Workforce Factors and Banking Performance

This paper examined the workforce factors to predict Indonesian banking performance measured by per employee metrics. Using purposive sampling, 31 banks listed on Indonesia Stock Exchange (IDX) in 2012 were utilized. Five workforce factors were employed as independent variables and banking performance as dependent variable was measured using revenue per employee and market capitalization per employee. Data needed to measure the five workforce factors as well as revenue are available in the annual reports. However, market capitalization data are available in the IDX statistics. Five hypotheses were tested using multiple regression analysis. The authors concluded on two things. Firstly, the larger the number of employees, the worsen revenue per employee and market capitalization per employee. Secondly, higher remuneration for directors and commissioners induced better performance, as measured by the two indicators. This study is limited in so far as it considers banking companies listed on IDX only and conducted for only one financial year. However, the result could give better understanding of performance and its drivers and lead to managerial practices that can improve banking performance. This study also provides relevant information to scholars, policy makers, investors, and other stakeholders as a basic reference and guide to analyze the banking performance.