Application Study Of Bring EVA Into Central Level Evaluation System

To regulate the central enterprise aimless capital expansion and hostile takeovers,SASAC(State-owned Assets Supervision and Administration Commission) bring EVA into theperformance appraisal system of central enterprises’ head in the year2010. How to establish amatching value management system is a demanding issue both in practical and theory for centralenterprises.This dissertation first inspects the evolution of domestic enterprises’ Performance AppraisalSystem. Through the comparison of the assessment indictors of different period, there should be aindicator which can better reflect performance increase and value creation according to its meritsand defects. And then, the theory, source, computation and merit and demerit is discussed. It pointsout that real business performance can be reflected, the state-owned assets the contributor’s dutiescan be performed and state owned assets can rise through implementing EVA system in centralenterprises. And then it further studied the merits and limits or adoptin EVA in central enterprises.The effect of assessment is also analyzed. Finally some proposal are given aimed at solve someproblems in the application of EVA in our country.From the comparison, in order to establish a assessment system with EVA as kernel indicator,domestic central enterprises should begin from the following aspects: First, take EVA Mindset as aguide, strengthening the study of EVA, value management and Full Participation. Let the ideal ofEVA take root in people’s mind. Second, the financial management objectives should be themaximum of EVA. Third, the fundamental methods should be management systems. Taking EVAas assessment indicator means EVA is the leader. Where the leader go, the central enterprisesshould follow. The basic assessment methods should use the value management, includingInvestment financing decision, budget strategy plan, etc. Forth, the performance assessment is aguide to action. In later practices, the design and selection of assessment indicators should beperfected gradually and consistently to reflect the real business performance. Fifth, the EVAincentive system should be used as Strategic assurance. Any design and selection of managementobjective should be guaranteed by incentive system. Bank of bonus should be established, mid-termand long-term incentive should be implemented. The head’s appointment, transfer and salary isoptimize.Of cause, a very long path is ahead of us. This dissertation takes EVA as the kernel, usesvalue idea as leader, take performance assessment as objective, take management system as basic methods and the incentive system as strategy assurance. This4M system is used to improve andpractice of performance appraisal system.