Productivity Through Effectiveness and Efficiency in the Banking Industry

Raising the competition of the modern world exposes service organizations such as banks to seek the options which either increasing the productivity and efficiency or reducing the costs, in other words optimizing the operations enhancement. In this study the definition of productivity, efficiency, and effectiveness will be reviewed and the necessity of paying attention to both side of productivity (i.e. effectiveness and efficiency) will be stressed. It is followed by interpreting of the accurate position of banks’ productivity in matrix effectiveness–efficiency .The paper finds that literature suggests to banks’ managers and policy makers to evaluate their productivity and also their productivity's position accurately based on effectiveness and efficiency.