How to create a personnel evaluation system in Japanese companies in Indonesia | Points to make evaluations more balanced

In personnel evaluations in Indonesia, salary increases are determined based on the minimum wage announced each year, based on agreement with the labor union or company decision. At that time, it is common to adjust wages not only by increasing the base but also by taking into account the assessment results.

However, in practice, evaluation results submitted by subordinates may be biased toward average evaluations. There are few good and bad evaluations, and as a result, there are many cases in which most employees receive similar evaluations.

Why such an evaluation? Also, how can I provide guidance so that I can give a well-rounded evaluation? This article summarizes the practical points of personnel evaluation in Japanese companies in Indonesia.

Is the quota system effective in personnel evaluation in Indonesia?

In Indonesian workplaces, when it comes to evaluation and treatment, there may be a tendency to emphasize ``being treated the same'' rather than ``fair differences.''

In Japan, we say, "The stake that sticks out gets hammered down." On the other hand, in Indonesia, outstanding employees do not necessarily get beaten. However, the person may feel uncomfortable due to the growing difference between them and their surroundings.

Therefore, there may be a tendency to avoid making large differences in evaluations.

In such situations, some companies allocate a number of people for each evaluation in order to conduct a well-balanced evaluation. For example, in the case of a five-point evaluation, A would be 5% of the number of employees, B would be 10%, C would be 70%, D would be 10%, and E would be 5%.

If your company has a large number of employees, this ratio will be a good guideline. It is also possible to adjust the dispersion of company-wide evaluations.

On the other hand, if the number of people in each department is small, it may be difficult to give anything other than a C grade. Therefore, it may be possible to first conduct evaluations based on the actual situation in each department, and then ultimately adjust the evaluation distribution throughout the company.

However, forcing a quota of people for each evaluation may create a sense of unfairness among evaluators and employees. In particular, if you explain to an employee who received a low evaluation that ``the company has assigned the number of employees,'' it will be difficult for the evaluation result to lead to the employee's improvement.

In this case, personnel evaluation becomes just a procedure for calculating salary increases and bonuses. It is best to use the number of people as a guideline only and avoid forcing it.

There is also a method of adjusting the evaluation based on the total amount paid, rather than the number of employees. This method may provide some operational flexibility.

Reasons why evaluations are biased toward average results

An evaluation of "average" is an evaluation that places less psychological burden on the evaluator. So why is it so difficult to evaluate something as ``above average'' or ``below average''?

The main reason is that the goals to be achieved are not specifically set, and evaluations are made intuitively.

For example, if the goal uses expressions such as ``good'', ``smooth'', and ``quickly'', the subjectivity of the evaluator is likely to enter into the objective. Furthermore, in ability evaluations, it is not clear what level of understanding is required by simply using expressions such as ``understand'' and ``know.''

If evaluation criteria remain ambiguous, evaluators will find it difficult to give extreme evaluations to avoid backlash from subordinates. As a result, evaluations tend to be biased towards average results.

The root cause of unfocused evaluations is ambiguity in goal setting and evaluation criteria.

When setting goals, it is important to have a format that allows you to understand what you need to achieve, by when, and to what level. Particularly if the goal is not measurable, judgments will tend to vary depending on the evaluator.

When implementing goal management and competency standards, it is necessary to carefully check the expressions used when setting them. It is also important for superiors and subordinates to check on achievement status and have the same level of recognition.

If you do this, it will be easier to explain judgments such as ``the target has not been achieved'' or ``the expected level has been exceeded.''

Keystone Consulting Group provides practical support for Japanese companies regarding the personnel evaluation system, wage system, salary increase/bonus system, work regulations, and labor consultation in Indonesia.
Related services:Indonesian labor/human resources support