Jalpak is a Japanese travel agent company, which has two offices in Indonesia, i. e. its operational office in Bali Island, and one representative office in Jakarta. It was originally established in 1996 with one office in Bali and just a few employees. It engages mainly in promoting tour packages of Bali Island for Japanese people. Jalpak was established in the moment of tourism booming in Indonesia, especially Bali Island. As the business grow, the need of more employees hired arise, not to mention the opening of its Jakarta representative office at the end of 2000.
Now Jalpak has 31 local staff with 7 Japanese staff, including the President Director. The main competitor for Jalpak is Japan Travel Bureau (JTB), which had established far longer than Jalpak. In addition, the two of them are considered the major player in the business, with Jalpak and JTB have approximately 40% and 50% of the tourism market, respectively. The business is not always very good. Jalpak and all travel industry in Bali Island have experienced several blows since their establishments.
The most recent and severe blows were the World Trade Center (WTC) Bombing in 2001 and Bali Bombing tragedy in 2002, in which the later has forced Jalpak to stop its selling activities for about two weeks after the horrific event. This has caused the company to loose around 80% of its montly sales, while in 2001 the WTC tragedy has already caused the company to loose 70% of monthly sales value. Exhibit 1 shows the sales decrease during 2001 & 2002. The huge downturn in sales has forced Mr Yoshiaki Nakamoto, the President Director, to announce a cost-cutting policy in the form of cutting the annual salary increases and annual bonuses.
In term of employees, Jalpak has a various kinds of ethnic backgrounds. Although it is dominated by Balinese people, the company also has several local staff originally recruited from outside Bali Island. Most of them have medium education background, except for Johan and Lisa (his assistant), who have Bachelor Degrees, both in Accounting and Education, respectively. The names of staff with their education backgrounds are shown in Exhibit 2. Exhibit 3 shows the organizational structure of Jalpak. The HR Function in Jalpak
Jalpak did not have a separate HR Department. However, as Administrative Director, Mr I Nyoman Wantra (see exhibit 3) held the responsibility of Human Resources Function and General Affairs (GA). The tasks of GA were delegated among his 3 staff (Ira, Ani, & Lastri), while he himself assumed the responsibility of HR Manager without any staff at all in this area. This condition added to his other handicap by not having HR background (exhibit 2). The HR function can be viewed under four main areas in the following :
Human Resources Flow HR Flows concern about recruiting, career development & training, and termination policy (see exhibit 4). In Jalpak, there were no standard recruitment & termination procedures, no performance appraisal system, and obviously no trainings have been given to staff. Jalpak never give clear criteria for the selection process, such as educational background, working experience, etc. Most of the recruits were based on closeness & familiarity by one or more staff within the company.
Jalpak also did not have performance appraisal system, as promotions were based on seniority and personal attitude. The promotion decisions were determined solely by Mr Nakamoto (the President Director). Reward System In term of reward system in Jalpak, all employees received take-home pay plus tax allowance, with annual THR and bonus, and health insurance coverage. Mr Nakamoto also did not give allowance for overtime, regardless of the workload during high season. Moreover, no one knows what are the criteria to get a salary raise due to unclear policy.
Mr Nakamoto as the President Director can determine whether or not a staff would get a raise, by simply asking about the attitude of the staff to the direct superior, and sometimes even without it. There were also no procedures to determine general salary increase, as Mr Nakamoto can give an annual raise for only Rp 50,000 to a staff, despite the salary range in the staff level were already very low (Rp 450,000 To Rp 700,000) This caused a deep de-motivation among the staff, in addition of the announcement made by Mr Nakamoto himself about zero salary increase due to the tragedies for 2 consecutive years.
Work System Most of employees in Jalpak focused mainly on their daily work, without concerning of their co-workers, peers, or other department staff’s work. Managers were too busy with themselves, while staff only did what they are asked to do, and learned to do it based on past experiences. Lack of teamwork, initiatives, and leadership (for Managers and even the Japanese Directors) were the cultures developed in all departments. Even worse, all staff were determined to go home on time, regardless the workload they have.
The main reason for these conditions, was the absence of detailed job descriptions and standard operating procedures. Employee influence/communication system Mr Nakamoto scheduled two weekly coordination meetings, one attended by him with other Japanese staff, the other was delegated to Wantra with other local managers. However, with his authoritarian style, those meetings only became informational meetings, as it was obvious of his top-to-bottom approach to pass his decisions and announcements (by using Wantra as shield) to all local employees.
In addition, all of Jalpak’s employees were not unionized, due to Mr Nakamoto’s negative view against the labor union. However, with all these conditions, especially on Mr Nakamoto’s decision of zero increase salary, the staff began to realize the need of unionization. The Action Plan Based on the above information, I have developed an action plan to address all the issues identified. The action plan is described in detail in a table on the next pages.
