Research On Performance Evaluation And Incentive Mechanism Of Managers

Nowadays, performance evaluation and incentive mechanism is an issue concerned by the research and practice fields of west and east. With the change of society and economic environment, the content and the emphasis of enterprises management have changed drastically, and performance evaluation is becoming the foundation of incentive mechanism day by day. Meantime, the traditional performance evaluation based on the financial indexes and the immovable incentive modes can not adapt to the development of society and economy, the new modes of performance evaluation and incentive are in the ascendant. Since the economy of China is at the transition period from planning economy to market economy, the modern enterprise system has set up primarily. In such a pivotal period, how to select a proper managers' performance evaluation indicator and set up the incentive mechanism, so as to link up the incentive for managers with their performance, become a focus of government, market and enterprises. According to modern enterprises theory, there are multiple clientage and agency relationship in enterprises, among which the relationship between shareholders and the managers is the most typical. Because the shareholders and managers have different interests, and the information they held are asymmetry, the managers tend to sacrifice the shareholder's benefit in pursuit of their own benefit. Therefore, it is essential to set up an effective incentive mechanism that promote the managers strive on behalf of the shareholders, on the other hand, effective incentive mechanism lies on the scientific evaluation.With the development of the reform of state-owned companies, how to solve the managers' evaluation and incentive becomes the key point of reform. At present, the discussion of corporation government is strenuous, and the new incentive modes such as annual salary system and stock option are emerging. However, the basis of incentive mechanism—managers performance evaluation—is not isochronous; it still stays at financial and partial evaluation period. The incomplete performance evaluation depresses the incentive effect, and the incentive lacking of evaluation is more subjective. To combine the performance evaluation with incentive mechanism harmoniously has a significant function, which can assess manager's performance more appropriately, stimulate and restraint managers effectively, and reduce the conflicts between the managers and stockholders. Besides, the study can also help perfect the specific programs of reform. This thesis combines the practice with theory, reference with innovation. It begins with logical relationship of performance evaluation and incentive mechanism, then draws lessons from the other countries, analyzes the problems existing, discusses the incentive oriented manager performance evaluation that suit for China, make some suggestions finally.This thesis uses comparison measurement, combine quantitative analysis with qualitative analysis, and study mainly through theory research on the basis of the economics and management. It is divided by four parts:Chapter 1, summarize of the performance evaluation system and incentive mechanism. This part distinguish between the performance evaluation of managers and that of the enterprises, analyze the logical connection between managers' performance evaluation system and incentive mechanism, interpret the significance of research and the theoretical base.Chapter 2, performance evaluation of managers. This part summarizes the tendency from the evolution of western countries' performance evaluation, points out the favorable evaluation indexes need the balance between the sensitivity and precision, then illustrates the advantages and disadvantage of diversified indexes, gains some inspirations from two typical evaluation systems—Balanced Scorecard and Economic Value Added.Chapter 3, incentive mechanism. This part introduces three incentive modes: yearly salary system, stock option and stock hold system, obtains enlightenments from the western compe...