iBusiness, 2013, 5, 6-9
http: //dx.doi.org/10.4236/ib.201 3.53B002 Published Online September 2013 (http://www.scirp.org/journal/ib)
Research on the Technology Enterprise Performance
Evaluation Index System
Lan Fu
Jiangxi University of Finance and Economics Statistics School.
Email: fulan60010068@sina.com
Received May, 2013
The purpose of this essay is to design a framework of a performance evaluation system which is subject to the charac-
teristics of China technology enterprises. It based on the analyzing the principles and significance of the performance
evaluation system of technology enterprises. The framework will promote the standardize management of technology
enterprises of China.
Keywords: The Technology Enterprise; Performance Evaluation; Index System
1. Introduction
1.1. Recognized Principles and Basis of a
Technology Enterprise
There is no clear conclusion concerning the definition of
the technology enterprise. However, people can obtain
the identified principles and basis of a technology enter-
prise based on the operation of the relevant documents
and the relevant departments of government.[1]
1.1.1. The Recognized Principles of a Technology
The loose-principle, at present, the ministries and com-
missions of the State Council, the institution of financial
regulatory and local council have a different standard on
the recognized of a technology enterprise. For instance,
the Technology Ministry, the Financial Ministry and the
State Administration of Taxation issued “Recognition of
management methods concerning the high-tech enter-
prise”. While the China Banking Regulatory Commission
(CBRC) and the Technology Ministry jointly released
guidance on further increase of SME credit support.
Therefore, for the r ecognition of a technology enterprise,
it should take the appropriate loose principles instead of
narrow principles and cover all tech SMEs and micro-
The low-cost principle, for the recognition of a tech-
nology enterprise, the identification of cost should be
considered. In addition, it should try to reduce the recog-
nition of cost. Thus, the requirements of a recognized
standard should not be too complex, and the identified
process should not be overly inconvenient. Briefly, the
recognized standard should be as simple as possible, easy
operation and implementation.
1.1.2. The Recognized Bases of a Technological
In light of the loose and low-cost principles, a technology
enterprise can be recognized if it can meet one of the
following conditions :
A) A enterprise has been identified as high-tech enter-
B) A private techno logy enterprise has been registered
in the Provincial Science and Technology Department;
C) A enterprise has implemented a municipal or mu-
nipal above tech nology project in the past three years;
D) A enterprise of implementing patent technique or
independent proprietary intellectual rights.
1.2. The Importance of Evaluation of a
Technology Enterprise’s Performance
The essence of performance evaluation is a measure of
management and control. It provides a reference to
managers by the comparison of an occurred result and a
pre-determined criterion before they take a further step.
Firstly, correct performance evaluation for technology
companies can assist investors to correctly understand the
technology enterprises. Secondly, it makes the incentives
function properly. Further more, management methods
and process innovation of technology enterprises benefit
from it.
However, enterprise production and management
capabilities, process and results can be reflected through
a number of financial indicators and innovation ability
Copyright © 2013 SciRes. IB
Research on the Technology Enterprise Performance Evaluation Index System 7
index. According to the characteristics of technological
enterprise, its performance indicates the reality of the
profitability and fu ture grow th and developmen t po ten tial.
Therefore, constructing a comprehensive scientific evalua-
tion index system has become an important part of the
performance evaluation of the technological enterprises.
1.3. The Characteristics of Technological
1.3.1. Enterprises with a Flexible Organizational
The flexibility of its organizational structure is mainly
reflected in two aspects. On the one hand, companies can
adjust the setting of the business functions in terms of the
changes of the market. On the other hand, employees can
at any time according to the changes of the business in-
ternal flow. This flexibility allows the entire org anization
in a flexible flow state, able to change with the external
market fluctuations.
1.3.2. Enterprises have Employees with a Strongsense
of Innovation and Innovative Capacity
The employees in the enterprise are initiative and strong
knowledge-based employees. They possess the know-
ledge and skills of the enterprise, the comprehensive judg-
ment and decision-making ability, and are subject to full
authorization and incentive to work can work indepen-
dently .
1.3.3. Speeding up the Product and Service
Innovation of Enterprises.
The face of the speed changes in the environment, the
enterprise through continuous, comprehensive collabora-
tive innovation to the market faster than the competition
to provide products and services to meet customer needs,
and thus gain an advantage in the market competition.
