Variables Used By The Palestinian Banks' Managers To Measure Their Banks' Performance, International Research

Abstract

This paper tries to find the variables that banks managers in Palestine use to evaluate their bank performance. We used Balanced Scorecard method developed by Kaplan and Norton (1992) which uses 4 groups of measures: Financial, customer satisfactions, innovation of product and services, and measures to judge commitment, learning, and growth of the employees. We applied these measures to Palestinian Banks using a sample representing 43% of the banks and branches in the West Bank. A questionnaire was distributed and filled by both bank managers of head office and branch. The ratio percentages and independent t-test where used. It was found that Palestinian banks use different measures than banks in other countries. Palestinian Banks use share price and net income as the most important financial measure, number of new customers for customer satisfaction, number of new products and services for innovation of product and services and number of seminars, lectures and training for judging the commitment, learning and growth of employees. The paper also tested the existence of statistical differences between foreign and local banks and between head offices and branches . The hypothesis testing results show mixed results between foreign and local banks and reject most hypothesis between head office and branch, which agrees with the agency problems and the concentration differences between head office manager and branch manager .