The effect of performance management on the organizational results of a bank

Abstract

PurposeThis paper aims to identify the impact and workings of a new performance management system in a branch of a national bank.Design/methodology/approachPerformance data of the branch, before and after introducing a new performance management system, were collected and the results of actions taken by managers in the commercial divisions of this bank, to improve performance management, and the results of their responsibility areas were observed.FindingsThe striking issue in this case study is the different effects the introduction of the new performance management system had in the two commercial divisions of the bank branch. However, only the Private Clients division improved its results significantly while those of the Business Clients division only improved slightly. After analysis, it turned out that this difference was due to the way the new system was used. The divisional manager of the Business Clients division paid virtually no attention to the behavioural factors of importance to the successful implementation of performance management, with detrimental effects.Research limitations/implicationsThe main limitation is that the research concerns a case study in which only one fairly small organisation has been the subject of investigation. Whether the same effects of performance management can be found in other, bigger organisations remains to be studied.Practical implicationsDuring the implementation of a performance management system an organisation has to expressly pay attention to fostering and improving the behavioural factors of performance management, in order to increase the chance if a successfully implemented and used system.Originality/valueThis article describes the results of a study that explored the impact and working of a new performance management system in a branch of a bank, and thereby sheds light on the important role behavioural factors play in the successful implementation and use of performance management.