Analysis of the Influence of Self-efficacy and Professional

Development on the Performance of Local Government

Arlina Nurbaity Lubis

, Prihatin Lumbanraja

, Ramli

, Beby Kendida Hasibuan

, Erlina

and Iskandar Muda

Department of Management, Faculty of Economic and Business, Universitas Sumatera Utara, Indonesia

Department of Economic Development, Faculty of Economic and Business, Universitas Sumatera Utara, Indonesia

Department of Accounting, Faculty of Economic and Business, Universitas Sumatera Utara, Indonesia

Keywords: Government Performance, Professional Development, Self-efficacy.

Abstract: Based on the assessment of the Ministry of Administrative and Bureaucratic Reform, the average

performance grade of local governments is still low in 2016. The performance of local government is low

because the managerial performance of regional financial management is relatively low. The low

performance is expected because self-efficacy and professional development of local financial manager is

still low. This research was conducted to test and analyze the influence of self-efficacy and professional

development on the performance of local government. The research was conducted in several districts/cities

in Northern Sumatra province with the population is the regional financial manager and internal auditor in

local government. The results show that self-efficacy and professional development have a positive and

significant effect on the performance of local government. Researcher suggests improving performance, and

then the individuals involved in local financial management should be able to improve self-efficacy so that

their confidence increases in carrying out the work so that their performance will also increase. In addition,

local governments should conduct a sustainable in-house training to increase their professionalism in

carrying out their work.

1 INTRODUCTION

Based on the assessment of the Ministry of

Administrative and Bureaucratic Reform, the

average performance grade of local governments is

C which means low in 2016. Based on the

evaluation of Performance Accountability of

Government Institution, the average grade of district

and city governments throughout Indonesia in 2016

is only 49.87. 85% of local government performance

is still in the grade category of C. That number rose

slightly from the previous year's average grade of

46.39. Performance Accountability of Government

Institution is the grade of government performance.

The highest grade of the Performance

Accountability of Government Institution evaluation

is AA (satisfactory), with a score of 85 - 100. Grade

A (very good) with a score of 75 - 85, CC (good

enough) with a score of 50 - 65, C (slightly less)

with a score of 30 - 50, and grade D (less) with a

score of 0 - 30.

The main causes of low levels of local

government accountability are (1) the goals set are

not results-oriented, (2) the measures of success are

unclear and unmeasurable, (3) the defined activities

are not related to the objectives, and (4) the details

of the activities are inconsistent with the purpose of

activities. These four problems cause the use of

budget in government institutions is inefficient. If it

refers to the results of the evaluation and based on

the calculated data, there is a potential waste of at

least 30 percent of the State Budget/Local

Government Budget. One of the local governments

that achieved Gradef A is the Government of

Banyuwangi Regency, East Java. The government of

Banyuwangi Regency managed to save the budget

up to 38 percent or equivalent to Rp1 trillion. The

savings were not due to low budget absorption, but

because of their work efficiency.

Based on the evaluation results, the savings of

Rp1 trillion in public funds were achieved by

integrating planning, budgeting, and performance

management application systems. Through the

Nurbaity Lubis, A., Lumbanraja, P., Ramli, ., Kendida Hasibuan, B., Erlina, . and Muda, I.

Analysis of the Inﬂuence of Self-efﬁcacy and Professional Development on the Performance of Local Government.

DOI: 10.5220/0009897500002480

In Proceedings of the International Conference on Natural Resources and Sustainable Development (ICNRSD 2018), pages 58-64

ISBN: 978-989-758-543-2

integration, the Government of Banyuwangi

Regency managed to rearrange the focus of

activities. In 2016, there were 2,299 activities, which

can be summarized into 1,428 activities by 2017.

The government of Banyuwangi Regency adheres to

the principle of “money follows results” which is

budget oriented to the benefits of the programs. The

measurement of performance assessment involves

human resources within the local government. Based

on the main causes of the low performance of local

government, they are caused by the low performance

of employees. Many studies have examined the

causes of low employee performance, self-efficacy

and professional development. This research wants

to see and analyze what factors will influence the

performance of local government.

