CONTENTS 03 BACKGROUND os COMPANY PROFILE 09 THEORY OF PERFORMANCE MANAGEMENT SYSTEM 7 COMPANY PERFORMANCE MANAGEMENT SYSTEM 21 EVALUATION OF PERFORMANCE MANAGEMENT SYSTEM 26 SUGGESTION TO IMPROVE PERFORMANCE MANAGEMENT SYSTEM 28 CONCLUSION 29 REFERENCESBACKGROUND The primary reason any organisation exists is not to make profit out of its operation but to sustain. Profit however has the major concern on sustainability but it comes at very later stage once the organisation has proved its worth in the society. Employee as the most important asset in the company should do their work better to make company run more effectively and gain more profit. Employee can do their work better in the workplace if they satisfy with their job. In order to increase employee satisfaction, the company should make a proper performance management system. In the book “Strategic performance management” the author defined Performance appraisal as “a systematic & holistic process of work, planning, monitoring and measurement aimed at continuously improving the teams and individual employee's contribution to achievement of organizational goals” (Akata, 2003). This depicts that performance appraisal is used as a ‘means of establishing future goals, monitoring employees’ progress based on specified job description, and measuring performance, teamwork and achievements based on specified tasks that can be linked with organizational goals and objectives. Furthermore, performance appraisal is used to formally determine employees’ effectiveness and contribution (ikramullah et al, 2011).The primary aim of performance appraisal is to improve the effectiveness of an organization by assessing the impact of individuals employed in it (Cumming, 1972). Performance appraisal generally plays two dominant roles: judgmental and developmental (Cummings and Schwab, 1973; Daley, 2002; Condrey 2010). Although, these two categories are often seen as potentially confli ing, they both share the ultimate goal of enhancing productivity. As part of larger performance evaluation system, organizations conduct appraisals to serve the purpose of improving employee effectiveness (Denisi and Robert D. Pritchard 2006),COMPANY PROFILE Established in 1995, PT Prudential Life Assurance (Prudential indonesia) is the leading provider of life insurance services in Indonesia and is part of Prudential plc, a leading group of financial services companies in the United Kingdom. As part of the Group with more than 168 years of experience in the life insurance industry, Prudential Indonesia is committed to developing its business in Indonesia, Since launching a life insurance product linked to its first unit link in 1999, Prudential Indonesia is the market leader for these products in Indonesia. Prudential Indonesia has established a sharia business unit since 2007 and is believed to be the leader of the sharia life insurance market in Indonesia since its founding, Prudential Indonesia is headquartered in Jakarta with marketing offices in Medan, Surabaya, Bandung, Denpasar, Batam and Semarang. As of December 31, 2016, Prudential Indonesia served more than 2.4 million customers through nearly 260,000 licensed marketers in 393 Mandiri Marketing Offices (KPM) throughout the archipelago (including in Jakarta, Surabaya, Medan, Bandung, Yogyakarta, Batam and Bali MISSION & CREDO “Being the best Retail Financial Services company in Indonesia, surpasses the expectations of customers, marketing personnel, staff and shareholders by providing perfect service, quality products, professional marketing personnel who are highly committed and generate profitable investment income.”Four Pillars of Mission As an inseparable part of the Mission, PT Prudential Life Assurance has Four Pillars, which are the foundations that are the foundation of the company's standing and development and that distinguishes it from other companies. The following are the Four Pillars: 1. The spirit to always be the best Togive the best and improve the ability to get the best results too. 2. Organizations that provide learning opportunities Providing opportunities for everyone in the company to gain knowledge, expertise and personal development through sharing training. 3. Work asa family Wo! 1g as a big family with respect and love to create an understanding atmosphere. 4. Integrity and Benefits that are evenly distributed to all parties related to the company Commitment to always having integrity in every way, providing the best service for customers, valuing everyone fairly based on business value added, communicating clearly and providing good income to everyone (without discrimination). Credo “Just by listening, we can understand what is needed by the community, and only by understanding what is needed by the community, we can provide products and levels of service as expected.”CORE VALUES 1, Innovate and create opportunities 2. Showing caring and understanding 3. Working together 4. Give the best ORGANIZATION STRUCTURE oe a £2 82222 L220228 228208 2aaas Figure 1. Organizational Structure of Prudential IndonesiaCAREER PATH FOR PRUDENTIAL AGENCY OacL Orr Po Year Year2 SCOPE AND LIMITATION The scope and limitation of this research is specified to Prudential company’s Freelance Agents in Indonesia.THEORY OF PERFORMANCE MANAGEMENT SYSTEM Performance Management. Performance management refers to a more advanced application of performance measures and data