A Perception Analysis of Financial and Non-Financial Performance Measurement for Banking Sector in Bangladesh: A Structural Equation Modeling Approach

This paper sheds light on perception of the bankers for organizational performance appraisal through financial and nonfinancial performance dimensions. The survey, conducted in Bangladeshi banking industry, demonstrates the association between financial and non-financial performance indicators on banking performance. Hypotheses were tested with data collected from a sample of 179 managers and senior executives of banks by using structural equation modeling (SEM) through AMOS 18.0. Results indicate that both non-financial and financial performance measures significantly affect banking performance leading to sustainable success and growth in long run. These findings were mostly consistent with the literature on the effects of financial and non-financial dimensions on organizational performance. The survey shows that the financial and non-financial measurements together have an effect on organizational performance outcomes. Bank managers should restructure the traditional financial ratio based performance measurement system in favor of a balanced and holistic system incorporating the non-financial measures.