2 LITERATURE REVIEW

2.1 Performance of Local Government

The performance of local government is a

description of the level of achievement of the

implementation of a local government

program/activity in realizing the goals, objectives,

vision and mission of the region as stated in the

Regional Planning Document (Erlina et al.,

2017)(Erlina et al., 2017b). The performance of

local government should be informed to the public

and stakeholders on the level of achievement of

results, linked to the vision and mission of the

organization. Through this information, further steps

or corrective actions that are necessary for the

determination of the main activities/programs can be

taken, while simultaneously being used as feedback

for planning materials.

The performance level of local government is

seen from what object is done and who is

responsible to do it, the performance of local

government can be divided into (Erlina et al., 2017):

a. Program performance. Program performance is

the responsibility of the Head of the Local

Government Working Units (SKPD).

b. Activity performance is part of the program, so

a program may consist of one or more

activities. Heads of Sub-Section, Head of

Section and/or Head of Affairs shall be

responsible for the implementation of any

activity. The implementation of a number of

activities shall contribute to the realization of a

program. If there is an activity that is irrelevant

or only gives a little contribution to the

implementation of a program, it should be

replaced with other more relevant activities

which contribute more to the success of the

program.

There are three local government performance

indicators, namely: (1) Input Indicator which is

everything needed for the implementation of

activities so they can run to produce output. This

indicator measures the amount of resources such as

the budget (fund), human resources, equipment,

materials and other inputs used to carry out the

activities, (2) Output Indicator which is something

that is expected to be directly achieved from an

activity that can be physical or non-physical The

output indicator or benchmark is used to measure the

output resulting from an activity. By comparing

outputs, institutions can analyze whether the

activities have been carried out as planned. The

output indicator is used as the basis for assessing the

progress of an activity if the benchmark is associated

with well-defined and measurable objectives of an

activity, and (3) Outcome indicator which is

anything that reflects the functioning of the output of

activities in the medium term (Muda et al., 2014;

Muda et al., 2017 & Tririyono et al., 2018). The

measurement of outcome indicator is more

important than output. Outcome describes the level

of achievement for higher output that may include

the interests of many parties. With outcome

indicator, the organization will be able to know

whether the results that have been obtained in the

form of output can indeed be used properly and

provide great benefits for the community.

2.2 Self-efficacy

An auditor does not work independently in carrying

out his or her work. It is important to understand

how the interaction between people, duties, and the

environment with the auditor will affect the auditor's

performance. Bandura (Bandura, 1977) argues that

an individual’s behavior is the results of interaction

between environment and personal factors. Although

self-efficacy is a person's subjective view of his

ability, it greatly influences his actions, motivations,

persistence, and principal behavior (Bandura, 1991).

Gist and Mitchell (Gist and Michell, 1992) suggest

that self-efficacy is an important motivational

construct. It affects individual choices, goals,

emotional reactions, effort, coping, and persistence.

Self-efficacy relates to the performance of individual

tasks. Self-efficacy has a positive impact on

performance because high self-efficacy allows

people to manage effective behavior through a series

Analysis of the Inﬂuence of Self-efﬁcacy and Professional Development on the Performance of Local Government

of cognitive, motivational, and affective decision

processes.

Self-efficacy is an important construct that can

increase energy, provide direction, and stimulate

persistence [6]. In fact, self-efficacy plays an

important role for all professionals, including

auditors. The five job characteristics including skill

variation, task identity, task significance, feedback

and authority play an important role in fostering

work motivation. Because auditing is a profession

that provides services based on knowledge and

experience with human resources as a key element,

the motivation and ability of an auditor to achieve a

goal is a powerful advantage. Auditors with higher

self-efficacy tend to continue investing in goal

achievement behaviors. Therefore, self-efficacy will

influence behavior by affecting motivation and

confidence to overcome difficulties and improve

performance.

Some of the determinants of self-efficacy are

well-recognized and related factors (i.e. effort,

ability, task difficulty). Bandura shows that

persistence and level of effort mediate the

relationship between self-efficacy and performance.

