Lloyds Bank has hit the press for all the wrong reasons in recent years. Historically the bank has been accused of being a serial offender when it comes to investment mis-selling; in 2013 it was rocked by a highly publicised FCA investigation that resulted in a record £28million fine, several official apologies and a solemn promise to clean up its act.
Now the bank has allegedly brought back performance targets for staff.
Unions have accused Lloyds of slowly reintroducing performance targets (or “goals”) in the guise of a new sales scheme known as Project Labrador. Members say the targets are creating a pressurised environment similar to the kind that led to an FCA investigation a mere two years ago.
The banks have clearly demonstrated that putting pressure on staff to meet sales targets increases the likelihood of investment mis-selling, and it would seem that Lloyds is once again encouraging its advisers to place revenue above the interests of its customers.
So, what does this mean for you?
Pressurised sales advisers
As a result of the investigation’s findings two years ago, not to mention the public and media outcry that ensued, Lloyds Bank was quick to act. One of the first steps it took was to scrap Project Beagle – the scheme previously in place which encouraged staff to meet sales targets in order to receive high bonuses and avoid demotion.
The FCA investigation revealed that staff at Lloyds were under so much pressure that one employee even deliberately sold financial products to himself, his wife and a fellow colleague in order to avoid demotion.
After the authority hit Lloyds with a hefty fine, the bank created a scheme focusing on “customer needs met”. Ostensibly, this seemed to place emphasis on the services provided to the client, rather than on making a sale. According to the unions, however, the reality of the situation was that nothing had changed.
In 2014 a whistle-blower, at the time working in a London branch of Lloyds Bank, said: “The bank pretends to focus on customers but in reality they only care about sales, sales and sales. They’ve increased our branch sales targets this quarter, making it more difficult to hit. They relabelled our sales targets as ‘customer needs’ but we are still encouraged to push products. In my opinion, it’s just a disguise.”
Project Labrador – Same Scheme, Different Name?
Despite being previously found guilty of promoting a ‘sell or be demoted’ culture among its workforce, Lloyds now seems to be adopting similar tactics in a bid to reignite flagging sales.
Project Labrador was introduced, according to the bank, to focus on customer service and ‘break the link between product sales and variable pay’. Yet it seems to actually have a stronger focus on sales targets than official statements suggest.
Under the terms of the new scheme, Lloyds employees must sit an exam if they miss a sales target. This remains the case in all circumstances, regardless of whether they know the product well or not.
Of course, this applies pressure on the employee, which in turn, could lead to them pushing certain products in a bid to avoid being subject to individual actions if they fail to hit the required ‘standards’.
The union claims: “Our main concern with the bank’s new approach is that the pendulum will swing back to the old style management techniques if changes are not introduced properly.”
“We’ll go back to informal peer comparison tables, individual output targets through the back door, and management by spreadsheet if that Bank’s not careful.”