Study On Performance Appraisal Of Leadership Team Of State-owned Enterprises

The performance appraisal of leadership team is one of the most important task in state‐owned enterprises governance. Performance appraisal is the oriented of business activities, which shapes the behaviors of the stated‐owner enterprises, and then determines the firms value in a long term.In Guangxi, there are, universally, several defects in performance appraisal of leadership team of state‐owned enterprises yet. First, performance appraisal focus on stock variables, not on overall evaluation on the capability of value creation and capital utilizing efficiently; second, evaluation system can only deal with the team work, not the individual performance, the effort of team member and it’s effect can’t beidentified; third, the interval of performance appraisal doesn’t match the term of office of leadership team, the valuation result is not related to the appointment of the leadership member, that weakens the role of performance appraisal as a business policy; forth, the board, managers and party committee team are evaluated as a whole team, that doesn’t follow the law of corporate governance; finally, the performance appraisal system lack of the long term Mechanism, which is not good for balance of short term and the long term interest, and the strategic planning.In order to solve the problems above, this paper, bases on Guangxi LiugongGroup Co., Ltd, studies the issue of performance appraisal of leadership member ofState-owned enterprises systematically.The assessment system of leaderships designed to improve the firm value andcompetence, based on the analysis of the characteristics and competition ofEngineering Machinery industry, as well as to aligning the strategic planning ofGuangxi Liugong Co., Ltd. The author applies Balanced Scorecard (BSC) to developthe comprehensive performance indicators, which comprise of financial indicators,internal business process indicators, customer indication, and learning and innovationindicators, with the expectation of modeling the value of firms. According toneo-economics, financial indicators are comprised of profitability, growth, and riskindicators. The author also applies the consistency test to decide how many indicatorsare needed to indentify the individual performance of leadership team, and thendevelop25indicators finally.The author stratifies the weighting of performance indicators based on thecompetition state and the competence of the Engineering Machinery industry.Financial indicators are the direct index of the result of the business, although theresearch applies the BSC model, the financial indicators are the principal in theindicators system and weight more than1/2. Because the Engineering Machineryindustry has great potential and it is still scattered in China, so the growth indicatorsweight most in the financial indicators.In order to translate the performance of firm into individual performance of theleadership team of the firm, and then we can evaluate the performance of theleadership team member individually, the author impose the value chain as aMediator between performance indicators and individual contribution of leadershipteam member. The author deems that, there is the logic relationship between thevalue chain and performance indicators, so we can deduce the relationship betweenfirm performance and leadership team, bridged by the role of leadership teammembers in value chain, and then translate the firm’s performance into individual evaluation.This paper gives a comprehensive solution for the performance appraisal ofleadership team of State-owned enterprises, which can be use as reference for otherrelated issue. But this research is stayed theoretical, and need more practice to refineand improve.