Large State-owned Enterprise' Performance Appraisal Study

Under the context of world's economy globalization, enterprise'objective has been shifting from profit maximization to value enhancement. Performance appraisal, as part of enterprise'strategic management, now is not only an important means of incentive and constraint, but also an important tool for enterprise to apply its value strategy in the new competitive environments. With the rapid development of information technology, enterprise'external environments, organizational structure, and management model have been profoundly changing, and performance appraisal has also shown a new trend of development. In this paper, on the basis of reference of the available researches on performance appraisal, the author further studied large state-owned enterprise'performance appraisal, and develop a performance appraisal system based on enterprise'value strategy.1. Constructing a performance appraisal system. On the basis of comprehensive illustrations of enterprise'value strategy theory, the paper proposed that, with all the resources the enterprise could operate in a certain way in the market, the enterprise'value represents the degree of rarity to the investors as a whole, and enterprise's performance is a concrete manifestation of its growth of value. With an in-depth study on three major strategies which would have impacts on enterprise'value, that is, value sources, value drivers, and value image, the paper analyzed and summarized the drivers. Moreover, the paper developed a performance appraisal model with the application of the value strategy thoughts. In the meanwhile, such appraisal model is embedded in the Chinese traditional culture factor so that it reflects the characteristics of China's state-owned large enterprise in a better way.2. Designing performance appraisal indicators. Based On the performance appraisal model and judgment on the main body of enterprise's value, with the reference of latest research on EVA, BSC, and competitive strategies, etc., the paper designed the key performance indicators on the respects of enterprise's value sources, value drivers, and value image, to build up an interactive multi-tiers business performance appraisal system, which integrates economic and financial indicators, together with quantitative and qualitative indicators.3. Selecting a suitable assessment approach. Different appraisal approaches produce different results. Enterprise should choose different performance appraisal approach based on its different industries, environments, growth phase, and development strategy. In that case, the paper applied mathematical method to analyze three appraisal approaches emphasizing the different perspectives, so each enterprise could select different performance appraisal approach in line with its own status and needs.4. Discussion on enterprise incentive mechanism. One of the important roles of performance appraisal is to build up enterprise's incentive mechanism. With the integration of incentive mechanism and value strategies by performance appraisal, the incentive tactics could tie closely with the ultimate goal of enhancing enterprise value. And in that way, all the incentive factors could link together to develop an organic integration which combines material incentives and non-material ones, and uniforms external incentives with internal ones.