Performance reviews post-sales incentives: what are banks doing now?

by Ksenia Stepanova21 Aug 2019

It’s been almost a year since the FMA and the Reserve Bank ordered New Zealand’s major banks to drop sales incentives for frontline staff, and so far, the banks have complied. But it’s a change which had to happen fast, leaving little time to come up with alternative performance review methods – an issue which, according to Kiwibank, it may take some time to resolve properly.

Toby Cooper, Kiwibank’s Head of People Experience spoke on a panel focused on performance management programmes at yesterday’s National HR Summit in Auckland, and described some of the difficulties Kiwibank encountered in the midst of last year’s tumultuous industry shift.

“We’ve certainly been making changes,” Cooper explained.

“We’ve completely removed sales-based KPIs from our performance reviews for frontline staff, and that’s a change that we had to implement pretty quickly. Those staff had KPIs around multiple factors including sales, and we combined all of those at the end to produce the final result – but since we can’t do that anymore, it might take a while to figure out how best to proceed. That’s something we’ll be figuring out over the next 6-12 months.”

ANZ scrapped its sales incentives in August of last year and trialled a ‘scorecard approach’ in 2017, which took various factors into account including customer feedback, service, product knowledge and sales. It described the removal of sales from that equation as the ‘next logical step forward’ to reflect the changing culture of the industry as a whole.

Cooper says that because it was a change enforced by the regulators, banks didn’t have the year-or-so buffer period they might otherwise have had to adjust to a new way of working. He says communicating this message to customers is also a challenge, and a lot ultimately rests on the shoulders of those same frontline staff.

“The sales incentives scrap is a change we needed to make immediately, and we had to figure out what that meant for our culture,” Cooper said. “We’re trying to encourage a culture of greater feedback, and hopefully more openness and transparency.”

“In terms of how we message that, the most important thing is the interaction that our customers have with our frontline staff every single day,” he continued.

“We’re taking a new approach to understanding what our customers experience with us, and that means a shift from focusing in customer experience to focusing on customer outcomes. We’ve changed how we get their feedback, how we understand the link between our staff and the ultimate outcome.

“We need to make sure our staff know what is expected of them and what a good outcome looks like, and make sure they really understand the situations that our customers are in.”

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