Construction Of A Performance Evaluation System Based On The Combination Of EVA And BSC

Performance evaluations concern the value generated by an enterprise and the fulfillment of an enterprise's responsibilities,and are therefore incredibly important in guiding an enterprises strategies to meet future goals.The system of scientifically effective evaluations must not only reflect macroeconomic circumstances of the time and promote increased generated value for a given enterprise,but also assist in fulfilling its social responsibilities.The current challenges of China's economy are twofold.First,China's initially rapid and now waning economic growth has caused traditional industries such as steel to be faced with a serious surplus.Second,these industries are experiencing unprecedented pressure as concerns about the environment grow now that the public is paying more and more attention to pollution.This phenomenon has yielded a competition between the environment and industry,compelling companies to transform methods of operation and development,change the make up of their products and find new ways to increase profits.However,currently the majority of enterprises employ performance evaluation systems that overstress financial quotas,making it easy to ignore key driving factors of an enterprise's ability to create value.Such an oversight under modern day circumstances is severely disadvantageous to an enterprise's progress.Therefore,it is of utmost importance to formulate a system of performance evaluations that are relevant Steel Company."Economic Value Added "(EVA)and "Balanced Scorecard"(BSC)are two current systems that have been widely accepted by majority of mathematics scholars as viable methods of performance evaluation.However,while EVA and BSC represent a significant improvement from former evaluation methods,there still remain some important inadequacies.EVA focuses on representing an enterprise's real value,but it overlooks investment in scientific research,personnel training,and other such factors that contribute to an enterprise's long-term competitive strength.In this area,EVA provides a relatively narrow perspective.Although BSC provides a four-dimensional system of evaluation,the financial dimension of the evaluation is part of an older financial index,which fails to accurately reflect an enterprise's value in the modern day.However,by combining the two systems the financial indicators of EVA could provide enterprises relevant components that are missing in the BSC and sufficiently yield a new progressive system of performance evaluation.Considering the aforementioned ideas,this paper will present a comprehensive system of performance evaluations by synthesizing the characteristics of EVA and BSC.Specifically,the paper will explore this perspective through the example of "X Steel Company," looking at the current state of the steel industry and real issues facing the development of modern enterprises,for example,the challenge of a critical surplus in low to mid-range quality steel production,the reliance on imports in high quality steel production,pressure with regard to environmental protection,etc.Through these cases the following discussion will offer a set of comprehensive and multifaceted performance evaluation systems in order to help steel enterprises change the composition of their products and implement environmental protection measures all in coordination with promoting practical,balanced and complete sustainable development.