Efficiency of banks and human resources

Abstract

This paper focuses on efficiency of banks and human resources. The subjects of our analysis are banks based in Slovakia. The aim of this paper is to determine the relationship between technical efficiency on one side and the number of banks’ employees and personnel expenses/number of employees on the other side. Technical efficiency scores were determined using DEA models. DEA models are quantitative models used to express the relative efficiency score. They are based on linear programming transforming multiple inputs into multiple outputs. Banks can be divided into groups according to their number of employees. Medium-sized banks reached higher arithmetic average of the efficiency scores than large banks. Banks with above-average personnel expenses/ number of employees reached higher arithmetic average of the efficiency scores than thebanks with below-average personnel expenses/ number of employees. Based on the Tobit regression, especially interesting is the positive effect personnel expenses/ number of employees have on the efficiency score.