THE MEDIATING EFFECTS OF KEY PERFORMANCE ACHIEVEMENT IN SALE FORCE RETENTION IN MALAYSIAN COMMERCIAL BANKS

Abstract

Erosion of revenue due to intense competition have forced the banks to create sales culture as a
new transformation in the banking sector. Banks are now recruiting staff with selling skills and
abilities to perform their selling activities, whose performance is measured by Key Performance
Indicator (KPI). Due to the competitive nature of the banking market and high performance
culture, highly competent sales force is accounted to deliver great sales service. This service
quality serves as a differentiated strategy to capture the market and increase bank performance.
The critical issue is the low retention rate of the sales force especially top sales force in the
banks. This paper investigates the mediating role of KPI achievement on the relationship
between leadership, teamwork and high performance culture with retention of the sales force.
Using hierarchical regression analysis, responses from self-administered questionnaires obtained
from the sales force of all Malaysian local commercial banks were analysed. The results showed
that KPI achievement fully mediated the relationship between high performance culture,
teamwork and the banks’ sales force retention. This mediation effect indicates that the sales force
perceives that having achieved their KPI is an important reason for them to retain in the same
bank.