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Finance and Credit
 

Building an optimal system of personnel incentives and remuneration in a commercial bank

Vol. 22, Iss. 11, MARCH 2016

PDF  Article PDF Version

Received: 1 February 2016

Accepted: 17 February 2016

Available online: 27 March 2016

Subject Heading: Banking

JEL Classification: С61, G21, М12

Pages: 2-14

Myasnikova O.Yu. Peoples' Friendship University of Russia, Moscow, Russian Federation
myasnikova_oyu@pfur.ru

Sopilko N.Yu. Peoples' Friendship University of Russia, Moscow, Russian Federation
sopilko_nyu@pfur.ru

Importance The decreasing significance of human resources in the banking sphere leads to the outflow of skilled personnel, turnover, and a slump in demand for banking services. Therefore, it is crucial to improve incentive schemes for employees.
     Objectives The purpose of the study is to develop an integrated management approach to the system of employee remuneration and motivation in commercial banks to improve their performance.
     Methods The study draws upon methods of factor analysis and economic and mathematical modeling.
     Results The analysis identified problems related to human resource involvement in a commercial bank. We propose a comprehensive motivational synchronization of the income level of employees of general professions, which establishes a single salary category for each position subject to regional coefficients in different branches. The findings prove that a sound policy of paying the constant component of compensation enables to minimize labor expenses and serves as an extra incentive for employees to enhance their proficiency. Our economic and mathematical model helps improve the incentives system and reflects the ability to adjust to changing conditions of the financial and labor market.
     Conclusions and Relevance The study reviews possibilities to increase the performance of bank employees and offers an integrated concept of improving the system of incentives and remuneration based on employee qualification.

Keywords: human resources, human resource management, incentives, remuneration, commercial bank

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