to common processes. The National Performance Management Advisory Commission defined performance management as “an ‘ongoing, systematic approach to improving result through evidence-based decision making, continuous organizational learning, and a focus on accountability for performance. Unless performance measures are required for making day-to-day management decisions and linked with decision-making processes (such as budgeting), it is difficult for an organization to use data in ways that will improve decisions and, as a result, improve service. This is why governments can spend considerable resources on measuring and reporting but fail to achieve any real benefits ~ integrating measures with the decision-making processes is the key to success. Establishing a Process Governments that attempt to manage performance often struggle, at least initially, to find the best approach. Defining performance management is one thing; implementing it is another. Many organizations approach performance management as if it were a stand-alone process like budgeting, purchasing, or human resources, or like a special project - they establish a process with associated rules and requirements (for instance, departments must establish at least two measures and reports must be monthly), and require staff to complete their performance management tasks in addition to their normal job responsibilities. This approach separates performance management from other essential government processes. If the effort is going to succeed, however, organizations need to do exactly the opposite. If a performance management effort is perceived as a separate process, it will likely face moreresistance than it otherwise would, since it will be viewed as an additional burden that is not necessarily connected to organization’s mission. But it staff members see performance management as an enhancement to an existing process, they are less likely to resist it. For example, few department managers call for eliminating the budget process, however unpopular it might be. Performance management cannot be approached as a process in itself; it is instead a common set of principles for improving existing business processes. Ideally, performance management is best hidden within the existing process. The focus remains on the process, and the outcome of that process remains unchanged. For example, budgeting still attempts to achieve the best allocation of funds. Performance management improves that outcome rather than creating a different or additional one. Understanding performance management requires organizations to recognize both what performance management is and what it is not. It is more than simply collecting and reporting performance data, and it is not an independent process. In its own, the exercise serves little purpose other than generating additional work in collecting and reporting data. But when combined with existing processes and embedded within them, performance management becomes a powerful tool that can be used to make better decisions, promote transparency and accountability, and ultimately yield better results. How to Improve Performance Management Believing that performance management activities can impact that bottom line, the challenge becomes how to maximize the effectiveness of performance management system. implementation and maintenance. The following are specific strategies which HR. professionals can use to develop a new or enhanced performance management system that. increases organizational performance and is accepted and embraced by managers and employees. Get Executive Involvement Selling the CEO and executive committee on the benefits of a new or enhanced performance management system and having their support increases exponentially the program’s chances of being embraced by managers and employees. Having the project arise based on the interest or initiative of the CEO is even better. In 10organizations across all industries, more CEOs are embracing performance management as a tool for communicating goals and performance expectations and holding employees accountable for those goals and expectations. Include Employees and Managers in the Design Process Too often, performance management systems are designed in back rooms or behind closed doors, with little input from the users or beneficiaries of the system ~ managers and employees. If possible, utilize a team of managers and/or employees in the design process. This will increase buy-in for the new system and, with proper guidance, result ina system that is more relevant, meaningful and appropriate for organization. Train Managers in Performance Management In many cases, the problem with and organization’s performance management system is not in its design or the performance criteria, but in the inability of managers to effectively implement and administer the system. Managers need training in using the performance management tool (including completing the forms and/or calculating ratings), setting goals and conducting effective performance management discussion year round. In addition, this training should be offered on a recurring basis for new managers or those wishing to refresh their knowledge of the skills critical to effective performance management. Without a strong commitment to training managers in performance management, most organization can expect a less that acceptable level of success and satisfaction