“If you cannot measure it, you cannot improve it.” In 2012, Sinar Mas Land implemented Key Performance Indicators (KPI) as a tool of performance management. KPI is a measurement that evaluates how a company executes their strategic vision. By implementing KPI, Sinar Mas Land hopes to improve their performance, both in financial and human capital terms. This study aims to assess the implementation of KPI within the years 2012 to 2014, and to assess the difference of before and after the implementation towards Sinar Mas Land Asset Management’s revenue and operating margin (EBIT margin) growth.
The method used in this research is to conduct a comparative study to the revenue and operating margins of the company’s ‘before’ years (2009-2011) and ‘after’ years (2012-2014). By comparing those numbers, the difference of before and after the KPI implementation can be assessed.
The study found that there is indeed a difference after the implementation of KPI. Sinar Mas Land Asset Management had more growths of revenue during 2012-2014, compared to those in 2009-2011. However, the Operating Margin did not increase. This shows that KPI brings differences to the company’s financial performances. Even so, results can differ for each company, because every company can adjust and execute the KPI implementation differently. Sinar Mas Land Asset Management has not paid much attention to costs as they were on Revenue.
Based on this result, Sinar Mas Land Asset Management can focus more on cost efficiency to increase their Operating Margins. Also, different KPI metrics can be implemented to each division, because every division has different work activities and results.
Key words: Key Performance Indicator, Achievement, Revenue, Operating Margin