Research On Establishing And Application Of Performance Assessment System

China’s SMEs (small and medium enterprises) have grown very fast since the reform andopening up three decades ago and became an indispensable part of China’s economy, makinggreat contribution to market economy. But with the change of home and abroad and thedevelopment of SMEs, they are facing many problems, especially the outdated humanresource management. Performance assessment is the core and basis of human resourcemanagement. So it is essential for SMEs to establish a scientific and rational performanceassessment system. This paper does some research on performance assessment system ofSMEs.Firstly, this paper analyzes current status and problems of performance assessment systemof SMES. On the basis of summarizing methods of setting up performance assessment system,this paper chooses principal component analysis (PCA).Secondly, on the basis of analyzing of weight value of performance assessment systemand combined to summarizing methods of weight value of performance assessment system,this paper chooses AHP. The final weight value gets from the average of results of PCA andAHP.Lastly, the empirical analysis of X Company is made, which is a practical support ofperformance assessment system. During empirical analysis, this paper finds the problem ofappraiser’s subjectivity. So, this paper discusses how to guarantee efficient assessment fromleaders, colleagues and the assessed person by game theory.The result of empirical analysis proves the method of establish performance assessmentsystem can be applied effectively to performance assessment system of SMEs, so it is aconstructive reference to performance assessment system.