with the performance management program Discuss Performance Management as a Manager's Goal In too many organizations, managers view performance management as an annoyance, “an HR activity,” or a process that must be completed in order to be “in compliance.” The first step in changing this attitude is to make sure the performance management system is a value-added process that gives managers a viable tool for achieving organizational objectives and provides employees with meaningful performance feedback throughout the year. Assuming these objectives are met, the importance of completing the performance management process can be emphasized 1by including it in the annual goals for all managers with performance management responsibility. Review the Performance Management System Annually Implementing an entirely new performance management system design every year will not lead to any effective outcomes. But making carefully planned enhancements annually or biennially will allow the system to be continually improved and modified to meet changing organizational needs. Link Improved Employee Performance and Increased Customer Satisfaction As many organiz ions differentiate their products and services through customer intimacy strategies. The approaches taken to customer relationship management (CRM) have significant implications for both customer-facing employees and those who support customers less directly. This creates the opportunity for HR to add value by linking assessment and selection, performance evaluation, reward and learning to the CRM strategy. By providing employees with better information on performance expectations, results, strengths and development needs. The performance management program can improve the organization’s customer service. The importance of these activities and the expectation of HR to be a contributing partner in improving customer service are illustrated in the Deloitte & Touche 2000 Human Resources Practice Survey. Consider the Culture, Structure and Work Force in the Performance Management System Desian It is easy to get wrapped up in developing the perfect behavioral definition of ‘competencies; the operational measures that are feasible based on available data, or the cycle that will best fit with the fiscal year. However, consideration also should be given to organization's culture and workforce demographics when designing the performance management system and developing the training. A system with the most academically correct competencies or performance measures may fail ifit does not fit with the company’s culture or work force. For example, organizations with a more traditional, hierarchical structure and culture may need more time for 12introduction and training on a multirater tool or new competencies than younger. Flatter organizations which are more fluid and less steeped in hierarchical characteristics of top-down feedback and control and command. Further, a younger workforce may have a different reaction to team or project evaluations that an older workforce accustomed to traditional individual evaluations. The essence of management as a set of complex procedures and activities is influencing on a particular system in order to change the system towards achieving defined development objectives. In this sense, it is still the current definition of management, which was established by Mary Parker Follett. This classical theorist of management defines management as the ability to get the job done by efforts of people. In modern theory, there are many definitions of the term "management" (Murugan, S.,2005) Achieving results through the effort of people; Creating and maintaining an internal environment in a company where individuals, working in groups may operate efficiently and effectively in order to achieve common goals; The process of planning, organizing, leadership and controlling in order to formulate and achieve the objectives on the basis of human labor and use of resources; The process in which managers create, implement and manage the organization through a systematic, coordinated and cooperative human effort; Coordination of all resources in the process of planning, organizing, leading and controlling in order to achieve the set goals; The task of planning, coordinating, motivating and controlling the efforts of others towards achieving the specific objectives; The art of knowing what you want to do and accomplishing that in the best and cheapest way; The process of decision-making and control over the efficiency of employees with the obvious intention of achieving predetermined goals; 13© The process of planning, organizing, staffing, leading and controlling in order to achieve organizational goals through coordinated use of human and material resources (Rao, V.S.P. Krishna, H.,2009) According to Kreitner, management is a working process, in which, with the help of others, organizational goals in a changing environment could be achieved (Kreitner, R., 2009)(Barrows, E., Neely, A., 2012). Effective and efficient use of limited resources is a key aspect in the management process. Managements effective if the set up goals are achieved and efficient if limited resources are exploited rationally. Armstrong and Murlis indicate that the philosophy of performance management is strictly linked to the belief that itis the natural and fundamental process of management (Armstrong, M., Murlis, H., 