Paper

Staff Incentive Schemes in Practice: Findings from a Global Survey of Microfinance Institutions

Why are staff incentive schemes important?
Download 15 pages

This paper reports the primary findings of a large-scale research project on the utilization and design of staff incentive schemes among microfinance institutions (MFIs). The paper discusses:

  • The methodology of the survey;
  • Limitations, in terms of sample selection bias, whereby the MFIs that responded were those most interested in staff incentive schemes (SIS);
  • The summary statistics of survey respondents.

The paper explores the utilization, design and perceptions about SIS. It finds that:

  • SIS are a relatively new technology that has been adopted rapidly;
  • They are more likely to be adopted by Latin American MFIs, banks, profitable MFIs and larger MFIs;
  • Lack of financial resources and technical knowledge are the primary reasons cited by respondents for not adopting a SIS;
  • The most popular type of scheme is the monetary individual scheme for credit officers;
  • SIS had a very high positive effect on performance; they had few negative effects;
  • MFI managers are not fully satisfied with their current SIS; there is strong demand for further training and action research;
  • Differences in the design of SIS between regions are greater than differences between banks and non-bank financial institutions and non-government organizations.

The paper concludes that staff incentive schemes work and should be considered by MFIs as a method to increase productivity.

About this Publication

By McKim, A., Hughart, M.
Published