KPI Based Research On The Performance Appraisal System Of Y Shipbuilding Enterprise

The global economy has beeen in recession since theinternational financial crisis in2008.During which time, the market demandfor boats reduced violently, and most of theshipyardshaving been facing intensified problems such as financial difficulties, profit declineand so on.Shipyards worldwide are experiencing a harsh cold winter. The main products of mostChina’s shipyards are lowadded-value ships suchas bulk carriers, oil tankers and containerships. As labor, material and other costs rising, the profitability of shipbuilding industry inChina is further lowered, which makes most of the domestic shipyards on the threshold ofsurvival. This shuffle has made hundreds of China’s shipyards go bankruptcy.According toChina Shipbuilding Industry Association, in2012, the volume of shipbuilding completion,new shiporders and handling orders fell by21.4,43.6and28.7percent respectively Y-to-Y.Small and medium shipyards are either shutted down, changed business, or reduced employeenumbers, and for those shipyards on the verge of laying off staffs, are trying hard to find waysto turn the situation better and struggling to survive this severe crisis.Y shipyard benefited fromclear strategic vision and accurate product positioning, locating inthe high-tech, high value-added market segments, producesmarine engineering boats andspecial boats, though not severely affected by the cold winter, Y shipyard too is experiencinga brutal test. To better face the challengesof outside environment by improving the externalenvironment, is hence put on the agenda, ie. to reduce cost, control quality, increase efficiencyand profit by improvingperformance.As the key link of performance management and an important part of HRM system,serving for the strategic goals of a company or organization, supervising and guaranteeingtheachieving of goals, performance appraisal has always been a crucial and difficult part of HRmanagement. Shipbuilding industry is labor intensive, techno logy intensive, and capitalintensive.The process of shipbuilding has numerous nodes. The completion of shipbuilding isthe result of cooperation of different departments, all types of positions, numerous workerssticked together and works efficiently while the level of mobility of front-line workers is high.How to establish an efficient and effective performance appraisal system is a big challenge tothe whole shipbuilding industry.What makes worse is that relevant studieson this issue are few,and the whole industry is lacking of mature experience and best practices. In our investigationand interviews, we learned that the performance of Y shipyard is relatively low and theresultsof performance appraisalwereusually not the reflection of the actualperformance andthere is much inaccurateness and blindness in the selection of appraisal indicators.Here we took the performance management of Y shipyard as a case; explore theestablishment of performance appraisal system based on KPI, problems that exist in thesystem, and feasible ways to fix the problems. Hope this article would give reference totheestablishment and improvement of performance appraisal system of shipyards and othersbusiness and organizations.