2007). In performance management, emphasis is placed on planning, monitoring, measuring and improving performance. Therefore, it should be viewed as a process driven by the management, which becomes part of their everyday working practices, rather than as an annual bureaucratic task imposed by the Department of Human Resources. Authors Beardwell and Claydon point out that the performance management is a mechanism for controlling the values (Beardwell, J., Claydon, T., 2010). Skills that a manager needs in order to carry out the process of organizational performance management are often underestimated. Managers must know how to set clear, measurable and achievable objectives and how to define and assess capability requirements. In addition, managers must know how to provide useful feedback and to know not only how to praise or criticize employees about their achievements, but also to educate them and help them recognize where their performance was below plan/standards and what should be improved (Armstrong, M. Murlis, H., 2007). According to Aguinis, performance management is a continuous process of identifying, measuring, developing and harmonization of a company performance with strategic goals (Aguinis, H., 2013). Hartle and Weiss claim that performance management is the process of establishing a common agreement on what we want to achieve and how it should be achieved, as well as the approach to managing and developing people in a way that increases the likelihood of achieving organizational goals (Hartle, F,, Weiss, T.8., 2002). Van der Waldt believes that performance management can be defined as an approach to management that 14combines individual managers and employees towards a common achievement of the strategic goals of the company. It is an integrated set of techniques and methods aimed at improving the productivity, the quality of the relationship between inputs, activities and outputs of company and as a management approach based on individual contribution of managers and employees in achieving the strategic goals (Van der Waldt, » 2004). Eckerson identifies performance management with the term “performance dashboards" where both of the processes are observed as a system designed to manage the performance of the organization. Performance dashboards is defined as a multi-layered application based on business intelligence and data integration that enables the organization to effectively measure, monitor and manage business performance (Eckerson, W., 2006). Group of authors identifies three basic purposes of performance management (Nel, P., Werner, A., Du Plessis, A., Poisat, P., Sono, T., 2011). : first, it is the process of implementing the strategy; secondly, it is a means of cultural change; and third, it provides development and reward. Therefore, the performance management of the company is extremely comprehensive and complex topic. Brief overview of performance management can be summarized in the following few items (Armstrong, M., 2006). Performance management is linked to outputs (achievement of results) and outcomes (realized impacts on performance). In addition, this refers to the processes needed to achieve these results, and inputs, in terms of capacity (knowledge, skills and competencies) that is expected from teams and individuals. Performance management relates to planning, which is the initial step in achieving future success. This refers to the definition of expectations in the form of the goals and business plans. Performance management is related to measuring results and controlling the progress of achieving the objectives, because if there is something you cannot measure, you cannot manage it. In addition, “performance measurement system consists of three components: data collection and processing, analysis and action” (Markié, D., 2014). Enterprise performance management refers to continuous improvement. This correlation is based on the fact that continuous striving for achieving high standards in every part of the organization consequently provides a series of incremental gains that will create superior performance. This means clarifying what is meant by 15organizational, team and individual effectiveness, and taking the necessary measures in order to achieve defined levels of effectiveness (Rummler, G., Brache, A., 2013). According to Armstrong and Murlis this means: “establishing a culture in which managers, individuals and groups take responsibility for continuous improvement of business processes and their own skills, abilities and contributions” (Armstrong, M., Murlis, H., 2007). Performance management is associated with the continuous development. Itis linked to the creation of a culture in which the organizational and individual learning and development are continuous process. The really goal of performance management system is that it puts the focus on continuous development of company’s employees (Murugan, S., 2005). Performance management is connected with communication. This is achieved by creating the organizational atmosphere in which the focus is on creating an ongoing dialogue between managers and their teams, who together define expectations and share information about organizational mission, values and goals. Performance management is associated with stakeholders. This means meeting the needs and expectations of all stakeholders of a company - the owners, managers, employees, customers, suppliers and the publicity. In particular, employees are treated as partners ina company whose interests are respected, whose proposals are seeking and listening and who are encouraged to contribute to the formulation of their personal and team goals and plans. Performance management refers to fairness and transparency (Murugan, S., 2005). ‘As suggested by Winstanley and Stuart-Smith, the four ethical principles that should govern the activities within the performance management are (Nel, P., Werner, A., Du Plessis, A., Poisat, P., Sono, T., 2011): respect for the individual, mutual respect, procedural fairness and-—stransparency —of__— decision-making. 