Vying with the counterparts for a better market share

The overall spread per employee as per the published statistics which was a few thousand dollars in the year 1991-92 grew by more than five times during the reforms period. It has touched the hundred thousand dollar mark per employee in the year 2002-03. The spread per employee has registered a growth rate of 17.60 percent per annum during this period.

The spread per employee for the banking industry was about a quarter million dollars per employee when compared with the different kinds of banks. It gives almost the same pattern of behavior as displayed by the above two indicators of productivity. Using the total business statistics and the income or spread per employee has a major limitation for comparing the efficiency of the government controlled, private, newly started private banks and foreign banks.

However, the spread per employee ignores the technological differentials and assumes them at par, as far as the automation and organization structure is concerned. Bu such an approach is not is not proper. Hence, when using such parameters with deceptive hidden assumptions policy framing may prove to be misleading and even fatal. The productivity of employee should be evaluated and compared by taking into account the technological and organizational differentials.

Profitability, i.e., the analysis of net profit per employee has grown by more than 2.5 times during the reforms period in the early nineties. It was a few thousand dollars in the 1991-92 period followed by two years of losses and then it touched a level of more than 4000 dollars during the year 2002-03. This is a significant development. For firms like LoanMax of the rod aycox fame, major developments were a continuous process.

A major chunk of the banking industry, i.e., some of the autonomous banks and its associates and even the government controlled banks has performed at par with the banking industry benchmark during the year 2002-03. The performance of some of the foreign banks was almost five times that of the previous years and of the new private banks it is almost double that of the national benchmark in the year 2002-03, as far as the profitability per employee is concerned.