The Use Of BSC In Performance Management Of China Commercial Banks

Recently years, in response to fierce competition, China’s commercial banks continue to strive to improve business model, enhance risk control, which build a comprehensive and scientific performance management system is an effective way. Strategic Performance Management System based on BSC is a mainstream trend. The paper aggregate and sort out the previous studies, based on the case studies of N branch of China Everbright Bank to implement the BSC performance management and propose corresponding safeguards.Paper is divided into six parts, each part of the main contents are summarized as follows:The first part is the introduction. The paper first introduces the research background and research purposes, China commercial banks face from the external environment and internal requirements, the lock structure of this research, content and methods, but also of innovation and the expected lack of a paper. The paper argues that China commercial banks in the process of introducing the Balanced Scorecard performance management, can effectively deal with the threat of external competition, but also can solve the bank’s internal management and administration. The paper purpose is how to play the maximum effectiveness of BSC.The second part is theoretical analysis. Performance management comes from the performance evaluations, a series of employee-centered interventions, in order to take advantage of the potential of every employee to improve organizational performance. Performance management is composed of a series of activities by the closed loop system, according to chronological order of work can be divided into performance plans, performance implementation, performance evaluation and performance feedback on the four links.BSC created by Kaplan and Norton is a strategic management tool. The basic principles of BSC is based on organizational strategy, considering the financial factors and non-financial factors on organizational performance, performance evaluation will be divided into financial, customer, internal processes, and the four dimensions of learning and innovation.The third part is the basis of strategic performance management system construction. Including the necessity analyze, provided implementation steps, and strategic performance management indicator system.Based on the needs of management, financial management, internal process innovation and continuous learning and innovation and many others, the urgent need is building strategic performance management system. On the one hand, it can enhance the core competition of commercial bank. On the other hand, it can meet the needs of commercial banks management and optimize their internal processes.The fourth part is a case study. The part of the N branch of China Everbright Bank first introduced the background information, and to analyze its strategic goals, then introduced the case difficulties and to analyze its causes.N Branch of China Everbright Bank was established 1999, in 2006 the introduction of the Balanced Scorecard for performance management and made outstanding achievements. However, because of foreign ideas which is generated by BSC itself and characteristics of BSC, there are lots of difficult during the implementation process of BSC at China Everbright Bank N-Branch, despite great success had achieved, but also encountered in the implementation process, a series of problems. To solve these problems, it should be from the strategy development, employee communication and feedback in a bid to develop a series of security measures to ensure that the Balanced Scorecard based performance management system has been effectively implemented.The fifth part is the security measures. This part discussion safeguards of the implementation of BSC from three parts. First, based on strategic goals, strengthen the Balanced Scorecard concept philosophy. In the organization, carry out various forms of publicity about the knowledge of BSC, such as lectures, tutorial classes, and internal self-service online learning, continuous learning. Second, commercial bank should establish an effective communication and feedback system. On the one hand, the system can make the process of BSC more preciseness. On the other hand, dynamic feedback system can find and solve problems. Third, improve employee participation. The implementation of the BSC process should establish an communication system between managers and employees to ensure smooth communication. Through communication and employees to recognize their lack of appropriate, targeted to self-improvement, improve efficiency, implement.Part VI is the thesis conclusions. This section summarizes the significance of paper and conclusions, pointing out that the strategic balanced scorecard based performance management system is the performance of commercial banks the only way for management reform, commercial banks should be fully advanced foreign thinking and successful experience.The contribution of this paper has three aspects:first, theoretical research, the paper expounds the theory of performance management and research reviewed about BSC, and built for commercial banks in China based on the strategic balanced scorecard. The implementation of performance management procedures, performance management for the Commercial Bank of China has laid a good foundation. The second is the research perspective, this paper through the case of branches of China Everbright Bank introduction, analyzed the difficulties and the implementation of security measures, from a strategic analysis created the KPI of BSC. The third contribution is about the index system. Based on the competitive environment of commercial banks at home and abroad to analyze and judge, to determine the development of China’s commercial banks, strategic direction, and constructed a relatively comprehensive system of performance management indicators.The deficiency of paper is that there is no specific sector for commercial banks, effective balanced scorecard of the implementation process. Because of limited ability and other reasons, this article just only base on the China Everbright Bank N branches, from the four dimensions of BSC constructed performance management system.