A New Evaluation Method Based on Dynamic Incentive Model and Its Application in Operation Performance Evaluation of Listed Companies

Abstract

Previous studies of operating performance of listed companies usually adopt static comprehensive evaluation method but not dynamic evaluation method. Besides, the evaluation information is aggregated in a simple weighted method, without integration of management tool. Considering these two deficiencies, this paper puts forward a dynamic incentive evaluation model and applies it in the comprehensive evaluation of the operating performance of listed companies. The paper first introduces dynamic incentive evaluation model, and then carries out an empirical study, using the annual reports data (2005-2009) of 13 refrigeration and air-conditioning industry listed companies. The results indicate that, compared with the evaluation results of traditional static method and dynamic method, the evaluation results of dynamic incentive model can reflect the operating performance of listed companies more objectively and comprehensively. Thus this model achieves good evaluation effect and has practical value.