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FIRST Union says research of bank workers shows 'startling' results regarding sales targets

Posted in Business Updated

Many bank staff are finding sales performance targets unrealistic and stress inducing, according to a new paper produced by the union representing banking workers.

In a paper titled: Women and work in the New Zealand banking industry: Targets and debt following the crisis, strategic adviser for the FIRST Union Edward Miller said many of the union's 4000 members (out of 50,000 workers in the finance and insurance industry) had relayed the "rapid increase" of performance targets in the past 5-10 years.

"They have reached a point where they are commonly considered unrealistic by staff," he said.

"The pressure on staff has become stress-inducing, as not reaching targets can result in performance management plans, disciplinary hearings, and ultimately dismissal.

"Not reaching these targets has become the primary cause of employment insecurity in the banking sector, as continuity of employment become less assured."

Yesterday the union said the big bank chief executives were making "massive salaries" on the back of a "terror regime" in operation at the banks.

Kirk Hope the chief executive of the banking industry body NZ Bankers’ Association said in response that the union’s claims "undermine the great work that frontline staff do in engaging with customers".

"Banks rate more highly than any other service industry when it comes to customer satisfaction. A Consumer NZ survey in August found overall customer satisfaction of 89% for the nine retail banks included in the survey. These high ratings are based on good front line staff working well with their customers.

"Rather than selling unwanted financial products, front line bank staff are encouraged to have conversations with customers about their individual circumstances and needs, and whether there are suitable bank products that can meet those needs.

"During the global financial crisis, banks in the UK, for example, which had heavy sales-based cultures, ended up failing and being bailed out by the taxpayer. Thousands of bank workers lost their jobs. That’s not what happened in New Zealand. Instead our strong and stable banking sector continued to support New Zealand households, and businesses and their own employees over the global financial crisis.

"Banks make a huge and ongoing contribution to the economy, spending  $6 billion every year just running their businesses here. That includes employing 26,000 people and paying businesses in New Zealand that supply goods and services to the banks," Hope said.

Miller's paper, presented at a seminar in Auckland today, examined gender inequity in the post global financial crisis banking environment.

The paper said that FIRST Union undertakes quarterly forums for its three major banks (ANZ, BNZ and Westpac) detailing the concerns of members in their branches.

Prior to the forums union organisers and delegates meet with workers to discuss issues, and a wide cross-section of these viewpoints are canvassed.

'Startling results'

"The results were startling. While there are some differences, workers’ concerns displayed a remarkable uniformity, with the main issue in all banks being the targets workers had to achieve. Respondents characterised the targets as ‘strict’ ‘unrealistic’ or ‘unachievable’. Pressure to achieve these was variously described ‘huge’, ‘150%’, and some staff noted they were doing unpaid overtime to reach targets."

Miller said that some respondents linked the stress of failure to job insecurity, with one respondent commenting ‘I’m actually concerned that I won’t have a job in Dec’.

"Stress was ‘de-motivating’ ‘demoralising’ and affected self-esteem. Some respondents also linked stress to sickness, panic attacks and depression.

"Many noted how the stress was undermining relationships – between bank staff, with management, and with customers. A worker commented that ‘Staff are being treated like machines’. Another noted that workplace morale was ‘shocking’, commenting ‘If you asked me if I had a friend here I would say “Hell no”.’ Some staff noted they hadn’t filled in identifying details for fear of information getting to management. Respondents felt they were not satisfying the customers’ interests and that selling was not ‘need-based’, noting that customers were being ‘harassed’, ‘creating a bad image’ and a feeling ‘that the bank does not care."

The paper also included results of a subsequent online survey conducted of female bank workers, to which 55 responded, although the union said more wanted to take part but were concerned about being censured by managers.

Targets unrealistic

Of those responding 84.3% said they did not feel sales targets were realistic, while only 34% said they had targets that they regularly reached.

"Respondents were also asked about whether ever they felt stress over targets. 22% responded that they ‘sometimes’ feel stress over targets, 30% ‘often’, and a remarkable 46% responded that they feel stressed over targets ‘all the time’. One respondent noted the high incidence of anti-depressant usage amongst staff," Miller said.