16COMPANY PERFORMANCE MANAGEMENT SYSTEM 1. Appraisal systems Prudential company has many agencies in Indonesia, there are 408 agencies with a total of approximately 227 thousand agents spread throughout Indonesia. The Agency is a branch of the Prudential company that was established by agents who have succeeded and then they created their own agency branch. Prudential’s performance appraisal for its agent is based on their performance. Their performance is judged from the total turnover they get from insurance sales or the number of customers they have. The more customers they get, the greater the total turnover and their performance will increase. The agents will always update their customer data through Google Drive that is connected with their leader. Therefore, the leader performs an appraisal performance based on existing data on Google Drive and also the agent’s reports to their leaders. Only the head office of Prudential Company who has a human resource division, so in each branch all assessments of agents are carried out by their leaders. The leader who oversees agents is called the Associate Agency Director (AAD). There are 10 levels of agents (from the lowest level to the highest level), namely: 71. Agents 6. Agency Director 3 (AD3) 2. Associate Agency Director(AAD) 7. Agency Director 4 (AD4) 3. Agency Director (AD) 8. Agency Director 5 (ADS) 4, Agency Director 1 (AD1) 9. Agency Director 6 (AD6) 5. Agency Director 2 (AD2) 10. Executive Agency Director ‘AAD's performance appraisal is assessed by AD, AD performance appraisal is assessed by AD1, and so continues until AD6's performance appraisal is assessed by the Executive Agency Director. The results of the performance appraisal obtained by each agent are confidential, they only know their own appraisal performance. Hence, the performance appraisal is not transparent, because the agent's performance describes the salary they will get. Agents motivation In insurance companies, agents do not have the basic salary they can receive every month. At Prudential, the salary that the agent gets is a commission from the customer's insurance premium. Agents will get a commission of 30 percent from customer premiums for the first two years, and the commission drops to 5 percent from the 3rd year to the Sth year. SP oe eee ce ie 30% 30% 5% 5% 5% 12% —-13,5% 42% 43.5% = 5% 5% 5% Figure 2. Commission and reward system in Prudential Indonesia 18In addition to the commissions they get, they can also get rewards in the form of cash and holidays trip. Reward calculations at Prudential are conducted every one year. In ‘one year, the turnover of agents is assessed, they will get a reward of 12 percent in the first year, 13.5 percent in the second year, and 12 percent in the third year and so on from their total turnover. If they want to get holiday trip rewards, the agents must be able to have a turnover worth 650 million rupiah. Compensation for leaders other than commissions and rewards, they get a bonus called over-riding. Overriding is a bonus comes from their services which have led agents under them. Employee relation The employee relations at Prudential are good. Although agents are under the auspices of different leaders, they often gather to share knowledge. However, there are limits that should not be shared to agents from different leaders, namely the turnover they get, because turnover is a sensitive thing for insurance agents. Recruitment At Prudential, there is no complicated recruitment system. Applicants can apply directly to the head office and a leader can also do closed recruitment. To become an insurance agent, applicants must have qualifications from the Indonesian Life Insurance Association (AAII). AAII's quali ns is to show that new agents have trusted qualifications to sell insurance to customers. The new agent will be under the aus} es of one leader. The leader is responsible for directing and controlling the performance of the agents so that their performance can continue to increase. Promotion Promotion carried out by Prudential depends on the achievements of the agents. The agents must be able to achieve a turnover worth 450 million rupiah and maintain a persistency of 75 percent to get a promotion. Persistency is the level of persistence of agents to keep their customers to always pay for their insurance policies. 196. Training When becoming a new agent at Prudential, Prudential did not hold special training to train new agents. The new agents are trained by their leaders. They can also directly attend the training held by Prudential every week. Prudential will open training classes for agents so that their performance and qualification can improve. 