The Controllability Principle as Applied by Indigenous Ghanaian Banks in Branch Managerial Performance Measurement

Abstract

The increasing expansion and decentralization of most organizations around the world has brought to the fore issues with regards to measuring the economic performance of the branch and the managerial performance. Following this pattern, Ghanaian banks have seen a dramatic increase in branch expansion. The literature on performance measurement requires that branch economic performance is distinguished from branch managerial performance.  As such branch managerial performance should include only factors that are within the control of the branch managers.  The study used the survey method in examining if Ghanaian banks are employing the controllability principle in evaluating the performance of the branch heads.  Statistical tools such as mean, variances and standard deviations, ranks, tables and graphs are used to analyze responses obtained in arriving at the study’s findings.  The study findings suggest the wide spread disregard for the controllability principle when evaluating the performance of the branch heads.  Some banks though minority allocate to branches corporate head office overhead cost for the purpose of evaluating the performance of the branch manager.  Branch heads have very little influence on the performance targets imposed on them.

Keywords: Division, controllability principle, performance measurement, Ghanaian Banks.