Study On Performance Appraisal System Coupled With KPI And BSC Of Xx Bank

With the opening of financial industry and the deepening of financial reform,commercial banks, as the mainstay of the financial sector, are faced with complicateddomestic and international situation and also the increasingly fierce market competition.China’s commercial banks are currently in the process of transforming from traditionalperformance appraisal system regarding on financial indicators only to the newperformance appraisal system regarding on both financial indicators and non-financialindicators. It is very necessary for the commercial banks which are faced with financialreform to explore how to integrate key performance indicators of different dimensions forperformance appraisal and how to improve their competitiveness by improving theperformance appraisal system in order to achieve the strategic development.BSC (Balanced Scorecard) and KPI (Key Performance Indicators) are bothperformance appraisal tools. On the basis of reviewing commercial banks’ performanceappraisal and analyzing performance appraisal theory, this article coupled the BSC andKPI for better using in performance appraisal and then sets xx Bank as an example of casethrough elaborating the progress of introducing the performance appraisal system coupledwith KPI and BSC based on analyzing the problems of its existing performance appraisalsystem. The application progress includes:(1)formulate strategic goal of xxBank;(2)establish the BSC of xx Bank;(3)determine the key success factor;(4)select thekey performance indicators of xx Bank;(5)couple the KPI and BSC;(6)draw the strategicmap of xx Bank;(7)accomplish executing solution of performance appraisal.The introduction of the performance appraisal system coupled with KPI and BSC tocommercial banks can achieve strategy-centered system which can combine short and longterm goals to promote improvement in benefits and better implementation of commercialbanks’ strategy by evaluating key performance indicators among four dimensions---financing, clients, internal processes and learning and development. It can make up theproblem of separating among KPI indicators because BSC includes the drive chain forindicators which can be injected into KPI. It can achieve the combination of qualitative andquantitative and the combination of progress and results. It can streamline the number ofindicators of the BSC and reduce the complexity of the BSC through the strategicindicators selected by KPI. It can promote the implementation of the bank’s strategybecause KPI divides the strategic goals into specific tactical goals from top to down.Through the combination of theoretical study and case analysis, this article applies the performance appraisal system coupled with KPI and BSC in xx Bank and make efforts tofurther enrichment of the commercial bank performance evaluation theory and also provideeffective methods for the improvement of the performance appraisal system and thestrategic development of commercial banks through the analyzing practical application ofthe performance appraisal system under the coupling.