The Efficiency-Performance Paradox in Islamic Banking: How Target Pressure Affects Organizational Productivity


Authors

(1) * Ida Kusumawati   (Universitas Nurul Jadid, Indonesia)  
        Indonesia
(2)  Hafidatun Nabila   (Universitas Nurul Jadid, Indonesia)  
        Indonesia
(3)  Ittaqillah Haitsuma Kunta   (Universitas Nurul Jadid, Indonesia)  
        Indonesia
(4)  Moh. Mohlas   (Universitas Nurul Jadid, Indonesia)  
        Indonesia
(5)  Muhammad Durrin Ni'am   (Universitas Nurul Jadid, Indonesia)  
        Indonesia
(6)  Zackyl Musthofa   (Universitas Nurul Jadid, Indonesia)  
        Indonesia
(*) Corresponding Author

Abstract


Increasing performance expectations have created new managerial challenges in balancing organizational productivity with employee well-being in Islamic banking. This study aims to examine how target pressure influences organizational productivity through the efficiency-performance paradox and to explore the moderating role of Islamic ethical leadership. A qualitative multiple-case study was conducted with 18 informants, including branch managers, operational managers, financing officers, customer service officers, and human resource officers from three Islamic commercial banks. Data were collected through semi-structured interviews, non-participant observations, and document analysis, and analyzed using the interactive model of Miles, Huberman, and Saldaña. The findings reveal that target pressure initially improves productivity by enhancing discipline, coordination, and work focus; however, excessive performance expectations gradually reduce organizational sustainability through employee fatigue and declining collaboration. Islamic ethical leadership mitigates these adverse effects by integrating Shariah values into performance management. This study extends organizational productivity theory by integrating Islamic ethical leadership into the efficiency-performance paradox framework and recommends balanced performance systems to support sustainable Islamic banking governance.



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