Research On HR Group Budget Management Based On Economic Value Added

Since 2010,the budget management based on economic value added was introduced to China's state-owned enterprises,but has not been widely applied.The successful cases of application are rare.In order to solve the unscientific budget management of HR group,to improve its ability on value creation,it is necessary to design the budget management based on economic value which emphasize on cost,rate of return on investment.The paper is to analyze the internal and external environment of current enterprises by using literature review and case study.Through the study of the current budget management model of HR Group,it finds that it did not set the value added as its basic goal when it was making the budget goal which leads to the high cost on the game between the management level and the budgeting department and the unscientific distribution of the resource.It also causes the unreasonable incentive plan in the budgeting evaluation process.All those questions become a vicious circle,it will affect the long-lasting strategic goal of the enterprise.Therefore,it is necessary to improve the traditional budget management which is to introduce the budget management based on economic value added to the enterprises.It can solve HR group's problem and make the budget management more scientific.In order to design the system,it should adhere to several principals: firstly,insisting on value-oriented principle which is the main difference from the traditional comprehensive budget management.Secondly,using incentive principle to build an incentive system based on the index of economic value added and to unify the goal of the agent and the principal.Finally,the principle of timing is to adjust the budget according to the enterprises real situation in time.In the process of budgeting,according to the actual data of HR Group,the reference value of the economic value added is firstly calculated.Since the economic value added reflects the increase and decrease of the enterprise value,it is reasonable to use the reference value to assess each budget unit.After the use of new budgeting in the HR Group,it will find the difficult point during the application of economic value added budget management according to the execution of the budget.In order to ensure the comprehensive budget management based on economic value added is successfully applied to the HR Group,it should consider from the aspect of enterprise and its employees.It will analyze the implementation of economic value added strategic goal and the security of creating cultural environment.It aims to build a comprehensive budget management based on economic value added for HR Group and expects to provide new insights and methods for others to study.