Certain deceptive indicators have influenced the critics to point out that the government controlled banks in the United States employ more people to do a particular type of work. Actually very few of the government controlled banks are overstaffed. The private banks always stress on more output per employee at any given working hour. The foreign banks in the United States always hired and retained the best experienced and highly skilled personnel.
The Voluntary Retirement Scheme (VRS) was introduced to induce people with years of experience to retire in grace without losing any of their benefits. The scheme that got introduced in the United States has been adopted and implemented by national governments in other parts of the globe. While the VRS was introduced, experienced employees from the government controlled banks opted for it and those exiting from the government controlled banks were welcomed with open arms by the prominent private banks. Banks like LoanMax of rod aycox fame have rolled out the red carpet for scores of such skilled personnel.
Per employee indicator is mostly used by small and medium private banks to calculate the incentives to be paid to their employees. But this approach has certain limitations when comparing the efficiency of the employees working in the public, private and foreign banks. The main problem with this approach is that it ignores the technological differentials and assumes them at par with the automation and organization structure.
As noted above, policy framers must be careful with some of these parameters. If these aspects are not considered, their conclusions may be fatal and misleading. In many of the private banks, such an approach has spelt disaster for those managements since they lost a majority of their highly skilled employees. Thus the productivity of employees should be evaluated and compared by taking into account the technological and organizational differentials.