20EVALUATION OF PERFORMANCE MANAGEMENT SYSTEM EFFECTIVENESS OF PERFORMANCE MANAGEMENT SYSTEM Performance management system is considered effective if it fulfills criterias as follows: ‘© Clarifying Job Responsibilities and Expectations In Prudential, the agents have clear responsibilities and expectations. Agents have their own responsibility of making deals with customers. The more customers they get, the greater the total turnover and their performance will increase. The agents have to update their customer data through Google Drive that is connected with their leader. ‘Their working expectati can be measured from the reward given compared to the job they did. However, the performance and result of employee can only be driven from the way they think that the job they are ‘working in is important, which can be ineffective when the agents do not think that the job is important. ‘* Enhancing Individual and Group Productivity Prudential tries to enhance their agents’ productivity through rewards and incentive that could be gotten if they perform well. The rewards consists of passive incomes, holiday trips, or cash bonuses, there is also a reward called over-riding for the team leader. The team leader is responsible for team motivation which also influence team productivity. 21Developing Employee Capabilities through Effective Feedback and Coaching Each agent’s performance is assessed by the leaders or also called as Associate Agency Director (AAD). The results of the performance appraisal obtained by each agent is confidential. Agents only know their own performance appraisals result. Hence, the performance appraisal is not transparent. The performance appraisals result also determine the income for each agent. For agents who are very concerned on financial return, the performance appraisals result will be an effective motivation Not all agents’ are guaranteed to get performance feedback which is more personal It depends on the team leader. For coaching, new agents are usually assisted by their team leader for several months before they work on their own. Besides, training is also conducted and become the agent’s responsibility before they could get their incentives. Providing a Basis for Making Operational Human Capital Decisions (e.g, pay, promotion) The pay system in Prudential mostly based on performance which is measured from each agent customer turnover. This system makes clear decision for the incentives and rewards that agents can get. Promotion is also decided from customer turnover. The agents must be able to achieve a turnover worth 450 million rupiah and maintain a persistency of 75 percent to get a promotion. Persistency is the level of persistence of agents to keep their customers to always pay for their insurance policies. There are no other requirements needed for promoting. Improving Communication between Employees and Managers The communication among team really depend on team leader, since all performance appraisal held by the team leader. Team leaders can do some bonding within the team to build good relationship and communication between the team members. 22COMPARISON OF PERFORMANCE MANAGEMENT SYSTEM WITH THEORY 1, Input, Output, and Outcomes Performance management is linked to outputs (achievement of results) and outcomes (realized impacts on performance). In addition, this refers to the processes needed to achieve these results, and inputs, in terms of capacity (knowledge, skills and competencies) that is expected from teams and individuals. In Prudential Indonesia, they has human resources division only at the head office. For each branch, they do not have an HR division. Input and output for performance of each agents are assessed by their leader. Leaders also try to improve the knowledge, skills and competencies of agents that influence their performance. Performance Planning Performance management relates to planning, which is the initial step in achieving future success. This refers to the definition of expectations in the form of the goals and business plans. Each brand in Prudential Indonesia used google drive to monitoring planning of each employee. In google drive, their leader can control the progress of the agents to what extent. The leader also always remind their agents to improve their performance even though there are no set target for the agents. The target only exist for the one who wants to be promoted. Performance Evaluation Performance management is related to measuring results and controlling the progress of achieving the objectives, because if there is something you cannot measure, you cannot manage it. In addition, “performance measurement system consists of three components: data collection and processing, analysis and action” Performance evaluation in Prudential Indonesia is using the leader measurement. Data collection that agents give to their leader and data that connected between agents and their leader through google drive become a reference for leaders to assess the performance of agents. 