The Study Of Value Added And Salary Incentive Mechanism Based On EVA

Metrics based on the value creation is very necessary, because the purpose of existence of company is to create value. The traditional financial measures of taking the profit as the core have some limitations, it is difficult to meet the needs of the value management. We should find a system, to be able to measure the value of the company created and be able to incentive mangers based on the system. This system make the manager's behavior in line with the will of the shareholders. It is the Economic Value Added (EVA).The paper resolves how to measure the value created problems under the guidance of value management and how to design salary incentive to meet the demand of various performance appraisal.In this paper, we are guided by value management, set the mostly keys by EVA and theoretical analysis and virtue of case analysis combined, emphasize particularly on the research of the components of EVA and study on the incentive system. The first part introduced the purpose of the study, the significance, related theoretical research at home and abroad and thesis writing ideas.The second part puts forward the EVA theory based on the EVA measure and introducing in the relevant concepts and theories. After the discussion of the EVA theory foundation and the core thought, then proposes the quantification relations between EVA and enterprise value's, and further points out that EVA is coordinated with the value management concept. Finally has carried on the thorough to each components of EVA, this part is the focus of the study and its calculation process is analyzed by the case. The study purpose of this part is to analyze EVA deeper content, and strengthen the practical application of EVA. The third part is EVA's salary incentive mechanism. First introduces in the principal-agent theory under the modern company management structure, under the thought of making the cost of management to the minimum, reviews and analyzes of the EVA salary incentive mechanism proposed by the predecessors, then makes a conclusion that the EVA salary incentive is superior to traditional forms of incentive, thereby proposed the EVA salary incentive way from the new the angle of view,this enhances and improves the content of EVA salary incentive.The article finally proposes the limitation of applying EVA in carrying on the value management and has discussed the suggestion that the listed company should apply EVA under the current situation in China.