Discussion on theoretical methods of performance appraisal

1. Theoretical basis of performance appraisal

There are two main theoretical basis of performance appraisal: one is fair choice theory; the other is principal-agent theory.

Public *** Choice Theory was proposed by Buchanan in the book "Public *** Choice Theory". It has also become the theoretical basis of contemporary public finance. The essential connotation of the Western public finance model is to establish a public selection mechanism, form the public will through the public selection mechanism, and then let the government act as an agent to implement this public will. The government's fiscal behavior must reflect the requirements of the public will and public interests. Under this concept, the government must try to find ways to improve the effectiveness of public funds and performance that are consistent with the public's choice of goals. Assessment is one of the methods. Through performance evaluation, the public can obtain or understand its benefits, and it can also provide the government with a basis for decision-making and gain public support.

Principal-agent theory is a research focus in new institutional economics. Principal-agent theory is based on information asymmetry and non-consistency of interest goals. Involves three important elements: moral hazard, adverse selection, and agency costs. The use of public funds involves a dual principal-agent relationship. One is the principal-agent relationship between the public fund managers and the units that use the funds; the other is the principal-agent relationship between the public and the public fund managers. That is, the public acts as the principal, and the financial department acts as the agent, allocates funds, and accounts to the people; the finance department acts as the principal, and the user unit acts as the agent to use the funds, and the agent needs to account to the financial department in order to explain it to the people. explain. In our country, the people's representative is the People's Congress.

2. The purpose of performance evaluation

1. To provide the benefits of government public investment and fund use benefits, and to better utilize various resources

One of the main initial motivations for Western countries to carry out public expenditure performance evaluation work is to solve the problem of serious waste of funds and uneven distribution of funds in public expenditure activities, so that various public expenditure departments and companies can *Establish a more effective expenditure decision-making mechanism and expenditure prioritization mechanism in project expenditures. The performance evaluation of the departments under the China Geological Survey, which is a public expenditure, must also reflect the economic principle of saving expenditures.

2. Improve organizational management capabilities and the efficiency of public investment

Efficiency is reflected in the project decision-making mechanism, project Comparison of implementation progress, concrete reflection of project economic and social benefits, etc. The performance evaluation of the departments under the Geological Survey, which is a public expenditure, must also reflect the efficiency principle of obtaining expected output savings with minimum investment.

3. Ensure the appropriateness of public expenditures to meet the needs of social and economic development goals

Appropriateness refers to whether the establishment of public expenditure projects, plans, and projects meet the needs of social and economic development goals. Whether the country's overall economic and social development goals are in line with the wishes of the general public has a certain degree of urgency. As a public expenditure, the performance evaluation of the departments under the China Geological Survey must also reflect the principle of appropriateness that is in line with the overall goals of the country's economic and social development and the will of the general public.

3. Principles for selecting performance evaluation indicators

1. Economic principle

The selection of performance evaluation indicators should consider realistic conditions and operability, and the quality of data Obtaining should be in line with the principle of cost-effectiveness, and evaluation should be carried out on the basis of reasonable costs;

2. The principle of comparability

That is, there should be ***similarity between activities with similar purposes. Indicators, measurement results between different activities can be compared with each other;

3. Principle of importance

Screen the status and role of indicators in the entire evaluation work, and select the most representative characteristics and the key indicators that best reflect the assessment requirements.

4. Classification Principle

The content of departmental performance evaluation shall be classified and determined based on the specific responsibilities of the evaluation object, the scope of business work, and the specific requirements of the evaluation unit. The objects of performance evaluation are divided into four categories: regional geological survey institutions, professional geological survey institutions, scientific and technological innovation and technical support institutions, and public service institutions.

5. Relevance principle

That is, the selected performance evaluation indicators are directly or indirectly related to the department's goals.

IV. Methods for establishing performance evaluation indicators

The methods for establishing performance evaluation indicators should choose the balanced scorecard and key indicator evaluation methods.

1. Balanced Scorecard

The Balanced Scorecard was earlier proposed by Robert Kaplan and David Norton of Harvard Business School, whose book "The Balanced Scorecard—— "Turning Strategy into Action" has been greatly promoted in global enterprises. It is a better method for organizational performance evaluation. It evaluates the current situation and development of the organization from four aspects: financial level, business process and operation level, customer level, and learning and growth level. This method not only pays attention to the completion of realistic goals, but also evaluates the development ability of long-term goals, and is strategic.

This method is also a very effective method when applied to the performance evaluation of public institutions. Its functions are:

(1) It is conducive to the combination of short-term indicators and long-term indicators;

(2) The performance of the organization can be evaluated from multiple perspectives;

(3) The indicators can be quantified for easy evaluation.

However, when applied to the performance evaluation of departments under the Bureau of Geological Survey, the indicators need to be adjusted. The main adjustments are: goal completion indicators, process management indicators, financial and economic indicators, learning and growth target indicators, etc.

2. Key indicator evaluation method

The key indicator evaluation method is the KPI evaluation method, which refers to the principle of selecting key indicators when designing performance evaluation indicators for bureau departments.

The establishment of key indicator evaluation indicators emphasizes the basic principle of "SMART":

"S" stands for Speciifc, which requires that performance evaluation indicators should be specific and clear;

< p>"M" stands for Measurable, which requires that performance evaluation indicators should be measurable and evaluable;

"A" stands for Achievable, which requires that performance evaluation indicators should be achievable;

< p>"R" stands for Realistic, requiring performance evaluation indicators to be realistic;

"T" represents Time bound, requiring performance evaluation indicators to be time-limited.

The performance evaluation of the departments under the China Geological Survey should adopt the key indicator evaluation method when establishing indicators. The reasons are:

(1) Save evaluation costs. Because the indicators use important key indicators as evaluation indicators, all tasks do not need to be used as evaluation indicators, saving costs and time;

(2) The expected results can be achieved. Generally speaking, the work is already implemented by the management departments or managers in charge of each department in daily work. However, a small number of particularly important tasks that are crucial to the development of the organization must be evaluated in the performance appraisal. The key indicator evaluation method achieves this. point. By setting key indicators according to the four aspects of the balanced scorecard, the effect of promoting organizational development can be achieved.

5. Establishment of specific indicators for performance evaluation

Based on the above principles and methods, a performance evaluation indicator framework for the units affiliated to the China Geological Survey is constructed, as shown in Table 10-1.

Table 10-1 Performance evaluation indicator framework for bureau-affiliated units