The Person In Charge Of The Central Enterprises Performance Evaluation System

Proposed by the U.S. Stern & Stewart Company, Economic Value Added (called EVA for short) is a performance evaluation system. The system, covering total capital costs including the equity capital of enterprises as a deductible item into it, emphasizes the pursuit of value creation as a goal and unifies the interest between business owners and operators. EVA can make up for the shortcomings of traditional performance and reflects the real business performance.To assess the central enterprises, the S AS AC, on behalf of the state, exercises the role of state capital investors. In the year of 2010, SASAC issued a new "Interim measures for the assessment of management performance of Heads of Central enterprises" to fully implement EVA evaluation on the heads of central enterprises in their third terms (2010-2012). In place of the assessment indicators "ROE", EVA in the new "procedures" together with "gross profit" investors become two most important basic indicators in the evaluation system, which account for 70% of the weight. All of this means that throughout first and second term the central enterprises began to Value Based Management (VBM) into the third assessment period.As the EVA performance evaluation system gradually build, whether the system can play a baton role successfully and guide the operation management reasonably assumes more and more attention. Also, more and more people attach great importance to the bias and negative impact the system may incur when central enterprises creating value.Starts from the basic theories of VBM and EVA, this article inquires into VBM's feature and advantage and EVA performance evaluation system. Second, it illustrates the usability of the EVA performance evaluation system implemented in central enterprises and interprets the assessment methods. Then, the article appraises the adjustment to the system SASAC made in accordance with reality. Finally, this article reveals some problem of the system and gives some advices according to the actual situation.