Bandura states that beliefs resulted from successful

workmanship have a positive impact on

performance. Individuals who have high self-

efficacy approach difficult tasks as challenges that

must be mastered, not as a threat to be avoided.

These individuals set their goals to challenge,

maintain a strong commitment to this goal, and

persist in their efforts in case of failure. Successful

experiences not only increase personal expectations

of control and maturity of related actions, but also

provide a source of self-efficacy for further

challenges. Many studies have shown that the level

of self-efficacy can predict work behavior, job

training, work performance, job satisfaction,

educational development, and knowledge sharing.

Therefore, self-efficacy is widely regarded as one of

the important factors in determining how much

effort and resources a person invests in facing

challenges. Self-efficacy is expressed as a person’s

belief that he can perform a task at a certain level

and therefore self-efficacy is believed to be one of

the factors that affects personal activity towards the

attainment of a task.

2.3 Professional Development

Professional development is a learning process that

can encourage personal growth and improve the

quality of performance reports. There are many

obstacles to the regional financial management

process. Regional financial management is a series

of processes that begin with planning, budgeting,

administration, accountability, reporting and

supervision. The performance of local government is

measured by the overall process. Especially in terms

of budgeting activities which is done by setting

targets, benchmarks of success, suitability of

activities with objectives to be achieved as well as

details of activities which should be in line with

program objectives (Erlina et al., 2017). Knowledge

is the main input factor in carrying out the work. The

performance of government depends on the quality

of planning up to reporting and supervision. The

performance of government is also influenced by

audit quality. The assessment of auditors during all

stages of the audit, including risk assessment,

internal control evaluation, testing, and review.

Many studies have shown a positive effect of the

control process and a good review of audit quality.

Professional assessment determines audit

procedures, and professionalization provides an

advantage in client disputes. Maintaining

professional competence requires continuous

awareness and understanding of relevant technical,

professional and business developments. One

strategy to advance better performance is to utilize

modern technology. Technological advancements

allow auditors on engagement teams to conduct

electronic reviews of clients’ work at their offices or

from remote locations. Audit software reduces the

time required for preparing the paperwork. Dodgson

(Dodgson, 1993) finds that the value of knowledge

can increase exponentially when network is reused

and integrated into business practices and processes

quickly. Such applications include decision support

and expert systems, expert knowledge for specific

issues, and point-to-point knowledge. Staff members

can access industry’s best practices, studies, surveys,

statistics, and expert knowledge on specific issues.

The learning of government employees and the

government internal auditors of their work and the

choice of professional services jointly affect the

performance of local governments (Muda et al.,

2018a). The effect of learning has a positive effect

on the quality of work. In addition, Bierstaker and

Wright (Bierstaker and Wright, 2001) find that both

ability and experience are the determinants of

performance in unstructured analytic review tasks

and unstructured internal control audit tasks.

Structured problems are routinely encountered in

auditing. To solve unstructured problems, problem

solving should take advantage of experience,

knowledge, and cognitive abilities.

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2.4 Research Framework and

Hypothesis Development

Based on the previous explanation, the framework of

this study is:

Figure 1. Concept Framework

Based on the previous explanation and concept

framework, the hypothesis in this study is "Self-

efficacy and professional development affect the

performance of local government"

3 RESEARCH METHODS

The population used in this study is the regional

financial managers in the Government of Serdang

Bedagai District, Dairi Regency, Tebing Tinggi City

and Medan City. Sample is part of the population.

The sampling technique was done by sample random

sampling technique. The data of this research are

primary data and the data collecting was done by

questioner. Exogenous variables or independent

variables are variables that influence or cause the

change or the incidence of the dependent variable.

