Take the implementation of performance appraisal as the starting point to lead all employees to participate in budget management

Foreword

With the refined development of enterprise management and the advent of the era of intelligent finance, the competitive environment of enterprises has undergone major changes. In order to adapt to the changes in the competitive environment and improve the core competitiveness of enterprises, more refined enterprise management is becoming more and more important. As a key tool for enterprise operation and management, comprehensive budget management is a management mechanism for the whole process and whole process of enterprise operation integrating planning, control, coordination, incentive, evaluation and other functions. The implementation of comprehensive budget management will help promote the cooperation of "people, finance and materials" and serve the realization of corporate strategic goals. In the case of limited resources, comprehensive budget management can achieve the optimal allocation of enterprise resources, and at the same time, comprehensive budget management takes enterprise strategy as the traction and controls the implementation process of business activities to ensure that the enterprise strategy is effectively promoted and implemented in the daily business process to the greatest extent.

At present, the major enterprises in mainland China have begun to pay attention to and carry out comprehensive budget management, but it is still in the development stage, some enterprises lack experience, management methods are not scientific and other reasons lead to the business department that budget management is only the work of the financial department, so it is difficult to play the synergistic effect of budget management, so how to change the cognition of the business department, so that all employees participate in the overall budget management? Performance appraisal is an important means of comprehensive budget management, and all employees can be guided to participate in budget management through the implementation of performance appraisal.

First, the concept of total budget management

Comprehensive budget management is to incorporate a series of activities such as production and operation, fund-raising and investment, as well as the supply, production, and marketing of enterprises, as well as human, financial, and material aspects and links, to form a comprehensive budget system that is connected with each other by the operational budget, investment budget, financing budget, and financial budget. It aims to achieve the strategic objectives of the enterprise, takes the sales budget as the starting point of the overall budget, and makes detailed calculations of a series of activities such as sales, production, procurement, cost and cash flow, and then prepares the budget income and expenditure plan, balance sheet, income statement, and cash flow statement, etc., and carries out reasonable allocation, control and assessment of enterprise resources through the preparation of the budget, so as to maximize the utilization value of resources.

2. The importance of full participation in overall budget management

Total budget management is a management system with comprehensive, coordinated and strategic characteristics. It serves to achieve the strategic goals of the enterprise, and forms specific budget indicators through the dismantling and refinement of the strategic objectives of the enterprise. These budget indicators not only include financial indicators, but also involve business, investment, human resources and other aspects, which require each business department to implement and control according to the quantified indicators in the process of front-end business activities, so as to improve the efficiency of budget implementation.

Secondly, the entire preparation and implementation process of the overall budget involves the entire business activities of the company, the scope of the budget organization includes all levels and departments of the enterprise, which requires the participation of all employees, and each member of the enterprise has the responsibility and obligation to fully understand and participate in the preparation process of the comprehensive budget, and clarify their responsibilities and division of labor, which is conducive to enhancing the sense of responsibility of employees, promoting collaboration between various departments, and enhancing strategic execution.

Finally, because the overall budget involves all departments of the enterprise, in order to effectively implement the overall budget management, it is necessary to fully cooperate and communicate between various departments to help the enterprise achieve effective allocation and full utilization of resources, and at the same time, information sharing between departments also helps to find potential risks and problems in a timely manner, take effective measures to respond and solve, and improve the risk prevention and response ability of the enterprise.

3. The implementation of performance appraisal is an important driving force to guide the participation of all employees

The lack of awareness of budget management is a challenge faced by many enterprises in the process of implementing comprehensive budget management. The management focuses on the operation of the enterprise, ignoring the importance and integrity of the overall budget management, and the preparation of the overall budget is only handed over to the financial leading departments to prepare, which is easy to form a situation where the overall budget management is only the responsibility of the financial department, resulting in the employees not having the awareness of comprehensive budget management, and the follow-up budget management work is not in place, which limits the value of the overall budget. In addition, at present, many enterprises in the mainland have not set up special budget management agencies to strictly control the implementation of the budget, but have handed over the task of budget management to the Ministry of Finance. Although the finance department is a key department of the enterprise, there is still a lack of budget management, coupled with the imperfect budget assessment mechanism, there is no corresponding reward and punishment method, the budget assessment standard is relatively formal, can not play a role in motivating the enthusiasm of employees, and it is difficult to promote the participation of all employees in budget management.

Improve the performance appraisal mechanism, clarify the budget indicators, and organize regular inspections to ensure the implementation of the fund budget management. It is necessary to improve the importance of quarterly and monthly performance appraisal, and take it as an important basis for evaluating outstanding employees at the end of the year, so as to stimulate the enthusiasm of employees to the greatest extent and ensure the high-quality completion of various work objectives and tasks. At the same time, through the development of performance appraisal work, it can also improve the staff's attention to the management of capital budget, so that they can fully realize the value of capital budget management, and at the same time clarify the hierarchical goals, accurately implement individual goals, lay a good foundation for the realization of the overall strategic objectives of the enterprise, truly realize the value added of the enterprise, realize the consistency of the corporate strategy template and interests, and build a virtuous circle.

As an important means of comprehensive budget management, performance appraisal can strengthen employees' awareness and attention to budget management by linking budget management objectives with employee performance appraisal, guide all employees to participate in overall budget management, break down the cognitive barriers between departments, promote cross-departmental cooperation, and ensure the comprehensiveness and scientificity of budget management, so as to improve the efficiency of enterprise budget implementation.

Secondly, improve the performance appraisal mechanism, clarify the budget indicators, combine the performance of employees with the budget management objectives, establish the corresponding reward and punishment system, and organize regular inspections, so that employees understand that their work results are closely related to the overall efficiency of the enterprise, which can stimulate the enthusiasm and creativity of employees and ensure the high-quality completion of various work objectives and tasks. In addition, performance appraisal can also help enterprises to identify and solve problems in overall budget management in a timely manner.

Through the evaluation and analysis of the performance of employees, we can understand the actual implementation of the overall budget management, find problems in time and take improvement measures, and further improve the effectiveness and efficiency of the overall budget management. Finally, through performance appraisal, the hierarchical goals are clarified, and the individual goals are accurately implemented, so as to lay a good foundation for the realization of the overall strategic goals of the enterprise and truly realize the value appreciation of the enterprise.

IV. Conclusion

Comprehensive budget management is an important part of enterprise management, involving the whole enterprise, which requires the attention and participation of all employees in order to achieve all-round, holistic and efficient management. The lack of awareness of budget management of all employees leads to the lack of attention to budget management and the lack of enthusiasm for participation and cooperation, which affects the effective implementation of overall budget management. To solve this problem, we need to implement the performance appraisal system, associate the performance appraisal indicators with the budget implementation results, establish an effective reward and punishment mechanism, comprehensively improve the budget management awareness and participation of employees, break the departmental cognitive barriers, and achieve the effective implementation of comprehensive budget management.

Author: CUHK Consulting

Source: CUHK Consulting

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