A Research on Business Performance Measurement Based on Economic Value-Added Comprehensive Score Card
|Keywords||Business performance measurement Economic Value-Added Balanced Score Card Economic Value-Added Comprehensive Score Card Analytic Hierarchy Process|
Enterprise Performance Evaluation refers to the overall evaluation of the overall business performance and operational efficiency. Peter F. Drucker, a management master , said that "If you do not evaluate, you will not be able to manage." Performance Evaluation of Enterprise Management can be seen in the important role and status. Different Performance evaluating methods will guide different behavior of managers and staff, which led to differences in the performance of enterprises.Traditional enterprise performance evaluation system is a method that analyzes the performance based on the financial data. It focuses on results of process, static, passive and single. It can not reflect the problems in business process, comprehensively and dynamically. Nor can the method to achieve organic integration with strategic objectives and strategic management means. Fundamentally speaking, the traditional performance evaluation methods will make owners’and operators’objectives inconsistent. As an agent, managers do not fix their operational objectives on maximizing the interests of owners, but to pursue their own interests, The two different goals resulted that the traditional performance evaluation method can not reflect the actual performance true and accurately. Because there are many disadvantages, theoretical and practical sides are increasingly committed to innovation of performance evaluation theory. A number of new performance indicators and evaluation methods come forth.Since the 1990s the 20th century, there were two innovations trends in the area of performance evaluation:  adopt new financial indicators used to overcome the limitations of traditional financial indicators;  non-financial indicators, closely connected with the enterprise’s strategic objectives, help form the core competitiveness of enterprises, are introduced into the performance evaluation system to assess the performance combined with the financial indicators. Economic Value Added (EVA) and the Balanced Score Card (BSC) as on behalf of theoretical innovation performance evaluations, representative of the most advanced practice of the enterprise performance measurement and evaluation; they are effective supplement to traditional performance system and have a major impact on modern enterprise management. But on their own, they also have limitations in the application. However, the two complement each other better, the paper put EVA into BSC and developed a new type of enterprise performance evaluation method--EVA comprehensive score card.Based on the comprehensive analysis of EVA and BSC, this paper put EVA into BSC, forms a performance evaluation system-EVA comprehensive score card. EVA comprehensive score card is the performance evaluation system’s rational choice to constantly adapt to the changing economic environment. It integrates the strengths of EVA and BSC, implements strategic management, take into account the interests of stakeholders, reveals how to ensure long-term financial performance and competitive advantage.The goal of enterprise is to maximize shareholder wealth. In the end, the core of the enterprise performance evaluation system is EVA. BSC did not practice because of failing to measure among different indicators. BSC with EVA as its orientation provide a simple and practical method. EVA comprehensive score card will put EVA as the key indicator of BSC financial level, at the top of its overall scorecard, the final link in the causal chain of BSC. Enterprise development strategies and operational advantages are designed to achieve the overall objective of EVA growth. Several other areas of improvement must be reflected in the financial indicators, finance is the starting point of several other attribution, financial improvement can be achieved only when other aspects of performance achieve a certain balance.In EVA comprehensive score card, determining the relative weight of indicators is the problem, also a core issue to use EVA comprehensive score card. Because there are many qualitative indicators in the evaluation system, So the distribution of weight is inevitable with many subjective elements. Therefore, this article will apply Analytic Hierarchy Process (AHP) to the EVA comprehensive score card. By establishing comprehensive scorecard model, judging matrices and effective combination of qualitative and quantitative indicators, a good solution to determine the weight is found. Through the weight of dimensions, we can see what the focus is at this stage. It will also guide the operation and management of enterprises.Finally, through a example, a household appliance manufacturers, this article show the enterprise performance evaluation process using EVA comprehensive score card. Through EVA comprehensive score card, the company can combine its day-to-day operations, performance evaluation and overall strategic objectives, so that the managers were freed from the day-to-day management. And avoid the conflict of short-term and long-term strategic objectives. Essentially, the goal of AHP-based EVA comprehensive score card is creating value. The ultimate goal is maximizing value of the company; it is used to determine corporate strategies and to establish short-term objectives decomposition, inspire and guide staff to fulfill strategies, organizing, controlling, evaluation, it can successfully link the company’s strategic goals and day-to-day management decisions.