Analysis Of The Performance Management Of Commercial Banks In China

In conformity to the commitments of Chinese government when joining WTO China's banking industry started to open up to all foreign-invested banks from December 11th,2006. As China's banking reform to advance in depth, the Government's supervise system on financial industry is getting increasingly stringent and scientific. At the same time, along with the amalgamation of Chinese financial markets and international financial markets, competition among banks has become more intense; and Chinese commercial banks will have to face challenges from foreign competitions. Under the situations of facing increasingly fierce horizontal competitions, having problems both from inside and outside, it is of real significance for Chinese banks to explore and develop a set of scientific, rational and effective performance appraisal system which suits the new market structure and Government's supervise system. The reason behind is that performance management is an important link in commercial banks'operation and management, and that the traditional performance management methods cannot meet the requirements in the new environment of fierce competitions. Therefore, commercial banks need to introduce new performance management tools in order to establish performance management systems which can help achieve long-term strategic goals.This paper starts with the current status of China's banking industry and performance management methods in both Eastern and Western commercial banks to discuss the significance of performance appraisal and performance management frameworks. Then the influencing factors and existing problems of operation performance management in Chinese commercial banks are examined. And combining with China's actual situation, according to the principle of "Based on reality and focusing in the future" this paper presents the discussion, analysis and appraisal of commercial banks'operating performance with respect to customer relations, in an attempt to guide China's banking industry to seize the opportunity of development. From the analysis, we hope this paper can help Chinese commercial banks stand in better positions in international competitions in the banking industry.