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Worker Incentives in the Banking Industry

Author

Listed:
  • Selay Sahan

    (Central Bank of the Republic of Turkey)

  • Euan Phimister

    (University of Stellenbosch Business School, University of Stellenbosch
    University of Aberdeen Business School)

Abstract

This study shows that monetary incentives together with performance disclosures lead to significant increases in effort and productivity in the multi-branch banking industry. Our results are based on an incentivized credit card campaign run by a commercial bank in which employees were paid a piece-rate if they sold a credit card to a customer. Later in the campaign, the head office started to provide daily performance reports for all branches of the bank. The campaign ultimately resulted in a significant 12.5% increase in the average daily productivity of branch staff and productivity changes found were heterogeneous across different branches.

Suggested Citation

  • Selay Sahan & Euan Phimister, 2022. "Worker Incentives in the Banking Industry," Journal of Financial Services Research, Springer;Western Finance Association, vol. 61(2), pages 259-284, April.
    • Handle: RePEc:kap:jfsres:v:61:y:2022:i:2:d:10.1007_s10693-021-00361-0
    DOI: 10.1007/s10693-021-00361-0
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    References listed on IDEAS

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    More about this item

    Keywords

    Incentives; Piece-rate; Performance disclosure; Productivity; Credit card sales; Multi-branch setting; Commercial banking;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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