"A third (33.33%) of all respondents with targets said that they had been disciplined as a result of not reaching targets, with 12.96% being disciplined more than once. A further 48.15% said that while they had not been disciplined, they still felt under scrutiny over their targets. 43.4% of respondents said their employer had publicly embarrassed or demeaned workers for not reaching targets (37.74% answered ‘Yes, occasionally or sometimes’ and 5.66% ‘all the time’), and a further 22.64% said that while they hadn’t been embarrassed or demeaned they ‘had reason to believe they might’."

In his paper Miller raised the possibility that current working conditions for banking staff might have ramifications for future financial stability.

"In New Zealand wealth inequality has hardly been discussed in the context of financial instability," he said.

Growing rate of borrowing

"As a result, post-crisis financial reforms have failed to slow the rate of borrowing in New Zealand, and household-debt to income ratios are again trending upwards.

"On the back of this trend, New Zealand’s foreign owned banking system has returned to profitability, and the New Zealand industry is increasingly forming part of the low-cost solution to an Pacific-wide banking complex. Downward pressure on wages across the board fuels the expansion of that complex while imperilling financial stability.

"The majority women workforce sits at the heart of this interaction, and as this study shows, clearly feel uncomfortable with it.

"Over four-fifth of surveyed workers with targets felt they were unrealistic, the vast majority experienced some degree of stress, and a third of workers had been disciplined for failure to reach targets."

Miller said the voices of these staff were "critical" and indicated that the ability of these banks’ clientele to take on more debt is waning.

Miller's report referred to an IMF working paper produced earlier this year. He said recent stress tests concluded that the banking system could withstand shocks to either mortgage or corporate lending, but that linked and sizeable combined shocks could have a much greater impact.

'Wake-up call'

"This must serve as a wake-up call, and we propose that enhancing stability must start at the most basic level – the conditions of workers themselves.

"The voices of these workers must be seen as 'canaries in the mine' for financial stability."

Miller said that at the point that workers'' sales targets seem unrealistic and stress becomes a widespread everyday occurrence "the drive to maintain and improve profitability has clearly gone too far".

"And, now that the reliance of the Australian economy on resource exports is looking increasingly precarious we cannot rely on our Australian-owned banking system to be immune from global shocks. To avoid the next crisis, we must listen to the voices of those who would be affected by it, before it is too late."

Story was updated to include comments from the NZ Bankers' Association

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15 Comments

It would be interesting to

It would be interesting to know if these results are supported by the 92%  non union members of this sector.
On the other hand, ask anyone in any sales position if they think their new sales targets are realistic and you will always get the majority to say no to that. Which makes the question irrelevant as the answer is a foregone conclusion.
No targets leads to no sales, simple as that, and that would definitely mean that those people who are now worried about their job will be out of a job.
But banks can help themselves a lot by providing service with a capital S. 

It would be interesting to

It would be interesting to know if these results are supported by the 92%  non union members of this sector.
 
I am more than shocked that these employees, who I guess are not empowered to trade the banks' capital, are naive in the exrtreme not to realise they need to have organised, independent representation in numbers to confront the sociopathic tendencies evident at top management levels within financial conglomerates.
 
They will not get what they deserve until they up the leverage of their efforts and drop the attitudes of working class snobs. 

In reply and further to my

In reply and further to my comment yesterday; my concern is the inappropriate sales culture that is being actively fostered by our Big Banks to the detriment of their clients. And on the Macro scale this can lead to massive damage to the entire economy. The US subprime debacle for example.
The banks have a huge responsability due to their capacity to create credit/debt with few repercussions to themselves - ultimately the tax payer ends up paying for their greed.
Even the much maligned real estate industry has very strict rules regarding fairness to BOTH client (seller) and customer (buyer):

9.1 A licensee must act in the best interests of a client and act in accordance with the client’s instructions unless to do so would be contrary to law.

9.2 A licensee must not engage in any conduct that would put a client, prospective client or customer under undue or unfair pressure.

9.3 A licensee must not take advantage of a client’s, prospective client’s or customer’s inability to understand relevant documents, where such inability is reasonably apparent.

 

http://www.barfoot.co.nz/resources/PDF/Real-Esate-Agents-Act-Professional-Conduct-Client-Care-Rules.pdf

As someone who previously

As someone who previously worked in complaince/audit of an Australian bank, it is clear that these targets create a significant moral hazard.
I recall attending one meeting where a colleague was noting various audit findings to a senior executive only to be interupted and quite colorfully told that no-one was interested in red-tape or bureaucracy and ended the meeting slamming his fists on the table and bellowing 'Sales!, Sales!, Sales!'
 
