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Worker Incentives in the Banking Industry

Selay Sahan () and Euan Phimister ()
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Selay Sahan: Central Bank of the Republic of Turkey
Euan Phimister: University of Stellenbosch Business School, University of Stellenbosch

Journal of Financial Services Research, 2022, vol. 61, issue 2, No 4, 259-284

Abstract: 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.

Keywords: Incentives; Piece-rate; Performance disclosure; Productivity; Credit card sales; Multi-branch setting; Commercial banking (search for similar items in EconPapers)
JEL-codes: G21 J24 J33 M52 M54 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10693-021-00361-0

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