Self-efficacy is a belief in the ability of

individuals to be able to organize and implement a

series of actions that are considered necessary in

order to achieve a desired outcome. This self-

efficacy variable is a latent variable measured by

observed indicator consisting of:

1) Work and Experience

2) Confidence

3) Effort

Continuing professional development is a

continuous learning process that can encourage

personal development, improve auditing skills,

revolutionize work procedures and improve the

quality of audit reports. This variable is measured by

the following indicators:

1) Work Culture

2) Motivation to learn

3) Training Opportunities

Endogenous variable that also functions as a

dependent variable in this study is the performance

of local government. The performance of local

governments is the performance of individuals who

are responsible for regional financial management

processes. The indicators of local government

performance are:

1) Efficiency

2) Quality of Service

3) Effectiveness

The analyses used to answer the hypothesis

testing are descriptive statistics and Structural

Equation Model (SEM) analysis. The data analysis

was done by using the help of computer technology

that is PLS.

4 RESULTS AND DISCUSSION

4.1 Result

The descriptive statistics obtained from the answers

to the return questionnaires on the research variables

are presented in Table 1 below.

Table 1. Descriptive Statistics

Variables N Minimu

Maximu

Mean Cate

Self-efficac

(

)

93 3.00 5.00 3.9882 Goo

Professional

Develo

ment

(

)

93 3.42 5.00 4.0975 Good

Performance of

Local Government

(

)

93 3.49 5.00 4.1011 Good

The outer model test begins by estimating the

parameters by performing a calculation of PLS

algorithm as follows:

Figure 2 Output Calculation PLS

Based on the output analysis, the model of

measurement (outer model) can be evaluated by

testing the convergence validity, discriminant

validity and reliability. Convergent validity test is

done by looking at the value of loading factor in

each construct. Based on the calculation of data with

PLS algorithm method, the value of loading factor of

each variable indicator can be seen in Table 2.

Analysis of the Inﬂuence of Self-efﬁcacy and Professional Development on the Performance of Local Government

Table 2. Value of Loading Factor

Variable

ames

Symbol

Facto

Conclusion

Self-efficacy

)

X1.1 0.879 Vali

X1.2 0.895 Vali

X1.3 0.914 Vali

X1.4 0.948 Vali

X1.5 0.917 Vali

Professional

Development

)

X2.1 0.827 Vali

X2.2 0.855 Vali

X2.3 0.881 Vali

X2.4 0.902 Vali

X2.5 0.847 Vali

Performance of

Local

Government

(Y)

Y1 0.885 Vali

Y2 0.919 Vali

Y3 0.816 Vali

Y4 0.918 Vali

Y5 0.812 Vali

Composite reliability measures the true value of

a construct's reliability. A construct is said to be

reliable if the value of composite reliability is more

than 0.7 (Nasution et al., 2018; Kesuma et al.,

2018a; Kesuma et al., 2018b; Erlina et al., 2017a;

Erlina et al., 2017b). The results of reliability test on

each variable can be seen in Table 3 as follows:

Table 3. Value of Composite Reliability

Variables

Composite

Reliabilit

Description

Self-efficacy (X

) 0.914

Reliable

Professional

Develo

ment

(

)

0.949

Reliable

Performance of Local

Government (Y)

0.916

Reliable

Based on Table 3 above, it can be seen that the value

of the composite reliability of each construct is

above 0.70, so it can be stated that the indicators

used in this study are reliable. After the estimated

model meets all the criteria, then a test of the

structural model (inner model) is taken. Assessing

the inner model is to see the relationship between the

latent constructs, by looking at the estimation results

of the path parameter coefficients and their

significance levels. The structural model in the PLS

is evaluated by using R-square for the dependent

variable and the path coefficient value for the

independent variables which then their significance

are assessed based on the t-statistic value of each

path. The results of PLS algorithm on Smart PLS

program in assessing the value of path coefficient

can be seen in Table 4.

