A. Veronika, B. A. Firmansyah, Sugiarto
(Published in PMI Indonesia Chapter, EXCELLENTIA Project Management Newsletter, 6th Edition July, 2011)
Currently, construction sector begins to aware how important the human resources management in increasing corporate performance. On the contrary, companies are still experiencing any difficulties in managing and developing their human resources. For instance, lower rate of workers educational background; number of temporary workers are high due to fluctuation demand in construction; subjective and objective reasons cause low of workers participation, where subjective reasons are specific procedure in process, material and technology that limited the workers to make decisions, while objective reasons are sight of management that machine and procedures are more important than workers itself; finally, subcontractor system used in projects causes no one is willing to responsible for the training and people development (Tong and Smook 1996).
As one of the key factors in construction company, the failures in human resource management can cause disturbances of fulfilling the organization goal both in performance, profit and reliability of organization (Martoyo 2000). Recent condition shows that construction services in Indonesia still have weaknesses in some aspects, such as inefficient management, budget constraint, technology and limited number of skilled employees (Suraji 2003). Meanwhile, according to Dayatno (2003), weaknesses in some Indonesian national contractors recently were low equity, high interest rate, and also unskilled labor.
Furthermore, human resource problems would cause negative impacts on productivity, efficiency and national construction industry’s competitiveness. To reduce these problems, goals and strategies in national construction industry should include the improvement in technology ability, managerial skilled and professionalism of human resources (Mochtar 1994). In addition, productivity improvement would also raise value-added contents from products and services faster than its competitors (Jergeas et al 2000).
In order to manage human resources, contractors need to make an organization structure; motivate, lead and communicate to employees; manage group of workers; and also evaluate employees’ performance known as managerial function (Chung 1987). Strategic management in human resources can be used as one of key success for company to win the competition by integrate human resources and business strategies. Competency improvement, especially in human resources, is a main aspect to gain success. Moreover, human resources involvement in business strategic and implementation would raise efficiency in construction companies (Karami et al 2004).
Based on these current facts, in management of construction service business, either private or state contractor shall execute the analysis of company human resource management quality to increase its performance (Kaplan & Norton 1996). Whilst performance itself is an optimal result done by somebody or group or company (Mulyadi 2007) and needs to be evaluated during period of time to know how good it works comparing to organizational standard.
Current research about the influence of human resources management to Indonesian construction corporate that used the statistical analysis, found out the most influential variables towards the construction company’s performance consist of:
§ Quality and employee’s performance due to demotion, in which demotion implementation in company would influence to the improvement of company’s standard performance and drive employees to work better for not getting demotion. According to Simamora (1997), demotion was implemented because employees cannot perform well as required by the company’s standard. In addition, company’s standard would improve human resources management and performances.
§ In addition to demotion, another factor which influenced in construction’s performance improvement was goal and objectives based performance appraisal with its contribution as much as 38%. According to Sunarto (2001), performance evaluation’s objective was to give feedback to employees comparing their past and recent performances. Performance’s feedback was used thus employees can evaluate and improve their contribution to the company.
§ Third factor of human resource management was quality in operational problem solving. An employee who has skill to solve operational problem, will present value added to the company. Where in costumer perspective, the faster field troubles solved then the better corporate quality is. Moreover, in order to have the problem solving skill, the company can train their employee which can improve skill, knowledge and experience. Main programs of trainings teach how to complete responsibility and also solve problems both internal and externally (Simamora 1997).
From this research, it was also concluded that construction company’s performance can be improved by identifying factors of human resource management that influence performance improvement and also analyzing its influence. According to research, there were some factors of human resource management that had the biggest influence in company’s performance.
Quality and employee’s performance due to demotion toward construction company performance in Indonesia was the biggest contribution compared to other factors of human resource management. The quality of employees and their performance had significant effect of the company’s performance. The better quality and worker’s performance with demotion implementation could increase the employee performance which also affecting company’s performance.
Meanwhile other factors which gave high contribution to the performance improvement were employee performance appraisal and quality of company leader in solving operational problems. The better capability of company’s management in planning, instructing, leading, communicating and managing information to determine resources requirement would improve company’s performance.
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