal and objective, achieve Improve performance measurement, goal and objective, achieve

performance accountability, data collection, consistent reporting,

analysis and revise performance data, evaluate and use performance

information, regular report to customer and stakeholders, and manage

performance measurment cycle (strategic plan, integration with

management process, improve performance measurement, develop

accurate data and information, and perfornace indicator).

The target of performance measurement and

accountability is the reality of good governance, clean government,

and free of corruption,collusion, and nepotism.

Komarudin,Komarudin,

Expert Staff to the Minister of Administrative Reform, Indonesia

Jalan Jenderal Sudirman Kav. 69, Jakarta Selatan 12190,

Phone 62-21-7398347; Fax 62-21-5252720

Home: Phone 52-21-5848242, 5848311; Fax 62-21-5848311

e-mail: komar_udi@yahoo.com HP 0812 926 9650