Research On The Balance Scorecard Performance Evaluation System

With the deepening of railway reforms, especially since the reform of the Ministry of Railways, China Railway maintained a rapid speed of growth. The rapidly developed railway has played a critical role in alleviating the inconvenience of travelling and stimulating the growth of regional economy. As one of the key functions for railway operations, Railway Track Maintenance Division manages the maintenance and repair of railway tracks, bridges and tunnels, thus assumes critical safety responsibilities. However, similar to majority of the railway companies, Railway Engineering segment currently uses a comparatively backward performance evaluation system. Performance management is an essential prerequisite for enterprise management. Without a fair and reasonable performance evaluation system, employees will be demodulated and business vitality will be weakened, both will result a low financial return and a serious impediment of the healthy development of the Railway Track Maintenance Division. As an advanced tool for strategy execution, performance measurement and communication, Balanced Scorecard has been widely applied worldwide and has achieved significant results in various fields. This article aims to use Balanced Scorecard as the basis then to establish the performance evaluation system for the Railway Track Maintenance Division.This article starts from a brief introduction of performance management system, Balanced Scorecard method and its application in state-owned enterprises. Then it focuses on the basic theory of the Balanced Scorecard, the theoretic development process, advantages of this method and potential ideas of application. Using X segment as an example, this article covers a high-level description of Railway Engineering segment and its current performance evaluation system, followed by an in-depth analysis of the gaps between current performance evaluation process and an ideal effective appraisal system. The article then discusses the feasibility of implementing Balanced Scorecard approach in Track Maintenance Division through following three aspects: strategic direction, effective communication feedback mechanisms and well-around recognition among all employees. Supported with examples and based on the implementation of the Balanced Scorecard approach in Finance department, this article introduces a five-dimension Balanced Scorecard system including classification Balanced Scorecard, Financial Balanced Scorecard and the overall Balanced Scorecard. Finally, this article analyzes the policy recommendations of balanced performance evaluation approach and points out the direction for further research.In alignment with the mission and vision of the Track Maintenance Division, Balanced Scorecard Performance Evaluation method takes consideration of employees’ perspectives and effectively converts the overall business objectives to measurable and actionable goals of each department. With the scientific and fair evaluation results, Balanced Scorecard Performance Evaluation method comprehensively reflects all aspects of business performances and visualize business advantages and disadvantages. Its conclusions provides a useful guidance for business to make future decisions on business operations. Balanced Scorecard approach can be easily adjusted based on business priorities and implementation results. The implementation and utilization of Balanced Scorecard Performance Evaluation method will guide all employees to work cohesively in order to achieve common business goals, and therefore will promote long-term development of railway enterprises.