Performance Overview

Performance evaluation or measurement is to measure how well an entity is doing in relation to its strategic objectives. An entity may be manufacturing and producing tangible goods or a service entity providing services. Banking is a service industry that sells its services to its customers. Performance evaluation of a service industry is comparatively challenging as compared to manufacturing concerns. In manufacturing concerns value analysis, marketing, target market, and pricing strategies lead to product quality and sales improvement, but in the case of the services industry the service provided by the bank is perishable, services cannot be owned, it cannot be transferred and it cannot be measured and stored. Therefore performance evaluation of a service industry is necessary not only in terms of financial indicators but also very important to evaluate the performance in terms of non-financial factors of the bank. The non-financial factors include customer footfall, repeat customer business (customer loyalty), customer list, delivery channels, and time factor in the provision of services. Experts have developed methods and standards to evaluate the financial and non-financial indicators of a service entity like bank insurance companies, education institutions, health, and community welfare, etc.