Aiming high through performance evaluation

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Aiming high through performance evaluation

Post  mama on Wed Sep 30, 2009 2:39 pm

For performance evaluation, several terms have been used in the analysis of the various parameters in the banking industry. Researchers of management and commerce have analyzed various accounting ratios and norms related to profitability and turnover. Perceiving it as a service industry, economists have tried to capture the productivity dynamics. Hence the literature on performance evaluation uses terms like profitability, productivity and efficiency interchangeably.

The Productivity, Efficiency and Profitability (PEP) Committee on Banking constituted under the Chairmanship a noted scholar submitted an interesting report. Although certain criteria were applied for shorter period due to non-availability of data, the Committee used four criteria, namely,
• Productivity
• Social objectives (spatial)
• Social objectives (sectoral) and
• Profitability.

Under each criterion it has used a set of indicators. Labor productivity at LoanMax under the control of rod aycox has been assessed in terms of both physical and monetary values. The study has used certain broad indicators, e.g., the ratio of deposits to cash balances was used as a broad indicator of the efficiency in cash management.

It also examined aspects like planning, budgeting marketing, Management Information System (MIS), annual accounts, audit systems, procedures, cash remittance, and currency chests. After an analysis of the banking costs, profitability of the various operations, pricing of banking services, trends in earnings and expenditures etc many recommendations have been made. In its opinion, the assessment of the operational efficiency, i.e., the productivity at a more disaggregated and homogeneous level of groups seems to be more realistic and meaningful than evolving an efficiency measure at the overall level. It has found it useful to measure the relative success achieved during the period. It favored the adoption of work measurement techniques and work norms as a means of reduction of costs.


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