Incentive schemes for bank branch staff during deep recession: empirical evidence from Greece

Abstract

Incentive schemes have been extensively used in the banking sector, though in the years following the world financial crisis a great deal of criticism has emerged, focusing mainly on their contribution to mis-selling and short-termism. This study attempts to explore the incentives field in the current Greek banking context which has been through a massive and arduous transformation in order to avoid collapsing. The questions posed refer to the purposefulness of an incentive scheme in the current Greek banking setting as well as to the design attributes of the optimal incentive scheme for such conditions. To this end, a survey of Greek bank branches' employees was undertaken (N = 227), in order to examine their exposure as well as their attitudes towards incentive schemes. The data analysis suggested that an incentive scheme could still have a position in the Greek banks, even in times of deep recession, provided that it is appropriately designed in order to enhance performance and protect against the risk of mis-selling.