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Research on Enterprise Performance Evaluation and Incentive Mechanism
On the Application of Performance Appraisal in Incentive Mechanism

Abstract: In recent years, more and more enterprises in China have adopted performance appraisal system to stimulate employees' potential, but the general effect is not good. Based on this situation, this paper analyzes the function of performance appraisal process design, method and result feedback in the incentive mechanism, and proves that reasonable performance appraisal can become the core of the incentive mechanism and play a promoting role, and vice versa. On the basis of this analysis, it provides some references for enterprises to promote performance appraisal and really motivate employees.

Keywords: the use of performance appraisal incentive mechanism

I. Introduction

At present, performance appraisal has become one of the core links of enterprise management, and the key degree of its influence on enterprise performance has been widely concerned by enterprises. Performance appraisal mainly examines employees' past performance and pays attention to employees' present value. High-performance work system is conducive to improving employees' satisfaction and enthusiasm, thus improving work performance. Performance appraisal refers to the process that appraisers use scientific and reasonable methods to evaluate the completion of employees' work tasks, the performance of employees' work responsibilities and personal development, and feed back the evaluation results to employees. The main contents of the assessment include the performance, working ability and working attitude shown in the work process, and the evaluation results are used to judge whether the assessed person is qualified for his post. The ultimate goal is to confirm and motivate the work performance of the assessed, improve the work style of the assessed, improve its work efficiency, and test the rationality of the assessment method and whether it can motivate employees. Performance appraisal is a common means of human resource management and a common way to motivate employees, which provides basic information for other aspects of human resource management. [1] The performance appraisal is completed by the superior managers and employees in the form of * * * cooperation, which has a strict requirement: there must be a continuous two-way communication channel between the superior and employees, otherwise the purpose of appraisal will not be achieved, and the role of encouragement will not be achieved. This is a constructive measure to achieve the goals of both sides. What is needed is that employees and examiners work together to remove obstacles, learn together, improve together and achieve a win-win situation.

Incentive mechanism is the sum of various incentive measures in enterprises. The establishment of incentive mechanism has many important functions and purposes. We need to know under what conditions and under what conditions employees are more willing to go to work on time and stay instead of jumping ship, and how to be more efficient. Performance appraisal has great variables in motivating employees, which deserves further study. Practice has proved that a reasonable and scientific incentive mechanism is a single track for enterprises to achieve their goals, and the other is performance appraisal, which complement each other. The operation of this dual-track system can ensure that enterprises move in the right direction. William james, a professor at Harvard University, found in an employee motivation survey that employees who get paid on time can keep their jobs as long as they play 20%-30% of their abilities. If they are given enough incentives, their abilities will reach 80%-90%. [2] This shows that with the continuous progress of science and technology and the increasing complexity of production technology, it is increasingly important to rely solely on machinery and equipment to stimulate the creativity and innovation of employees. In today's fierce competition at home and abroad, in order to survive and develop, and constantly improve competitiveness, enterprises must motivate all employees to the maximum extent, fully tap the inherent potential of human resources, and let employees voluntarily strive to achieve organizational goals. From the perspective of work performance, motivation: performance = ability × enthusiasm. In other words, if two employees have the same ability, but their performances are completely different or very different, then the reason is very simple, that is, there is a deviation in enthusiasm. What is the key to solving this problem? Is to find ways to guide the enthusiasm in the right direction, make the right choice, and constantly use incentives to continuously and steadily mobilize the enthusiasm of employees in order to achieve the ultimate goal.

Therefore, a systematic, scientific and reasonable performance appraisal can improve the positive role of the incentive mechanism, effectively motivate employees' sense of belonging to the enterprise, strive to complete the work objectives and realize the ultimate vision and mission of the enterprise.

Secondly, the design of two-way performance appraisal scheme improves the incentive effect of incentive mechanism.

The main basis for enterprises to formulate performance plans is the work objectives and responsibilities of employees. In the performance planning stage, managers and employees need to reach a * * * understanding of performance expectations. On the basis of * * * knowledge, employees make a commitment to work objectives, and managers confirm their commitment to employees. Between managers and employees, * * * participating in planning and designing plans can motivate employees to complete tasks. This protocol-based planning can stimulate employees' sense of responsibility and identity, so as to achieve the same goals of enterprises and employees. Research shows that when people personally participate in the decision-making process, they tend to stick to their own positions, and they will not easily change their positions under the influence of external forces, which is very encouraging for employees to make public commitments.

