An Improvement Of SY Downhole Operation Company’s Performance Appraisal System Based On The Balanced Scorecard

Our country is a big oil producer and consumer. In order to seek better development in the new historical period, China’s oil companies must strengthen internal management and do good strategic planning. The performance appraisal is a key means of inspiring people and managing enterprises. But in China’s oil companies, the performance assessment indicators are generally designed to be simple, and they emphasis on financial indicators or short-term benefits so much to pay attention on the corporate strategy and long-term development. So our oil companies need to establish a comprehensive, strategy-oriented performance appraisal system. In addition, in order to walk on the road of sustainable and civilized development, Oil industry has launched a QHSE management system. Every oil company urgently needs to apply this system to their performance appraisal for better internal controls. So how to build a performance appraisal system which is suitable for oil companies, can be combined with the QHSE management system and help to realize the strategic development, is the most important.This paper takes an example of SY Downhole Operation Company, and find out some problems by investing and analyzing its current performance appraisal system that the assessment system is too complicated; they lack horizontal communications; index design is fragmented; people overemphasis on financial indicators; and the stuff are passively assessed, lacking a sense of mission. The main cause of these problems is the company ignored the coordinating and guiding role of strategy. There is a lack of indoctrination or communication about strategy between the upper and lower levels, or among the organizational units.As we all know, since the 1990s, the birth of the Balanced Scorecard, it has been regarded as an effective tool for enterprise performance evaluation and strategic management, which is a link between corporate strategy and performance appraisal. And this paper takes the view that causal logic among the dimensions of the Balanced Scorecard is very similar to the inherent logic among the elements of the QHSE management system, which provides the possibility for their combination. And the combination of the Balanced Scorecard and the QHSE management system can further promote the improvement of them both. So this paper puts forward establishing a new performance appraisal system which adapts to the development features of oil companies and is combined with the QHSE management system, in order to solve the problems in the existing system to a large extent. This paper hopes to provide some ideas about how to use the Balanced Scorecard and the QHSE management system into the performance appraisal of our oil companies.Firstly, by querying, reading and analysis extensive literature, this paper finds out that the enterprise should implement performance appraisal based on corporate strategy. And it is the Balanced Scorecard that links them both. On this basis, through investing and analyzing the current performance appraisal system of SY Downhole Operation Company, this paper points out the problems and disadvantages. With reference to the conditions and benefits of the Balanced Scorecard as a performance assessment tool, and the feasibility of the integration between the Balanced Scorecard and the QHSE management system, this paper also shows the necessity and advantages about this company using the Balanced Scorecard to implement performance appraisal. Besides, the company should design the BSC appraisal system according to its own strategy and business features. So on the bases of analyzing the corporate strategy, this paper respectively designs BSC performance evaluation indexes at the company level, unit level and staff level. Then it uses an evaluation approach which combines quantitative and qualitative, as the tool of implanting this assessment system. That is Fuzzy Comprehensive Evaluation Method.