After an announcement from the Financial Services Authority, incentives on staff selling additional products and services may become a thing of the past
Sales incentives can seem like a good way to motivate your staff. The standard logic is that financial motivations drive most staff members’ performance; making their remuneration dependent on performance can seem the most straightforward way of guaranteeing high levels of output. However in the wake of the Payment Protection Insurance (PPI) mis-selling scandal, the flaws in the conventional logic have become apparent. Martin Wheatley, managing director of the Financial Services Authority (FSA), has today announced at a Thomson Reuters Newsmaker event that the days of the sales incentive may be numbered.
Speaking to an audience of senior financiers, trade and consumer groups and compliance officers, Wheatley introduced an initiative to crackdown on ill-designed incentive schemes that he feels encourage staff to sell products and services to consumers regardless of need. As in the case of the PPI scheme, incentivising staff based on sales simply generates a culture where personal and institutional greed outweigh the interests of the customer. Addressing the assembled figures Wheatley remarked: “financial institutions have changed their view of consumers from someone to serve to someone to sell to.”
Incentivising staff generates short-term profit , although it can be at the expense of long-term brand value, as consumer confidence can be damaged when customer service is ranked as secondary to a sales opportunity. It seems a culture shift is on the cards and this may be a difficult adjustment to make. Fortunately help is at hand: the FSA will be playing an ongoing role in assisting firms in making the required changes.