Performance Evaluation. Operators

In recent years, the evaluation of executives' performance has become a hot topic among scholars, consultant firms and businesses home and abroad. In today's knowledge economy, businesses are faced with heavier pressure from competition. More and more businesses have realized that to survive in the fierce competition, it is imperative to improve the managerial level. As a result, the role of the executives is becoming increasingly important and the evaluation of executives' performance has become a topic of wide attention.The owners (shareholders) and the executives of a business are principals and agents. Therefore, there are so called "agency problems" between them, such as "different objectives and interests", "disproportional control of information', and "disproportional responsibilities and risks". For the owners and the executives, to solve the "agency problems", it is necessary to evaluate the executives' performance.Only by establishing a good evaluation system of the executives' performance and conducting objective evaluation, can a sound operation platform be provided for the incentives mechanism and the disciplinary mechanism for the executives. Therefore, the managerial level will be enhanced and the company will gain a competitive edge.At present, the market economy system in China has just started and it is not mature. There is not a fully-developed market for professional managers (the executives of the businesses) yet, especially in many state-owned enterprises, the present is also the CEO. There is no effective governance institution of the legal person and this is not good for the development of the SOEs. Therefore, studying the evaluation of the executives' performance helps to foster a market for professionalmanagers and to improve the governance institution in the SOEs. It is practically significantApparently, the study of the evaluation of executives' performance is significant both theoretically and practically. This thesis has covered some preliminary discussions on the topic, so that people can have a better understanding of it and it can play its due role.This thesis is composed of three parts:L Introduction of the concept and the significance of the evaluation of executives' performance. In this part, the concept is given first. Then the comparison between the evaluation of the executives' performance and the evaluation of the businesses' performance is provided. At last, the thesis analyzed why it is necessary and practically significant to evaluate the executives' performance.n. Establishing the evaluation system of the executives' performance. In the beginning of this part, there are principles of setting up the system, including common and detailed principles; next, after analyzing that the traditional evaluation system is limited, problems that attention should be paid to during setting up the system are pointed out; besides, the EVA indices are analyzed in details and what can be learned from EVA indices in setting up the evaluation system is also illustrated.III. Problems and solutions in the evaluation of executives' performance in SOEs. In this part, based on the problems identified in the SOEs, the detailed principles for setting up the evaluation indices are given and the solutions to improve the evaluation system of SOEs are provided.