Studies of bank branch performance have. to date, concentrated on obtaining
a single perspective of efficiency. As the financial services industry has
intensified, banks have increasingly engated in a proactive, differentiate
d and customer-based strategy in retail banking in which the sales componen
t of the bank branch activity is emphasized. With the emerging sales cultur
e within banks, as discussed earlier, there is a need to evaluate both sale
s and service performance. Cook et al. [12] have proposed a model to evalua
te simultaneously the sales, service, and aggregate efficiencies of a bank
branch. This model accounted for the fact that inputs, in particular resour
ces, are often shared among these functions. In this paper, we extend the d
ata envelopment analysis additive model using goal programming concepts. We
thereby derive optimal efficiency scores while taking into account non-vol
ume related activities, that is those involving resources that cannot be as
signed to a specific input or output. Again, the proposed model derives an
optimal split of the shared resources that maximizes the aggregate efficien
cy. (C) 2001 Elsevier Science Ltd. All rights reserved.