Distribution of wealth to employees and financial performance: an analysis of track in brazilian banking sector
Abstract
The paper studies the relationship between personnel expenses and financial performance in the Brazilian banking sector, investigating the direct effect of the distribution of wealth per capita to employees on profitability indicators, and the indirect effect mediated by employee’s turnover and productivity. The relationship between personnel expenses and financial performance was measured using the statistical technique of path analysis, in a sample of 22 banks, from 2010 to 2018. The results indicate that personnel expenses increase the productivity of employees. However, productivity gains on financial performance have not exceeded the additional personnel expense, making this additional expense financially inefficient. The work highlights the importance of analyzing the indirect financial benefits of wealth distributed to employees, and presents a theoretical model that can be used to analyze the financial return of personnel expenses in other organizational contexts.
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