Last updated 06:00, May 6 2018
STACY SQUIRES/STUFF
Big banks have ditched staff sales incentives but IAG has not.
Big banks have ditched staff sales incentives but IAG has not.
The big banks have eased the hard-sales target schemes pressuring staff into pushing products at customers, but giant insurer IAG has not, First Union said.
ASB, Westpac, ANZ and BNZ have all changed their secret internal sales incentive schemes for staff, moving away from the heavy focus they had on setting high dollar targets for selling the likes of KiwiSaver, mortgage top-ups and credit cards.
The move, following the damning Australian Sedgwick report last year, leaves banks now incentivising staff in branches and call centres on a "balanced scorecard" approach, putting less emphasis on sales targets.
FIRST Union national organiser Stephen Parry is calling for bank and insurance company staff sales targets to be banned.
However, First Union activist Stephen Parry says IAG, which owns the State, AMI and NZI insurance brands, has so far not moved to follow suit.
He called on sales targets to be banned under law, as they created a toxic culture of sales over service.
Martin Hunter, IAG New Zealand's executive general manager for strategy, people and reputation, denied IAG's scheme was similar to the schemes the banks had been moving away from.
"While the Sedgwick report focuses on retail banking in Australia, its principles provide good guidance to remunerating customer-facing employees across the wider financial services sector, which is something IAG reviews on a regular basis," Hunter said.
"IAG has for some time utilised a balanced scorecard model which includes a variety of factors."
In order to qualify for sales bonuses based on meeting targets, staff in branches and call centres had to be able to pass training and meet customer service standards.
"This includes how we treat our fellow employees and our customers," Hunter said.
"Many of our incentive programmes already measure employee performance across a range of key areas such as required employee behaviours, quality standards, financial metrics and customer net promoter scores."
But Parry said old-style dollar targets for sales featured prominently in the IAG staff incentive scheme, and so did the threat of "performance management" for those who did not hit their sales targets.
"I have seen people managed out of that business for not selling 'X' amount of value of in value of insurance premium," Parry said.
"They are still very much in the Dark Ages."
Hunter disagreed. "the value of sales made by individual team member is vastly outweighed by factors, such as the health of the company across a wide variety of areas such as profitability, risk, customer experience and how we work as a team," he said.
Parry said insurance and bank staff just wanted to be able to serve customers according to their needs, rather than be under pressure to sell them products.
"Consumers should be able to trust that their best interests come first when accessing financial services," he said.
When he investigated bank staff incentive schemes, Australian ex-banker Stephen Sedgwick found there was "not sufficient evidence of significant systemic risks of poor outcomes for customers to support an outright ban on all product-based payments in retail banking".
But he also said "some current practices carry an unacceptable risk of promoting behaviour inconsistent with the interests of customers".
This included staff incentive schemes based "directly, or solely, on sales performance".