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| Employee Productivity, Staff Terminal Benefits And Banks’ Performance In Sub Saharan Africa: The Team Efficiency Ratio Approach |
Anthony Nzeribe Chizue NWAUBANI PhD, FCA, ACIB, Patience Chioma ORIKARA (PhD Student)
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Abstract:
The main objective of this study is to examine the effect of employee productivity and staff terminal benefits on performance of deposit money banks in Sub Saharan Africa ( SSA). Specifically, the work determined the effect of employee productivity and staff terminal benefits on return on assets (ROA) and net interest margin (NIM) of the banks. It also assessed the relationship between the variables of interest. Secondary data on six SSA countries and twelve banks from the six countries for the period 2004 to 2016 were used. Balanced panel data multiple regression approach was employed to analyze the data. Fixed effects and Random effects models were adopted based on the results of Hausman tests. The study revealed among others that the employee productivity has positive significant effect on ROA. Staff terminal benefits exhibits negative insignificant effect on ROA and NIM while indicating negative significant correlation with employee productivity. The study concludes that though employee productivity has positive effect on profitability and efficiency of the deposit money banks in SSA, its negative significant correlation with staff terminal benefits strongly suggests that staff downsizing has negative implications for employee productivity and bank profitability and should be handled with caution and human face. It is recommended inter-alia that in view of the strong negative correlation between employee productivity and staff terminal benefits, banks should carefully weigh the strategic advantages of staff downsizing against the negative implications for productivity before embarking on the process.
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