绩效评估,经济增值和管理行为【外文翻译】

本科毕业论文（设计）外文翻译原文：Performance Evaluation, Economic Value Added and ManagerialBehaviour1. IntroductionFor the past two decades many countries started transforming their economies from traditional protected ones to those of more liberalized, globalised and market driven. This period has also seen the economies becoming more knowledge oriented and Human Resources started assuming more prominence in the growth of the economies and businesses. But this has also posed a greater challenge for companies to acquire and retain talented workforce (especially at the strategic & managerial levels). The knowledge economy also started witnessing the rapid rise of the agency problem- conflict of interest between managers and owners. The managers – in their role as the agents–are expected to act in the best interests of the shareholders (principals). Managers will act in shareholders’ interests only if they have right incentives. So it is very essential to align the interests of the managers and shareholders or at least reduce the difference between them.So we need a measure that on one hand rightly measures the managerial performance so that he managers – with talent and greater mobility- can be suitably compensated (and hence retained) and on the other aligns the interests of the managers and shareholders.For some time now Stock Price was thought to be an ideal measure achieving the above objectives. However stock price has many limitations.We shall discuss the pitfalls of stock price as a performance measure before evaluating some of the traditional performance measures and then introduce Economic Value Added as the right measure of managerial performance2. Traditional Measures of Managerial PerformanceShareholders want the maximization of stock price (firm value). So can we measure the performance of a manager directly as reflected by the stock price-Reward managers when stock price goes up and punish them if stock prices behave otherwise? This approach has a major limitation. ‘Stock price is driven by s o many factors that escape from the control of managers, making it an inefficient measure of the true influence of the mangers on firm’s value. Tying top management compensation to stock prices raises another difficult issue. The market value of a company’s shares reflects investors’ expectations. The stockholder return depends on how well the company performs relative to expectations. Suppose a company announces the appointment of an outstanding new manager. The stock price leaps up in anticipation of improved performance. Henceforth, even if the new manager delivers exactly the good performance that investors expected, the stock will earn only a normal average rate of return. In this case a compensation scheme linked to the stock return would fail to recog nize the manager’s special contribution.An ideal performance measure should ensure that the managers would bear all the consequences of their own actions, but are not exposed to the fluctuations over which they have no control. In search of such a metric – traditionally - companies are used to capture managerial performance and reward them through the operation based measures like Profits, EPS, ROCE and ROE. However these measures are not free from limitations.An appropriate performance measure should assess how managerial actions affect the firm value. For this to happen the performance measure must incorporate at least three things (Irala, 2005).a. the amount of capital investedb. the return earned on the capital andc. cost of capital (WACC) – reflecting the risk adjusted required rate ofreturnIs there any measure that includes returns, capital employed and the cost of capital employed in its computation?The Stern Stewart & company, a New York City based consulting firm answersthis question positively and introduces its Economic Value Added (EVA).3. What is Economic Value Added?Economic value added (EVA) provides the rupee value created for investors in a given time period by weighing the profit generated by a decision against the value of the capital employed to generate that profit.EVA is the Adjusted Net Operating Tax After Tax (ANOPAT) for a period minus the capital charge (the rupee cost of capital) of the investment over that period.EVA can be expressed asEVA = Adjusted Net Operating Profit After Taxes (ANOPAT) - Capital CostWhereANOPAT3 = Capital Employed (CE) X ROCE (as ROCE = EBIT (1-T) / CE)Capital Cost = WACCX Capital Employed (CE)ThusEVA = Capital Employed (CE) X ROCE - WACC X Capital EmployedEVA = (ROCE - WACC) Capital EmployedCapital is generally measured by book value.WACC is the weighted Average of cost of Equity (generally measured by CAPM) and cost of Debt.4. EVA as a performance measureIf managers are told that their performance is measured by EVA and compensation is liked to that, they would try to improve EVA by doing one or more of the following.A. Improve returns with the existing CapitalB. Employ Capital productivelyC. Reduce the capital costWhen managers do one or more of the above the value of the firm increases. So improving EVA theoretically improves the value of the firm and hence is a good measure of managerial performanceWhether they are contemplating entering new markets, setting product prices,adding new service lines, or making an acquisition, managers need a way to value the alternatives and choose the ones that will produce highest value to the firm. Cash flow analysis can help them to do that, but EVA can help them more (Bhalla, 2004).5. EVA and the Market Value Added (MVA)As noted earlier, the major attraction with EVA is that it is linked to the value of the firm and hence capable of signaling the value creation or otherwise of it.It is not too uncommon that the Market Value of a firm (Market value of Debt and Market value of Equity) either exceeds or falls short of its Book Value. The difference is the Market Value Added (lost). MV A can be arrived at by discounting back the Future EV As.6. EVA adoption in IndiaCorporate India is slowly catching up. There had been a beginning with several companies like Godrej, TCS, Marico, Dr. Reddy’s, Infosys, etc, adopting EV A in for different purposes.The EV A is closely related to NPV. ‘The Net Present Value of the project is the present value of the economic value added by that project over its life’ (Damodaran, 2002).Godrej Soaps group of six companies is one of the early adopters of EV A. Godrej had a multi-step variable bonus plan, where three levels of targets were outlined. A salesperson who had reached level I would never aspire to do more unless he was sure to touch level II, because he would not get any additional bonus for being midway. It would be more beneficial for him to report it in the next financial years' sales. The company's figures suffered as a result. There was clearly gap in communication between the management and the employees. “A measure was needed that would align the interests of the employee, the company and the shareholder”. Godrej implemented EV A based incentive scheme. Four out of the six companies have outperformed on stretch targets in just one year and most employees made huge bonus receipts.Tata Consultancy Services has put almost all its 15,000-plus employees intoEV A-linked variable pay.At Infosys, EV A is used as a tool to calculate the value delivered to customers. Infosys reasons that if it can tell its customers that what it is delivering in terms of value is higher than what the customer pays Infosys for the serviceMarico Industries, worked out a simplified version of EV A (styled Seva) but uses it more as a signaling device to tell people that capital is important, that investments and acquisitions must have a justification in terms of shareholder value.Dr Reddy’s Laboratories does not use EV A as a measuring device to reward performance. However, it uses EV A as a qualifying criterion for granting performance-based rewards such as variable pay, performance bonuses and stock options (Jagannathan, 2004).Exhibit 3 describes the use of EV A at select Indian companies。