Managerial Performance Evaluation - Based on an Example Analysis

Managerial performance evaluation is an important problem in management science. In order to evaluate managerial performance fairly, a newly named analytical method is presented here. This method, two stage relative efficiency model, evaluates managerial performance by eliminating the influence of existing conditions. An example analysis is given. Empirical results show that managers in firms with relatively superior existing conditions still need to work hard to maintain their competitiveness and achieve better than before performance. On the other hand, managers in those firms with relatively inferior existing conditions can also achieve better than before performance and fair evaluation if they conscientiously make great efforts. The method presented here can avoid penalizing good managers who manage within an unfavorable existing condition as well as avoid rewarding poor managers who manage in a favorable existing condition. In a word, the newly named analytical method is an equitable and objective measuring method for efficiency.