 

LOL - sounds right - except

LOL - sounds right - except where I worked in London substitute  'trading profits', etc, etc.

Logicall,  if an overwhelming

Logicall,  if an overwhelming majority of one part of a workforce produce a clear trended result then that will normally pass to the rest of the, in this case I suppose 'non control' group.
I am not in this industry but know 2 folks who are (one unionised the other not) - for them there is no difference in the pressure being applied to them - it appears to me both would be alligned ot the researched result in the article.
Jake your comments are fine I suppose for people actually in SALES ROLES. The majority of people covered in the results are not in sales roles - they have had, in many cases a sales element thrust upon them complete with the attendant measures and performance imperatives. It truly has become sell anything to anyone - or else.
Providing 'service' with a financial gun to your head is not good for anyone and is not a good working environment.
Lets keep some humanity in the workplace.
 
 

Sales teams have targets and

Sales teams have targets and there is nothing unique for banks about that.
The interesting thing here is that lots of the pressure is about things that are not in the customers best interest.   ie.  Debt.   Debt is quite a toxic product.  Something many of us use usefully, but dangerous on overuse.  Both for individuals and for the nation. 
Sale of Alcohol is managed under a regime that attempts to limit its harm.   A barman who sells to an intoxicated person who then has a car accident can be in serious trouble.
Why can't we do similar with debt.
 

KH, agreed, banks are debt

KH, agreed, banks are debt pushers. The RBNZ high LVR restrictions is the first step towards limited the amount of debt pushed to the public. If there are concerns that house prices are still too high then LVR restrictions to 30% equity should be recommended afterall business loans require 50% equity.
Interest rate rises just makes New Zealanders uncompetitive on the world stage when the rest of the world has a lolly scramble with low interest rates.

debt is a toxic product,  but

debt is a toxic product,  but leverage is not....

The bthing with the barman, is the public takes the risk, in a loan arrangement is is the parties on the contractm which is why bailouts are evil.

When do the rest of us get

When do the rest of us get our 2%?
http://www.3news.co.nz/MPs-receive-2pct-pay-rise/tabid/1607/articleID/322314/Default.aspx#.Uo6MdtIW18E

(after all if we're being inflated then our moneys buying less, not more. And all of the rest of us also live in "this economic climate" etc)

As I was saying the other

As I was saying the other day, the entitlement of politicians, knows no bounds.
And this was expected. 2% on top of way, way too much, as usual.
They are getting more and more entitled every day.
The general public pays for all the sins of banking and politicising, so get used to it.
Bandits disguised as Cowboys. (They did learn it from the Yanks, naturally)
Record leverage, record theft, record borrowings, record deficits, record shenanigans, just creaming off the top.
However, all you are entitled to..is the bill,  Cowboy.
So get off yer high horse. And get back to productive work.
 

I was chatting to someone

I was chatting to someone from treasurey yesterday and when I made the comment 60 billion run up in debt was not necessarily good economic management they made the comment it is difficult to turn around government expenditure...

I just gave you a thumbs up

I just gave you a thumbs up Speckles.
It was to thank you for proving I am not mad, just very, very dissapointed in the fact that I have to blog at all about the madness prevailing.
Treasury should know, but even treasury can do nothing.
That is even more stupid that the Politicians receive a pay rise.
 They should all be demoted and kicked out and made to pay back every cent plundered.
Nuff said.
 
 
 

Just as one routinely

Just as one routinely applies:

  • one shake of salt to any article from a real estate firm (talking their book),
  • two twists for one from a bankster (hawking their book),
  • three twists for one from an economist (twerking their crystal ball),
  • and so on,

I think one should save a little sprinkle of NaCl for the all-but-irrelevant Unionista, who are desperately trying to figger out how to enrol enough down-trodden workers and extract their Dues, to keep the Union Executive in the style to which they have become accustomed.
 
The primer, for those who need one, is 'State of Fear' - Michael Crichton (currently deceased)

Swiss voters are going to the

Swiss voters are going to the polls to decide on strict new laws to limit executive pay to no more than 12 times the wage of the lowest-paid worker in the same company.
The 1:12 initiative is backed by Switzerland Young Socialists, who gathered the necessary 100,000 signatures to call a referendum.
It is the second time this year the Swiss have voted on top salaries; in March they voted overwhelmingly to curb big bonuses, and to ban golden handshakes and goodbyes.
http://www.bbc.co.uk/news/business-25048192