1.3.4. Producti on by Standardized Transi t i on to the
Enterprises should pay more attention to the market de-
mand for differentiated and the characteristics of individ-
ual consumers. In addition, enterprise can adopt a non-
standardized production according to customer demand.
Meanwhile, it utilizes small quantity and variety of pro-
ction to replace the large qu antities and single product of
traditional enterprises. Finally, technology enterprises
obtain business growth through emphasizing innovation.
2. The principles of Constructing a
Technology Enterprise Performance
Evaluation system
2.1. The Principle of Objective and Impartial
The inputs and outputs of the process of the high-tech
enterprises are extremely complex and difficult to under-
stand. This leads to the performance evaluation is very
prone to subjective bias, which provides an opportunity
to meet the different purposes of the evaluators. There-
fore, in the evaluation of corporate performance, the
evaluator must be judged aloof and independent stance
and exquisite competent. In order to reduce the influence
of artificial factors of enterprise performance evaluation,
enterprise should evalu ate pros and cons objective stance,
a fair attitude evaluate gains and losses, reasonable way
to measure corporate performance[2].
2.2. Scientific and Rational Principles
The design of an effective performance evaluation system
must reflect the unique characteristics of the enterprise.
Performance evaluation system can follow the traditional
performance evaluation system in some of the indicators
of technology enterprises, with its own characteristics,
taking into account the scientific development of a
number of other indicators. The relationship between the
profit targets of enterprise and technology enterprises in
the research and development process, innovation, know-
dge assets contribution is vague and difficult to quantify.
Consequently, scientific and reasonable method should
be used to evaluate these aspects.
2.3. Condensed Applicable Principles
Traditional performance evaluation in the assessment of
technological enterprise performance is too one-sided
and simplistic. Thus, it is easy to distort the true perfor-
mance of the high-tech enterprises. However, if in con-
structing technology enterprise performance evaluation
system in the face mask to work out the many profound
and sophisticated indicators, the evaluators will inevitably
lead to a loss. So we must seize the technological charac-
teristics of enterprises to identify the essential things to
work out some key indicators op erability. Otherwise, the
performance evaluation system can not be members
agree, accepted by the organization members. This situa-
tion will lead to organization members ignore its existence
or less reluctant to comply with. Such information
provided may be inaccurate, untimely and not objective.
Therefore, a good performance evaluation system must
be as required according to the user's heart design.
2.4. The Principles of Service Goals
The purpose of the business existence is to obtain the
profit, which represents the efforts of enterprise on the
profitability of the corporate research and development
activities, production and business activities, marketing
activities and other aspects. Enterprise performance
evaluation should also serve the aims of enterprises and
contribute to the profitability of enterprises. Enterprise
Copyright © 2013 SciRes. IB
Research on the Technology Enterprise Performance Evaluation Index System
Performance Evaluation can found some of the problems
that hinder the profitab ility of the busin ess by the evalua-
tion of the key factors affecting the profitability of the
business. Then it can provide timely and detailed infor-
mation for managers operating decisions.