Table 4. Value of Path Coefficient

Variables

Performance of Local

Government (Y)

Self-efficac

) 0.316

Professional

Development (X

)

0.223

Based on Table 4, the structural equation is formed

as follows:

Performance = 0.316 Self-efficacy + 0.223

Professional Development + e (1)

This study concludes that the variation of local

government performance can be explained by

constructive variables (self-efficacy, professional

development and quality of internal audit) which

equals to 74.9% while the rest of 25.1% are

influenced by other variables which are not found in

the research model. The hypothesis testing is done

by looking at the value of t-statistics generated from

the bootstrapping process. The results of the

bootstrapping process on Smart PLS program can be

seen in Table 5 below:

Table 5. Value of t-Statistics

Exogenous

Endogenous

Path

Analysis

Statistics

P-

Values

Conclusion

Self-efficacy

)

Performance

of Local

Government

(Y)

0.316 2.613 0.009 Accepted

Professional

Development

)

Performance

of Local

Government

(Y)

0.223 2.006 0.045 Accepted

Based on the results of the test, it is concluded that

self-efficacy and professional development have

positive and significant influence on the

performance of local government.

4.2 Discussion

Based on the hypothesis test that has been done, it

can be concluded that self-efficacy variable has

positive effect and significantly influence local

government performance. The results of this study

support the results of previous studies. Confidence

or self-efficacy is an individual's belief in his or her

ability to mobilize motivation, cognitive resources

and necessary actions for the situations at hand

(Badara and Saidin, 2013). Self-efficacy has a

significant impact on management performance.

There is a significant and positive relationship

between self-efficacy and job involvement of

government employees in the field of supervision. If

someone has a high self-efficacy, he/she will be able

ICNRSD 2018 - International Conference on Natural Resources and Sustainable Development

to develop a strong personality, reduce stress and not

easily affected so he/she can has a good

performance.

Self-efficacy can specifically demonstrate the

confidence of regional financial managers for their

ability to complete a given task. Individuals with a

high level of self-efficacy will feel confident in their

performance capabilities. The most important factor

in self-efficacy is past experience. If at one period an

auditor can complete a task and succeed in his

performance, then he will tend to build confidence

and belief in his ability to complete the task

successfully. Self-efficacy can be weak if someone

repeatedly fails to perform a task well. Regional

financial managers need to have an understanding of

emotional quotient in order to regulate the emotions

that arise in the implementation of their

performance. Regional financial managers who

have high self-efficacy will be able to develop a

strong personality, reduce stress and not easily

affected so that they can produce good performance.

The results of the study conclude that

professional development has a positive and

significant impact on the performance of local

government. In addition, the level of education and

work experience of a person are added values for

each individual. Managers who have a high

academic degree are assumed to work better by

implementing their knowledge and intellectual

potential with their skills and expertise. In the

discovery of Libby (Libby and Luft, 1993), it is

stated that work experience can add and accumulate

the basic knowledge of a person in carrying out his

work. Professional Development is a combination of

approaches and techniques that will help manage

individual’s development and learning. Professional

development serves to maintain and enhance the

knowledge, capability and quality of a professional

individual. As explained before that every individual

in a company, institution or organization is the

greatest asset, so the company is not only looking

for superior seeds or competent personnel, but the

company must also maintain them. Regional

financial management regulations are subject to

change. They must be able to follow the regulatory

changes and improve the understanding of the

regulation. Based on that, professional development

on an ongoing basis is needed.

5 CONCLUSION

The results of this research conclude that self-

efficacy and continuing professional development

have positive and significant influence to the

performance of local government. The performance

of local government is relatively low due to the

performance of the regional financial managers is

still low. One of the low performance indicators is

the non-performing activities that have been

budgeted. The lack of activity is due to some

financial managers are hesitant to carry out the

activities, lacking the confidence to carry out such

activities, because they are worried about being

involved in legal cases. Their self-efficacy in

carrying out activities is low. Incomprehension of a

regulation related to regional financial management

can be enhanced by the enhancement of professional

development.

6 SUGGESTION

Based on the results of the research which show that

the performance of government is influenced by

self-efficacy and continuous professional

development, therefore it will be better for the local

government to improve self-efficacy and develop

professionalism of financial manager in local

government in a sustainable manner. Self-efficacy

can be improved by giving motivation and

increasing the confidence of regonal financial

managers. In addition, with the in-house training that

should be done frequently, the development of

professionalism of regional financial managers will

be better.

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