As the saying goes, "Planning is the forerunner of action". Without a performance appraisal plan, it is difficult to achieve the goal consistency of every employee in the organization. [3] The performance plan design can ensure the implementation of the organization and team plan, and the personal work plan should obey the organization. At the same time, the implementation of organizational plans depends on the work of employees, and the quality of employees' personal plans is directly related to the survival and development of organizations, and the two promote each other.

Two-way advantage: it helps to combine organizational goals with employee personal development goals. Planning at all levels, fully absorbing employees' opinions, can stimulate employees' interest in achieving their goals. The employees in Philips' semiconductor department, from the initial change plan of increasing 5% to the goal of increasing to 20% later, are the result of the high participation of employees. [4] Without direction, the ship can only drift in the sea, and those who have no return and no goals can only spend it in waste. Direction and goals have great incentive for people. A ship without power can only be duckweed everywhere, a tragic fate.

The performance appraisal design with employee participation is convenient for employees to find their own advantages and disadvantages. When planning, it is necessary to comprehensively consider the environment and their own situation, so that employees can fully understand their own strengths and weaknesses, and what kind of requirements they have for enterprises in order to achieve their goals, so as to better communicate with departments and get recognition and help. Clear goals, with the understanding of their own situation, enterprise requirements and conditions given by enterprises, employees can complete tasks according to the target requirements. Such employees can fully participate, manage independently, help each other and cooperate with each other to make the best use of everything and people. Why not?

In view of this, in the planning stage, enterprises should create a good communication atmosphere, requiring managers and employees to pay attention to this process, and set a special time for performance planning communication, and the communication atmosphere should be relaxed, rather than putting pressure on each other. It is best to choose those leisure places, cafes, etc. , make employees easy to accept, so as to achieve the effect of motivation. In the process of communication, managers and employees maintain an equal relationship. In communication, enterprise managers should not only listen to employees' opinions and suggestions, but also summarize and analyze employees' goals and ideas, knowing that employees can achieve personal goals through mutual coordination, and finally encourage employees to make decisions and implement enterprise performance management together with employees.

Third, a reasonable performance appraisal method promotes the incentive mechanism to act on employees.

With the crazy growth of foreign companies in China, most enterprises in China are also facing unprecedented challenges. Based on this situation, China's family businesses have also taken some effective measures for rectification, and established their own performance appraisal scheme to motivate employees. It is a science and an art to establish a performance incentive system suitable for this enterprise, evaluate the performance of employees and give effective feedback to stimulate the enthusiasm and innovative spirit of each employee. Scientific and reasonable performance appraisal combines qualitative evaluation with quantitative evaluation, and it has become the fundamental task of enterprises to use effective promotion and promotion incentive system to embody the principle of fairness and justice, and to stimulate employees' enthusiasm and creativity through various rewards and promotions.

It is indeed a challenging task for assessment to truly create value among employees and play the role of traction and encouragement. Below, two common assessment methods are used to analyze the role of motivating employees in enterprises.

1 and 360-degree evaluation methods are combined with Ma Si's hierarchy of needs theory.

360-degree feedback, also known as "360-degree performance appraisal method" or "all-round appraisal method", was first put forward and implemented by Intel, a model enterprise known as "the symbol of American power". [5] 360-degree performance feedback refers to understanding personal performance from employees themselves, bosses, direct subordinates, colleagues and even customers, as shown in figure 1. Communication skills, interpersonal relationship, leadership ability, administrative ability ... Through this ideal performance evaluation, the assessed can not only get feedback from himself, his boss, subordinates, colleagues and even customers from various angles, but also clearly know his shortcomings, advantages and development needs from these different feedbacks, so as to make his future career development smoother.

Figure1:Schematic diagram of 360-degree evaluation

Through the 360 top-down assessment method, we can integrate opinions from all sides, understand all employees from different angles, let employees know their strengths and weaknesses more clearly, continue to carry forward or constantly improve, so as to achieve the purpose of improving performance and constantly motivate employees to do their best. However, employees are active, which requires us to combine the actual situation and needs of employees to operate specifically. It is fair to evaluate a person in this way. When there is a big disagreement between superiors and subordinates, managers should communicate with employees in time, and reach an agreement where there are objections. The superior can help the subordinate to improve, which can make the subordinate employees feel comfortable, have a sense of belonging and be more inspiring. 360-degree examination can improve the incentive mechanism, thus improving the incentive effect.

