Bank union fears pressure on employees: Performance-related pay will lead to high-pressure selling, Bifu claims

THE BANKING Insurance and Finance Union (Bifu) is to warn the Banking Ombudsman that moves to put staff on performance pay, as spearheaded by Lloyds Bank last year, will lead to growing friction with customers.

Bifu is responding to the Ombudsman's annual report published last November, which raised the problem of pressures on staff to sell insurance products, and called for separate training on banking ethics.

The union fears that the scrapping of traditional across-the-board pay deals and automatic annual rises will mean more high-pressure selling of financial products.

Lloyds Bank moved to performance-related pay for its 45,000 staff last year. Other banks thinking of doing the same include Yorkshire, Clydesdale and Co-operative.

Ed Sweeney, deputy general secretary of Bifu, said: 'Staff will be under pressure to sell, the customer will be under pressure to sign up and we face a whole new wave of customer complaints.'

A spokesman for Lloyds Bank dismissed Bifu's comments as 'a year out of date'.

The spokesman said that staff were awarded pay rises based on their ability to provide service to customers, and that 75 per cent of Lloyds' staff received rises last year. The overall average rise was 3.4 per cent.

'It's far too simplistic for Bifu to link performance-related pay to sales,' the spokesman said.

Abbey National has used performance-related pay for some time, he said, and there were many other examples in industry and commerce. Marks and Spencer pays on this basis, he added.

Bifu's warning comes as the clearing banks prepare to announce their annual results for 1993, which in turn will affect their attitude towards pay settlements. Lloyds reports in February, and all the clearers are expected to reveal big increases in profits.

The Banking Ombudsman commented on threats to ethical standards in his annual report for

1992-93: '. . . any discussion of standards would be unrealistic if it ignored the many pressures on bankers in today's competitive, commercial environment. The pressure to oversell 'insurance' products is but one example.'

The Ombudsman recommended that the Chartered Institute of Banking should include banking ethics as a separate subject in its examination programme.

Mr Sweeney said: 'Customers want impartial financial advice when they go to their bank - they don't want company products forced on them. But if the only way bank staff can get a pay rise is to meet performance targets then the pressures - and the complaints - will grow.'