News

This is exactly the kind of behaviour we are saying must stop in our message on Sales vs Advice in the Banking and Insurance sectors.

UNI affiliate UNITE comments below on the appalling staff appraisal system used by HSBC to attempt to get staff to ‘perform’. UNI Finance Global Union recommends reading the article from the Financial Times as attached below.

Bank where 10 per cent of staff are bound to fail



HSBC has been accused of basing its appraisal system on “an outdated ideology”

Patrick Hosking Financial Editor – Financial Times.

Last updated June 2 2011 12:01AM



It’s been likened to going to the dentist. The annual staff appraisal is met with groans by employees and managers, who fear that the ritual can bring higher pay and promotion for those who get it right but reprimands and even the sack for those deemed below par.



But there is an element to the appraisal in some big companies that makes the process even more anxiety-inducing according to its critics — quotas. Some companies decree that a pre-determined proportion of their employees will automatically fail, regardless of their performance.



Anger over the process spilt into the open last week when an employee representative at HSBC, Britain’s second biggest company, used the annual shareholders’ meeting to vent his frustration. HSBC has a self-imposed target of automatically awarding “underperformer” grades to 10 per cent of its employees — a system that means 29,600 staff worldwide are so labelled each year, including 6,000 in Britain.



David Uren, an HSBC employee and Unite representative, accused Stuart Gulliver, the bank’s new chief executive, of basing the appraisal system on “an outdated ideology” and urged the board to reform the process.



“This is an area where [HSBC] is getting things wrong,” he told the entire board assembled in London’s Barbican Centre. Suggesting that the approach was hitting morale, he pointed out how the bank’s own score for employee engagement worsened from 71 per cent in 2009 to 68 per cent last year.



Staff deemed to be underperforming miss out on pay rises and bonuses worth thousands of pounds even for modestly paid branch and call-centre workers. They are also more likely to be targeted for redundancy — a particular concern for HSBC employees after the bank announced a $2.5 billion to $3.5 billion (£1.5 billion to £1.8 billion) cost-cutting programme last month.



Most British banks have similar systems and 8 per cent of all employers use quotas of some sort to appraise staff, according to a 2005 study by the Chartered Institute of Personnel and Development. Among manufacturers the proportion was 12 per cent.



At the heart of the dispute is the so-called “forced distribution” technique, whereby HSBC instructs managers to put a certain proportion of employees in each grade. One in ten must be deemed to be failing.



Forced distribution has its adherents because it obliges managers to distinguish between different employees and cuts out a tendency of line managers to be over-lenient to poor performers.



“It stops managers seeing all their ducks as swans,” said Mike Emmott, an adviser at the CIPD. But it can also lead to staff being crowbarred into the wrong category and to employees feeling unfairly treated. For an employee on average pay of £22,000, the difference between being scored three and being scored four can be the forfeiture of a bonus worth £3,300 or more. Staff call the bottom grade “carparking” — a joke that describes how unwanted employees are tapped on the shoulder in the company car park and advised not to bother returning to work the next day. At the annual meeting, Mr Gulliver acknowledged that the system wasn’t perfect. “We have to look at whether there’s a different way of doing this,” he said.



But he added: “It’s very difficult in a large population to come up with a system that’s going to be better. It may be the least worst system.”



That view is challenged by Unite, which represents 130,000 staff in the banking industry. According to its national officer Dave Fleming, the 10 per cent failure rate doesn’t make sense. “I refuse to accept that with sophisticated recruitment techniques you have that level of failure,” he said.

END

Tell us what you think? Does your bank have a similar problem? Write your comments on the blog www.bankonrights.org