Secondly, the advantage of 360 assessment is that different examiners have different characteristics, as shown in Figure 2:

Evaluate the strengths and weaknesses of the subject.

The boss has a clear goal orientation and understands the business content, which is obviously influenced by the appraiser's personal subjectivity.

Colleagues work together for a long time, know more about each other and evaluate objectively, which is conducive to cooperation and unity. Sometimes, individuals will deliberately belittle the assessed.

Usually reduce self-prevention awareness, understand your own shortcomings, improve yourself, and realize self-management awareness. Generally speaking, I think I am taller than others.

Subordinates can diagnose management style, and there will be personal subjective factors to get feedback from subordinates.

Information that customers live outside the organization is often not easy to obtain objectively and fairly.

Figure 2: Characteristics of different examiners

And Ma Si's hierarchy of needs theory divides people's needs into five levels, as shown in Figure 3:

Figure 3: Ma Si needs a hierarchy.

Five demands are like a ladder from low to high. Generally speaking, people always meet the needs from low level to high level. When a level is satisfied, it will develop like a higher level. The higher the level, the less the percentage of satisfaction. Sometimes, at the same stage, different people have different needs, and even the same person is subject to multiple needs. When applying the 360-degree evaluation scheme, managers should be far-sighted rather than short-sighted. According to the research of western management psychologists, Ma Si Knorr's hierarchy of needs theory can help entrepreneurs manage their enterprises well and motivate employees. Table 1 is a reference table that needs the close combination of hierarchy theory and management measures.

Table 1 Demand Hierarchy and Related Management Measures Table [6]

Demand level, incentive (purchase target), management system and measures

Safety requires wages, a healthy working environment, various benefits, health care (medical equipment), working hours (rest), living facilities and welfare equipment.

Safety requires job security, accident prevention security, pension system, health insurance system and accident insurance system.

It belongs to the needs of love and friendship (good crowd relations), the system of group acceptance and organization, the system of interest distribution, the system of group activities, the system of entertainment and the system of education and training.

Respected needs, status, power, responsibility, salary relative to others, personnel assessment system, promotion system, recognition and bonus system, selection system, and Committee participation.

The need of self-realization can develop an organizational environment with personal specialties, challenging work decision-making participation system, proposal system, research and development plan and labor-management meeting.

From the above-mentioned 360-degree assessment and Ma Si's hierarchy of needs theory, enterprise managers should set the focus of assessment according to the needs of employees, so as to achieve the purpose and effect of motivating employees. First of all, meeting the safety needs of employees is the foundation. Reasonable salary design and assessment linked with salary and welfare can play a certain role and often stimulate employees to achieve the set goals. The second is the need for security. Safety is also very important for employees. Imagine, what kind of standards can an enterprise without security guarantee expect its employees to meet? Can they risk their lives to work for the enterprise? Thirdly, out of the need of belonging and love, the enterprise is a team, and adjusting employees' perception of teamwork can improve employees' satisfaction, thus improving incentives. The discussion and formulation of relevant systems require the participation of employees. Fourth, the need for respect. When conducting a 360-degree assessment, taking promotion and salary increase as one aspect of the assessment can motivate employees to work hard in this respect. Finally, the assessment method is not immutable, and enterprise managers should realize that under the current situation in China, many employees have a stronger demand for self-realization. When implementing 360-degree assessment, we should consider the self-realization of employees as much as possible, realize human potential and achieve perfect humanity. [7]

In short, as long as the assessment mechanism and demand theory are reasonably applied together and the advantages and disadvantages of all aspects are considered, the incentive mechanism of enterprises can be activated and a good and healthy circulation system can be formed. This system is a kind of values and corporate culture. As an organism, employees are not simply controlled by external forces or unconscious impulses, but by their own values and selectivity. Incentive theory is a theory that directly or indirectly demonstrates people's needs. Motivation needs to be stimulated, and motivation needs to find the goal of meeting the driving force of demand, so as to motivate employees to achieve the established goals of the enterprise. Combine the 360-degree evaluation with the demand theory, which captures the key. Employees will develop productivity to change production tools for their own needs, so that enterprises can make continuous progress. People's needs are different according to different situations. According to the different needs of different people, different assessments can be taken in a targeted manner to achieve real results.

