Commercial Bank Performance Appraisal Practice

Author: Xu Xuejun (Editor-in-Chief), Dai Yu (Deputy Editor-in-Chief), Li Yong (Deputy Editor-in-Chief)
Publisher:
Publishing Date: 2006-09-01
Features: Since the 21st century, the reform and development of China's banking sector have been advancing rapidly, and commercial banks are facing severe challenges. One prominent issue is the need for talent support, particularly high-quality professionals who understand business operations, management, and are familiar with banking business as well as market economy rules. Cultivating a large number of professional managers and bankers is an urgent task for China's banking sector at present. Talent development requires education and training, demanding significant progress in banking training to make commercial banks true "learning organizations." However, banking education and training have high requirements and strong professionalism, making it challenging to execute effectively. Based on years of training practice, we have found that to do well in banking training, three key issues must be addressed: curriculum design, teacher selection, and textbook development. Commercial bank performance appraisal follows the general theories and methods of performance appraisal in management, but it also has characteristics combined with its corporate nature and business features. Therefore, mastering commercial bank performance appraisal must align with changes in the operating environment, organizational structure evolution, changes in the headquarters-branch management model, and adjustments in business structure. In this book, we will use the commercial bank performance appraisal system as a starting point to establish the headquarters-branch management model. The reason for this approach is that both theoretically and practically, we have deeply recognized that establishing the headquarters-branch management model is the key to thoroughly understanding all aspects of commercial bank management, including the performance appraisal system. The headquarters-branch management model issue essentially revolves around how management authority is divided and defined between the headquarters and branches. In the past, with the "small headquarters, large branches" model, branches had significant management authority, with the operational focus on branches. Today, under the "large headquarters, small branches" model, the operational focus is on the headquarters, while branches have evolved into service windows and business operation platforms. In the future, with the business division system becoming the mainstream of commercial bank organizational structure, under the "small headquarters, large business divisions, small branches" model, the operational focus may shift to the respective business divisions. Thus, as the operational focus changes, the commercial bank performance appraisal system must also adapt accordingly. In the creation of this book, we have particularly emphasized the impact of the headquarters-branch management model on the commercial bank performance appraisal system. The commercial bank performance appraisal system is a highly complex system, which can be summarized mainly into aspects such as external evaluation of commercial banks, performance appraisal of management teams, performance appraisal of branches, performance appraisal of outlets, performance appraisal of tellers, performance appraisal of relationship managers, and performance appraisal of functional departments. Although the commercial bank performance appraisal system is quite extensive, its basic principles and methods remain consistent. That is, transfer pricing based on management accounting is the fundamental element of various appraisal indicators and the foundation of all appraisal methods, while the balanced scorecard and key performance indicators are the basic methods for constructing the indicator system and selecting core indicators. In this book, we have particularly emphasized the application of basic principles and methods. Due to its central role in the national economy, the management of commercial banks is strictly regulated by various institutions and regulations. When conducting commercial bank performance appraisal, regulatory and legal factors must also be considered, placing the performance appraisal system under the umbrella of regulations and laws.