Reform Of Hotel Performance Evaluation Method In China

Performance evaluation is a core in the economy system. In today's information era, the internal and external surroundings of the hotel have undergone great changes. The traditional performance evaluation methods can not reflect hotels' actual performance and strategic competition capabilities in China because its main financial evaluation targets the internal aspect of the hotel and emphasizes on the strategic feedback. As a result, it is necessary to reform the traditional methods.In 1990's, based on the long-time and continuous evolvements, great transformation have taken place in the traditional evaluation methods in Western companies. They started not to use financial indicators alone. Besides, the performance evaluation and the strategic theories of the company are integrated and "Balanced Scorecard (BSC)" came into being. BSC was invented in 1992 by Prof. Robert.S.Kaplan of Harvard Business School and Mr. David Norton. BSC targets on the vision of the strategies of the company and it measures the future driving factors of the company. The targets and the measuring methods evaluate the company's performance from four perspectives: financial, customer, internal business process and learning & growth.In China, the evaluation methods of the hotel's performance are comparatively traditional and usually hotels use financial indicators as the major methods, neglecting the integration of business strategies and the driving factors for profit into the performance evaluation. A scientific and effective method has not been built so far in non-financial evaluation. Therefore, the introduction of BSC has become a necessity. BSC is an information-based strategic management method which integrates the strategic goals with the performance driving factors and has benefits to reform of the hotel performance evaluation methods in China.Though there are research results in foreign countries and practical experience for reference for the introduction of Balance Scorecard, it should be implemented by terms of the realities of the hotels closely in China. This paper studies systematically the limitations of thetraditional performance evaluation methods, Balance Scorecard's advantages and constructs the performance evaluation system based on Balance Scorecard in order to integrate financial indicators with non-financial indicators, attempts to offer effective procedure and method for comprehensive evaluation of the hotel performance in China.