The aim of this paper is to find out how to develop Performance Evaluation System in Balanced Scorecard(BSC). Performance Evaluation System consists of two meanings which are to evaluate a performance of business units and to measure a performance of business unitmanagers. On the other hand, BSC is an important function of the performance evaluation and the implementation of strategy. Then, we describe new performance evaluation system based on strategy in BSC. In this paper, especially we introduce the performance evaluation system in Richo of the first company which is adopted BSC in Japan. And we discuss some demerits of Richo’s performance evaluation system.