Research Of Bank Of China’s Performance Evaluation System On The Basis Of The Strategy Positioning

Since 2003 China state-owned commercial banks has experienced the third round of reform, reformed to modern joint-stock commercial banks. Some important index like bank’s capital scale, revenues, profits and capital adequacy ratio has been excellent, even ranked among the advanced international Banks, especially for the biggest 4 China state-owned commercial banks. But we should also see clearly that China state-owned commercial banks have a lot of shortage and a lot of potential risks, from 2003 to 2011, their excellent performance is mainly due to the optimization of corporate governance structure and the Chinese economy’s 10 years rapid growth since 2001. But from 2012, domestic economic slowdown, especially in 2015, economic growth has been below 7%. For the steady growth, stimulate economic upward, the interest rate being into the decrease time, Chinese central bank has cut down interest rates many times since 2014, which leads to a sharp decline in bank interest income and profitability. Superimposed by the dual factors of excess capacity and low efficiency of enterprise management, the traditional industry risks appear. Bank’s non performing loans amount and ratio both increase, and now facing stable operating pressure. Internet finance booms and part of financial market is taken up by them, which has negative impact on the traditional banking. International economic situation is also serious, Europe and the United States economy is still weak. Europe is in a slow recovery from the financial crisis, but Europe could not completely solve the Greek debt crisis. U.S. economic data is positive but people also worry about some negative signal, such as decline of high-tech industry profitability and well-paid jobs. And the Fed has explicitly stated to raise U.S. interest rates in future, which will hit bulk commodity prices more badly. Emerging economies including China now face severe challenges and a lot of pressure like capital outflows and currency depreciation. The economic problems at home and abroad force China state-owned commercial banks to immediately launch a new round of reform, they should try to find their own core competitiveness at new time. Bank of communications has started a comprehensive reform, to explore the mixed ownership and mixed management. Bank of China should also speed up the pace of reform.The author in this paper focus on research and analysis of the performance evaluation system of Bank of China, argued that if the Bank of China’s current performance evaluation system upgrade to the second generation of the balanced scores card, i.e. the strategic map plus balanced scores card, it will be a scientific and reasonable and effective performance appraisal system for Bank of China. It can help the Bank of China to promptly find out its shortfall, to make up these deficiencies, so to repair its competitiveness rapidly. It also can make correct guidance to the development direction of the Bank of China, guide the Bank of China to insist on overseas business and overseas development, to integrate its sales channels, to accelerate the construction of information system and human capital, to build up its own O2 O integrated platform as soon as possible, ahead of the competition in the future, owning its advanced core competitiveness in O2 O. The author first reviews several kinds of commonly used performance appraisal system, and has carried on the analysis and comparison among them, then the author considers that the balanced scores card is a wise choice for Bank of China. At this stage the failure is mainly due to manager’s misunderstanding and the improper evaluation system design, rather than the assessment method. So it is recommended that the Bank of China to upgrade to the second generation of the balanced scores card. So the author firstly draw up the strategy map of the Bank of China, which is the foundation of the comprehensive evaluation system, on the basis of reasonable selection, choose many proper index to build up a new revised balanced scores card system, and finally apply it to the Bank of China’s assessment. The results accurately reflect Bank of china’s practical performance deficiencies, so the revised performance evaluation system is effective.