A cellphone video of a man with a wooden stick spanking each employee four times on a stage has been widely shared on Weibo, China's version of Twitter, since Sunday.
One of the hits threw a woman off balance. Some members of the audience, seated at dinner tables, can be seen turning their heads away in embarrassment.
Initial Chinese media reports suggested it was the employees' boss wielding the stick but, according to a statement
by local authorities in Changzhi, Shanxi province, the spanking was at the hands of a corporate coach during a team-building exercise organized by the bank.
It also claimed the coach shaved a man's head half bald as punishment.
The statement said the Changzhi Zhangze Rural Commercial Bank hired a corporate coaching firm from Shanghai to train its employees last Saturday on professional development.
At the event, a total of 216 bank staff were divided into 27 teams and, the bottom-ranked team -- including four men and four women -- were spanked by the corporate coach and told to reflect on their poor performance, according to the statement.
Jiang Feng, the coach with the Shanghai Hongfeng Leadership School, apologized for the stunt in a video post. "This incident also offered a great lesson to myself, that it reminds me I should improve my teaching methods," he said.
The Shanghai-based company and Jiang didn't immediately respond to a CNN request for comment, nor did the bank.
Beijing News, a state-run newspaper, reported that Jiang's two-day corporate boot camp cost the company 100,000 yuan ($15,300).
Shanxi Provincial Rural Credit Cooperatives Union, the bank's supervisory body, has removed two executives from their posts, the statement said.
The video unleashed a storm of criticism online after it was posted by attendees and picked up by Chinese state media.
Some Internet users said they had witnessed similar corporate events. Weibo user Guoxiaomiao described a session at her company where employees were forced to do planks, eat raw eggs and have their heads shaved.
"I wasn't physically punished, but I feel fear and humiliation whenever I think of that session," she said. "The bosses would just justify it all in the name of performance boosting."