234. Continuous Improvement Enterprise performance management refers to continuous improvement. This correlation is based on the fact that continuous striving for achieving high standards in every part of the organization consequently provides a series of incremental gains that will create superior performance. This means clarifying what is meant by organizational, team and individual effectiveness, and taking the necessary measures in order to achieve defined levels of effectiveness. According to Armstrong and Murlis this means: “establishing a culture in which managers, individuals and groups take responsibility for continuous improvement of business processes and their own skills, abilities and contributions” In Prudential indonesia, the agents always try to improve their performance to get superior performance. They always take part in training held by the company so that their self-quality increases. When they improve their quality, they will also be more effective at work and can have a good impact on the company. 5. Continuous Development Performance management is associated with the continuous development. It is linked to the creation of a culture in which the organizational and individual learning and development are continuous process. The really goal of performance management system is that it puts the focus on continuous development of company’s employees. In Prudential Indonesia, new agents are developed by their respective leaders. They can also directly attend the training held by Prudential every week. Prudential will open training classes for agents so that their performance ca prove. 6. Communication Performance management is connected with communication. This is achieved by creating the organizational atmosphere in which the focus is on creating an ongoing dialogue between managers and their teams, who together define expectations and share information about organizational mission, values and goals. 24Communication in Prudential Indonesia really depend on team leader. Team leaders can do some bonding within the team to build good relationship and communication between the team members. The employee relations at Prudential are good. Although agents are under the auspices of different leaders, they often gather to share knowledge. Meeting the Stakeholders Needs and Expectations, Performance management is associated with stakeholders. This means meeting the needs and expectations of all stakeholders of a company - the owners, managers, employees, customers, suppliers and the publicity. In particular, employees are treated as partners in a company whose interests are respected, whose proposals are seeking and listening and who are encouraged to contribute to the formulation of their personal and team goals and plans. The agents in Prudential Indonesia, they are treated as a partner who sells company products. They are always trying to meet the expectations and needs of stakeholders by selling the product. Performance Review Performance management refers to fairness and transparency. As suggested by Winstanley and Stuart-Smith, the four ethical principles that should govern the activities within the performance management are: respect for the individual, mutual respect, procedural fairness and transparency of decision-making. In Prudential Indonesia, Agent performance is judged from the total turnover they get from insurance sales or the number of customers they have. The more customers they get, the greater the total turnover and their performance will increase. The results of the performance appraisal obtained by each agent are confidential, they only know their own appraisal performance. Hence, the performance appraisal is not transparent, because the agent's performance describes the salary they will get. 25SUGGESTION TO IMPROVE PERFORMANCE MANAGEMENT SYSTEM 1. 3. ‘Assessment from co-workers Agents are only be assessed by their leaders only. By adding assessment or feedback from co-workers from the same team, it can give the leader different point of view and can give the agents many feedback not only from the leader. So the agent will use this feedback to improve themselves. ‘Ask for customer feedback The company can ask for customer feedback to evaluate agents behavior. Even though agents’ salary is based on the turnover they get, but customer feedback can help the company and leaders to evaluate their agents about the quality of their work and can use the evaluation as a consideration for their rewards. Also it can motivate their agents to give better service for their customers. Mandatory training or orientation for new agent When new agents get accepted in the company, it is important for them to know more about the company. This training or orientation can help these new agents to know about the vision, mission and company values so that they can implement it when 26they work. This activity perhaps can make the agents more engage to the company and motivate them to work harder. Clear procedures for leader to held training for their agents Since the agents only get training from their leader, the leaders should be given the procedures on how to assess and train their agents because the leaders are responsible for their agents. Awards Prudential only have rewards in a form of cash or holiday trips. Awards in a form of trophies perhaps can motivate agents to work harder because of this awards, they can get recognition and maybe it can help them to gain more customers and get promoted. 27CONCLUSION For Prudential, as a leading insurance company in Indonesia, performance management is very important in the business. The current performance management system has been effective and appropriate for the company. However, there are still some things in the system that can be improved by the company to make the performance management better and more effective. 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