Exploring Optimizing Performance Appraisal Systems Based on Budget Management

Abstract

In corporate management, the degree of synergy between budget management and performance appraisal directly impacts the efficiency of organizational resource allocation and the effectiveness of strategic implementation. According to the "Enterprise Budget Performance Management Development Report" released by the Chinese Academy of Fiscal Sciences, 60%-75% of enterprises experience a misalignment between budget targets and performance indicators. The resulting sunk costs average 10%-15% of an enterprise's annual budget, resulting in wasted resources and weakening the support provided by management tools for the business. Based on the balanced scorecard theory and dynamic budget management theory, this article explores optimization paths for a performance appraisal system based on budget management from five perspectives: current situation diagnosis, theoretical integration, technical support, mechanism innovation, and cultural support. The study found that enterprises currently face common problems such as unrealistic goal setting, unbalanced indicator design, and ineffective execution and monitoring. Deep integration of budget and performance can be achieved through strategies such as establishing a dynamic target adjustment mechanism, improving a multidimensional indicator system, strengthening ERP system technology capabilities, implementing quantitative management and control throughout the entire process, and promoting organizational cultural transformation. Practice has shown that the optimized system can improve resource allocation efficiency by about 20%, enhance corporate strategic execution, and provide reference management upgrade solutions for organizations of different sizes and industries. The relevant conclusions can be verified through industry statistics and theoretical practice.