3. Technology Enterprise Performance
Evaluation index System
3.1. The Technology Enterprise Performance
Evaluation of design
From the above analysis, constructing a technology en-
terprise performance evaluation index system should not
only consider the profitability of the en terprise but also to
consider the growth and development potential of tech-
nology enterprise.[3] However, growth and development
potential of an enterprise is depends primarily on the
intellectual capital of the enterprise. Therefore, technol-
ogy enterprise performance evaluation system should
include two aspects. One is to reflect the profitability of
the financial indicators. Another one is to reflect the in-
novation ability index of business growth and future de-
velopment potential. This essay designed a technology
enterprise performance evaluation index system. As
3.2. Interpretation of Indicators and Data
3.2.1. Interpretation of Indicators
ROE = net profit / average net capital × 100%
Net profit margin = net profit / sales total income x
Return on total capital = EBIT / average to tal capital x
Total capital turnover = Net operating income / Aver-
age total assets × 100%
Current capital turnover = the main net operating in-
come / Average total current assets × 100%
Capital-liability ratio = Total liabilities / total assets x
Multiples of interest earned = EBIT / interest expense
The growth rate of net profit = (base period sales -
sales of the reporting period) / sales of the reporting pe-
The growth rate of net capital = (base period net assets
- net assets of the reporting period) / net assets of the
reporting period × 100%
The growth rate of total capital = (base period total
assets - total assets of the reporting period) / reporting
period, the total assets × 100%
Per capita training costs = annual training costs / sales
revenue × 100%
Introduction of talent invested = annual talent refer-
ence funds / sales revenue × 100%
Quality of human capital = with co llege or higher staff
/ number of employees × 100%
Technical inputs = R & D expenses / total sales ×
Intellectual Property right= the number of corporate
patent owners
Innovation capability = new product to market / the
total num ber o f pr oducts dev e l oped x 100%
Marketing investment = sales investment / sales reve-
nue × 100%
Social relations = bank corporate credit rating (good,
general, poo r)
Market share = dominant product sales revenue / the
same industry product revenue × 100%
New product revenue to total revenue ratio = new
product revenue / total revenue × 100%
New product profit to total profit ratio = profit / total
profits × 100%
3.2.2. Sample Selection and Data Collection Methods
The paper selected the range of samples form the prov-
ince science and technolog y enterprises. The sample data
is from a table statistics of the Provincial Bureau of Sta-
tistics, industrial enterprises, financial statements, and
annual report data. This involves multiple industries, the
pharmaceutical industry, mechanical industry, electronics
and communications industry, with full representation.
4. Technology Enterprise Performance
Evaluation Method Selection
In order to reflect the performance of technology enters-
prises’ effectively, enterprises could choose a method
which can quantify the impact factors of performance.
This is the purpose of selection of performance evalua-
tion method. The method is not based on objective
methods of expert judgment. Thus, it can remove the
interference of artificial factors, and demonstrate the ob-
jectivity and fairness. In addition, technology enterprises
with high input, complex performance evaluation, cov-
ering a wide range of indicators reflect different aspects
enterprise performance situation, but in a way larger
principal component analysis can simplify complex
problems, an effective solution to this problem. More-
over, from the sample size, the method can ensure that
the number of samples is far more than the number of
indicators, which meet the basic requirements of the
principal component analysis. Finally, principal compo-
nent analysis is in line with the characteristics and the
development of technology enterprises influencing fac-
tors to adapt its complex characteristics.
Principal component analysis is a method for dealing
Copyright © 2013 SciRes. IB
Research on the Technology Enterprise Performance Evaluation Index System
Copyright © 2013 SciRes. IB
with multi-information. The principle of the method is to
refine a few unrelated composite indicators from the
multiple interrelated indicators. In other words, it ex tracts
important information from the original wealth of infor-
mation. Then it composes a new composite indicator.
Meanwhile, these indicators can fully express the origin-
nal information to simplify the ev aluation index purpos es
on the basis of loss or less loss.
Principal component analysis is based on the data it-
self and is an objective evaluat i on of t he weight i ng method.
It is in terms of the embodied values on the evaluation
indicators of the actual observations, and analysis of the
internal structure of the relationship between the various
indicators, accurate exclude irrelevant indicators, so as to
ensure the objectivity of the evaluation results based on
maximizing the process simple, fair, objective evaluation
of the performance. Different stakeholders have a great
difference in attention for each indicator. However, the
principal component analysis can simplify information
properly. Therefore, this method is a good way to coor-
dinate the above problems.
In summary, this essay indicates the unique character-
istics of technology enterprises and adopts the principal
component analysis to assess the performance of the
technology enterprises. It also combined the financial
indicators and innovation indicators through analyzing a
few new variables which transforms from the original
number of variables. However, it still remains the basi-
cally information of the original variables. According to
the data it to get the weighting of indicators in a com-
prehensive performance evaluation obtained evaluation
results more objective and fair.
[1] X. C. Meng, “Growth of Venture Capital and High-tech
Enterprises,” Southwestern University of Finance and
Economics Press, 2003
[2] F. Micro, “Intellectual Capital Evaluation Index System
of Industrial Engineering and Management,” Vol.1, 2001.
[3] “Orchestration High-tech Enterprises, Market-oriented
Strategy and Strategic Performance Evaluation Study,”
Scientific management research Study, Vol. 6, 2005.