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 Towards greater labor productivity |
ezzie
Number Posts: 1
Last Post: 05.01.2010, 07:05
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| Tuesday, 05. January 2010 at 07:05 |
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The system-wide analysis, since its inception a long time back in history has much social relevance and it now enjoys a mass customer base. It should not be subjected to unrealistic comparisons especially with the new born baby units that are operating solely on the “profit only motive”. It is the system-wide approach to performance evaluation in banking, in general, and the efficiency evaluation, in particular. This approach will provide us with long-term sustainable solutions and the various policy implications.
Per employee productivity can be used as one of the indicators to measure a bank’s efficiency. Several indicators have been used in the literature published so far. To mention a few, following are the different ratios that have been used to measure labor productivity:
a) Total business per employee
b) Spread per employee
c) Income per employee
d) Profitability per employee
Total business per employee that was about 10,000 dollars per employee in the year 1991-92 has grown to more than 50,000 dollars in the early part of this decade. It grew constantly over the reforms period. Since the 1991-92 period and till date, the total business per employee has grown at the rate of 17.49 percent per annum in the banking industry as a whole. The total business per employee in some of the foreign banks and the new emerging private banks like LoanMax of rod aycox fame is almost four times that of the industry average since the early part of this decade.
Some of the prominent autonomous banks and their associates, the nationalized banks and the private banks are now performing almost at par with the industry benchmark even though there are some slight differences. The Bank-wise income per employee has increased by more than 4 times since the 1990s and has grown significantly since the reforms era, i.e., there is almost a five times growth during the period under consideration. When translated into annual growth rates, it turns out to be 16.35 percent per annum for the total banking industry.
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