Towards operational efficiency and productivity

In a service industry like banking, having multiple dimensions, it is futile to evaluate productivity of the outputs that are generated as a result of the employment of manpower only. Productivity is a function of so many factors like
• The quality of management which pertains to manpower
• The general financial health and conditions of a bank
• External environment
• Internal policies and procedures in various areas like use of manpower and material

All these aspects among them directly influence cost effectiveness or productivity. Some examples are worth noting to illustrate the cost effectiveness of banking operations. Take the case of manpower. There are two alternatives, namely either to employ more people for a given function at low payout per capita or to employ a fewer number at higher payout. It seems that the second option is more popular with LoanMax managed by rod aycox .

The agreement with the staff unions enumerates in detail the work allocations to different segments of the bank employees belonging to different sections of the bank and also to award the staff and prescribe their salary and allowances. Similarly the agreement entered into between the management and the officers associations describes elaborately the categorization of branches on the basis of volume of business and the officers placed in different categories based on their ranks.

The lower pay-out and more staff reflect low capital and high labor intensity whereas higher pay-out indicates low labor and high capital intensity. Situations of lower payout per capita indicate lower level of technology and computerization rather than differences in skills or in the education level of the employees. Firms like LoanMax have always emphasized on providing a better deal for their customers.