2. Check the incentive effect of employees with the method of management by objectives.

Management by objectives: Management by objectives is a modern management science, which is goal-oriented, people-centered and result-oriented, so that organizations and individuals can achieve the best performance. Management by objectives is also called "results management", commonly known as responsibility system. It refers to a management method that determines work objectives from top to bottom with the active participation of individual employees, and implements "self-control" in the work to ensure that the objectives are achieved from bottom to top. [8]

The assessment of management by objectives is to reward employees according to their work achievements. This evaluation is especially useful for efficient employees whose production goal is quantity. In China's labor-intensive enterprises, the role of this assessment system has been greatly strengthened, and it has also played a great incentive role for employees' enthusiasm. Achieving goals has become the primary goal of employees.

First of all, personally participate in the incentive role of goal setting. Frum, an American psychologist, believes that people are always eager to meet certain needs and achieve certain goals, and this goal has an impact on stimulating people's motivation, which depends on the target titer and expectations. [9] This shows that the employee's emphasis on the goal will directly affect his motivation and behavior to achieve the goal. Because the goal is achieved through the unremitting efforts of employees themselves, only the recognized goal is attractive and can stimulate the energy of employees to generate strong motivation. Through this step, the "self-control" incentive function can be realized. When employees are clear about their goals, powers and responsibilities, they can compare their labor achievements with their goals to evaluate their performance and whether they can meet the assessment standards.

Secondly, the incentive function of responsibility. The assessment method of target management plays a role because it can enhance the sense of responsibility of employees, and the sense of responsibility is a huge incentive factor. In fact, many employees are motivated by a strong sense of responsibility. It is an important way to give full play to the enthusiasm, initiative and creativity of employees, achieve goals and enhance their sense of responsibility. The most effective means to enhance the sense of responsibility is to implement "self-control" in the process of achieving the goal. Only relying on mandatory management means to achieve the goal will be counterproductive. Without the recognition and respect of employees, enthusiasm and initiative will not be stimulated, and the goal will be difficult to achieve or fail to meet the required quality.

Third, the incentive and guiding function of the goal itself. The goal is the expected result, whether it is the result of individual, department or overall efforts. The goal not only points out the direction for management decision makers, but also provides the standard for employees to measure their actual performance. The assessment method of target management can greatly motivate employees. After the goal is determined, employees can see the future clearly, thus playing an encouraging, upward and inspiring role. In the process of implementing the goal, because the goal is advanced and challenging, it must be achieved through certain efforts in the actual implementation and realization process, which is conducive to stimulating the enthusiasm and creativity of employees; When the management and employees achieve their goals, because their wishes and pursuits are satisfied, employees will also see their expected results and work results, and will feel satisfied and proud psychologically, thus encouraging employees to undertake new tasks with greater enthusiasm and confidence, realize new goals, and form a virtuous circle system. [ 10]

Fourth, make full use of the assessment results to motivate employees.

The performance appraisal process is the most important incentive for employees. It is very effective to correct problems more conveniently through the process, but the auxiliary role of the appraisal results can not be ignored. Different enterprises have different uses for the assessment results, and of course they also have different incentive effects. Not only that, different performance appraisal methods pay different attention to the results. The results of 360-degree assessment method and target assessment method in motivating employees are different, each with its own emphasis, but they complement each other.

360-degree assessment is mainly manifested in providing feedback guidance and avoiding evaluation mistakes in motivating employees. Provide feedback guidance: 360-degree performance appraisal emphasizes effective communication from multiple angles, and the results come from many aspects, which is conducive to employees' self-awareness and reflection and directly guides employees' personal career development. Good can help employees understand their positions and change jobs if necessary. If the performance is not good, it may be because the position is not suitable, so you can adjust to a position that you are better at, so as to help employees understand their weaknesses and provide information for their training and development. Avoid assessment errors: 360 performance appraisal is an all-round assessment, which can reduce assessment errors. Every employee wants his assessment results to be true, reliable, fair and just, so as to convince employees, make employees recognize them, avoid the distortion of employee assessment results, and affect employees' emotions, thus achieving the incentive effect.

