The Study To The Application Of EVA And The Balanced Scorecard In The Enterprise Performance Evaluation

The background for this paper is the development of performance evaluation system, this article combines with two cases which implement EVA and BSC successfully in China's enterprises to expound, which lays the practical basis for the subsequent analysis and comparison, it elicits the difference between the EVA and the BSC and their respective advantages and disadvantages, as well as the right type of the enterprises in the practical application. And it provides thoughts and recommendations related to some of my thoughts and recommendations that deserve due attention, aiming at recommendations related to recommendations related to the process of the practical problems.This paper consists of five chapters.a simple account will be made in the following:Chapter 1 introduces the background and purpose of this paper, and describes the study of domestic at the present situation, points the thinking of writing paper, summed up the papers innovations. "no measures, no management" Business organizations have been committed to finding ways to assess the enterprise. EVA and the BSC as an advanced performance evaluation tool has been widely used abroad, our theoretical circles and practice circles about EVA and the BSC in Enterprise Performance Evaluation of the research and application in the ascendant. This stage, most of the articles in the country are part of the introductory and lessons learned of the article, the content of systematic and technical is lack, therefore, how to integrate theory with practice in research also requires further in-depth. This article puts EVA and BSC into the overall framework of the theory and practice enterprise performance evaluation,by theoretical explorations and case studies in close connection with ideas and method, this chapter belong to the initial stage of research, it introduces the Research, points out why this project to conduct research, and it lays the foundation for later discussion.Chapter 2 describes the theoretical overview of EVA and the BSC, in order to lay the theoretical foundation for future argument, first it introduced the EVA as well as the emergence and development of the application of the status in China, and it points out that the traditional performance evaluation indicators for the management makes too much emphasis on profits, to make the pursuit of short-term benefits while ignoring long-term interests of enterprises. EVA is not only considered the cost of debt but also the cost of equity from the business net operating profit after tax deducted, This is its superior to the traditional performance evaluation indicators to accounting profit as the basis for evaluation of important aspects. Second, the proposed introduction of the BSC, as well as the application of the status in China, companies are finding a variety of performance evaluation indicators for evaluation which are mostly financial in nature, after a long-term continuous evolution in the 20th century, the West Enterprise Performance Evaluation system was broke through the simple using of financial indicators to evaluate performance of the practice, there has been BSC, from four dimensions to examine the performance of enterprises, including the financial dimension, the customer dimension, the dimension of internal processes, learning and growth dimension; Lastly, EVA and the BSC are still have the inevitable flaws and shortcomings in practice, it can make the EVA as the core, and the BSC in the other dimensions combine to constitute a new type of indicators-Balanced Scorecard. It combines the strengths of EVA and the BSC.In the Chapter 3, it has done a comparison and analysis between the EVA and the BSC, the difference between EVA and the BSC is mainly reflected as follows:first, the two kinds of performance evaluation system starting from different angles. EVA system, concerned about the BSC is based on customer value, shareholder value-oriented; second, two kinds of performance evaluation system's main application object are different; Third, the two kinds of performance appraisal system on the company's strategic implications are different; secondly, EVA has advantages and disadvantages at the same time, EVA of economic value added has the advantage, there are also economic value in the weaknesses in the application of the disadvantages; again, it expounded BSC's strengths and weaknesses, for BSC,there are some advantages such as full range of evaluation index, a long-term, global-oriented, mass-oriented, timely and objective-oriented and so on, but it is not developed a good system of coordination among the many indicators and trade-off already,it would be a hard work; Finally, it introduces the EVA and the BSC's application of object, EVA performance evaluation of an object is usually regarded as a separate project, while the BSC evaluation system is based on departmental performance evaluation functions of the system, it will finance the conduct of the indicators and non-financial indicators of organic integration, and it can cover all business sectors, as it is more comprehensive.Chapter 4 mainly studied the use of performance evaluation of the EVA and the BSC in China's enterprises, including the case of TCL Group, the use of EVA and BSC in Dalian Golden Pebble Beach Tourism Group Co., Ltd. TCL Group's EVA incentive is to target the introduction of EVA into the original KPI evaluation system, according to the Group subsidiaries, or business unit EVA annual results and the achievement of KPI targets to detennine the subsidiary or business unit manager's incentive compensation assessment approach. This Paper introduces the TCL Group's EVA incentive system for content. separately from TCL Group, the composition of EVA targets, EVA and the combination of the original KPI evaluation system. in 2005,Dalian Golden Pebble Beach Tourism Group Co., Ltd. proposed a " Application of the Balanced Scorecard for Performance Evaluation ", and it started in 2006 in Branch company. the practice shows that the BSC approach to performance evaluation and achieved good results. This two business performance evaluation system for the selection are a large number of demonstration and research through the draw, and they all pay attention to the company's practical and strategic departure, tailored. Therefore, different companies should have different options and combinations in order to give full play to EVA, BSC and the Balanced Scorecard performance appraisal system in China's enterprises.Chapter 5 discusses that the practical application of EVA and the BSC should pay attention to three issues, first it proposed the implementation of EVA and the BSC's guiding ideology is pragmatic rather than the map lively, it is not replication methods, where applicable under the premise of seeking a reasonable and decision-making as a reference that incentive-based, Secondly, the BSC should be noted in those problems in practical application:1.To adapt to the characteristics of the enterprises themselves,2. To adjust timely the performance evaluation index system,3. To focus on Enterprise Information System, finally, it put forward the full implementation of the EVA Balanced Scorecard's recommendations, including the use of "EVA Balanced Scorecard", it require better internal environment by improving the implementation of the EVA Balanced Scorecard, in order to help enterprises to establish an effective incentive mechanism, and it can promote the development of enterprises.