Abstract
An efficient employee is considered as a valuable asset in any organization, but measuring employee efficiency is not an easy task. This study aims to measure and compare staff efficiency in Kuwaiti banks using the financial performance of the bank as an efficiency proxy. Return on assets (ROA) and return on equity (ROE) are set as dependent variables, and total assets per employee, cost per employee, revenue per employee, number of staff per branch, and total employees’ cost to total revenues are set as independent variables. Using panel OLS regression on the data of 10 Kuwaiti banks that are listed at Kuwait stock exchange (KSE) over the period 2010-2018, results showed that total assets per employee, cost per employee, revenue per employee all had a significant direct relationship with both ROA and ROE and only total employees’ cost to total revenues showed a significant inverse relationship with the financial performance of the banks. The number of staff per branch was the only variable that had no relation with both ROA and ROE. The model showed that the National bank of Kuwait had the most efficient employees’ when it comes to ROA, while Ahli United bank had the most efficient employees’ when ROE was used to measure staff efficiency. In both cases, ROA and ROE, Warba bank had the least efficient staff among all banks under study.
Highlights
An efficient employee is considered as a valuable asset in any organization, but measuring employee efficiency is not an easy task
Barney (1991) sees that staff productivity is measured by profitability in the form of return are a valuable asset to banks and their efficiency and productivity on assets (ROA) or return on equity (ROE) since these are the lead to the success of the banks
It can be seen that both models per branch (SPB) where it did not have any relation none so showed weak explanatory power since the adjusted R square ever with either return on assets (ROA) or ROE
Summary
An efficient employee is considered as a valuable asset in any organization, but measuring employee efficiency is not an easy task. The model showed that the National bank of Kuwait had the most efficient employees’ when it comes to ROA, while Ahli United bank had the most efficient employees’ when ROE was used to measure staff efficiency. Productivity is the process, many types of research see that bank staff are the output per unit of input employed. Barney (1991) sees that staff productivity is measured by profitability in the form of return are a valuable asset to banks and their efficiency and productivity on assets (ROA) or return on equity (ROE) since these are the lead to the success of the banks. Brinda (2013) sees that profitability ratios are the most efficiency and generate revenues and profit They become appropriate measures that can be used bank managers to assess assets to banks instead of liabilities. Mohd Sultan the inputs without compromising the quality of the products or (2008) suggested that the lack of staff efficiency in banks can services
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