The results of target assessment are more motivating to employees. The results of target assessment are generally used to meet the physiological needs of employees rather than the improvement of strategic plans. In order to enhance the incentive effect of salary, in many enterprises, the completion of the target and the amount of completion are linked to salary reward and salary, and this system is only used by ordinary sales staff and production workers. Employees often work hard to achieve the results of assessment objectives, so as to achieve the same period with the enterprise. A reasonable goal plan can make employees full of motivation, and the correct evaluation and recognition of employees' work results can accelerate employees' loyalty to the enterprise and stimulate employees' enthusiasm and creativity.

Verb (abbreviation of verb) conclusion

Performance appraisal is not for appraisal. Assessment is only a means of management, not the purpose of management. If the assessment system of an enterprise can't motivate employees and integrate employee development with enterprise growth, then the assessment of this enterprise is meaningless and the assessment system of this enterprise is invalid. How to make employees regard the mission and objectives of the organization as their own through effective performance appraisal? What about the work that makes employees consciously work hard to achieve this goal?

First, enterprises should constantly improve managers' awareness and quality ability, strengthen the development of managers' management ability, and really make them play a traction role at all levels of enterprise management. [1 1] Industry managers should guide and stimulate employees' work motivation through the assessment process and results, so that employees can grow in effective incentives. Constantly improve yourself.

Second, the smooth performance appraisal can not be separated from the establishment and improvement of the overall human resources development and management framework of the enterprise. Enterprises should construct the overall framework of human resource management from the perspective of overall strategy, so that performance appraisal and other links of human resource management, especially the incentive mechanism, are interrelated and mutually promoted. [12] Specific measures include: timely target confirmation and performance coaching; Give corresponding rewards and punishments or supervise improvement in time after evaluation; Apply the evaluation results to training and so on. If these measures are not complete, the effect of performance appraisal can not be guaranteed, and motivating employees will become an empty talk and a form.

Third, performance appraisal should be based on respecting employees' value creation. Although it is a vertically extending assessment system formed according to the administrative function structure, it should also be a two-way interactive process. Appraisers should not only pass on the work essentials, goals and work values to employees, but also respect the value creation of employees, and the two sides reach a * * * understanding and commitment. [13] The communication between employees and managers can be completed through rambling, casual and harmonious conversations.

Fourth, we should make full use of performance appraisal to mobilize the enthusiasm of employees. We should not only pay attention to external factors such as material interests and working conditions, but also pay attention to spiritual encouragement to people and give employees opportunities for growth, development and promotion. Only by fully connecting the assessment mechanism with Ma Si's demand theory and fully understanding the needs of employees can we really motivate employees.

In short, an effective performance appraisal system is an important basis for establishing a scientific incentive mechanism. Enterprises must organically combine performance evaluation and incentive mechanism according to the characteristics of the times and the needs of employees, fully stimulate the enthusiasm of employees under the scientific performance evaluation system, constantly sum up, improve and innovate in practice, and correctly, reasonably and scientifically use different performance evaluations to mobilize the enthusiasm of employees. Only in this way can the incentive system really adapt to the current development requirements and meet the more intense challenges of the market.

References:

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[7] Liu Ying, Yang Wentang, Performance Appraisal System and Design [M]. Beijing: China Economic Publishing House, February 2004: 60-65.

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[9] Huang Shunchun, enterprise employees' personality differences and incentives [J]. Enterprise Economy, April 2003: 43.

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[1 1], Zhang, Enterprise Objectives and Incentive Methods [J]. Research on Financial Issues, February 2003: 67.

[12] cheng dejun, Dai, equity characteristics, human resource strategy and enterprise performance [J]. Nanda Business Review, August 2006: 73-75.

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This paper starts with the performance appraisal of enterprises, links the function of performance appraisal with the incentive mechanism, analyzes the incentive function of employees from the aspects of design, operation and results of performance appraisal, and finally puts forward some suggestions for enterprises.

The article has clear thinking and reasonable organization, can analyze problems in connection with the subjects studied, combines the 360-degree assessment scheme with Ma Si's hierarchy of needs theory, and psychologically analyzes the conditions to meet the needs of employees, fully arouses their enthusiasm and creativity, and has novel ideas; On the other hand, it analyzes the core role of performance appraisal in the incentive mechanism from the incentive function of management by objectives, and summarizes how enterprises use performance appraisal to motivate employees to achieve the same goal from several aspects.

However, due to incomplete knowledge, weak ability to analyze problems, shallow content and limited depth of analysis, the article is bland and lacks creativity. Personally, I think there are advantages and disadvantages, and the feasible score is 80-85.