Barclays banking chain has faced its fair share of problems in the past year. Only a few months ago, customer trust in the group was shaken to the core by the interest fixing Libor scandal, which led to the replacement of chief executive Bob Diamond by retail banker Antony Jenkins and cost Barclays around £290 million in charges and penalties.
As a result, the new chief executive has announced his intentions to “rebuild trust” in Barclays by “putting customers at the centre of everything we do.” With fierce competition from rival banking chains such as HSBC and Halifax, as well as a growing popularity in retail banking groups such as the Co-Operative and Marks & Spencer, it seems that Barclays faces an uphill struggle to keep its customers happy, thus preventing them from switching their allegiance.
One method of building trust which has proven popular is to grant staff bonuses based purely on performance, thereby giving staff in branches a goal to work towards. From now on, Barclays’ branch staff will be rewarded for the level and quality of customer service they provide, rather than the sale of high profit products.
Currently, frontline staff bonuses are based on a combination of sales made and customer satisfaction ratings. The new bonus structure will come into effect on December 1st of this year, and will directly affect around 20,000 members of branch and call centre staff.
However, it is not only Barclays which has been forced to alter payment methods for staff, as the Financial Services Authority has made the decision to ban sales commission for banking staff from next year. This, the City watchdog claims, is to prevent a rise in mis-selling scandals, such as the recent Payment Protection Insurance scandal which is currently costing the banking sector in excess of one billion pounds due to compensation claims by irate customers.
Barclays’ announcement regarding staff bonuses is one which has been enthusiastically welcomed by consumer watchdogs. They believe that less focus on sales, and more on giving customers the best possible advice and service, will allow the banking sector to rebuild trust with the public once more.
Chief executive of Which?, Peter Vicary-Smith, says; “This is a great move by Barclays and meets one of our demands, that banks must put service over sales.
“Introducing a bonus scheme that rewards customer service is good news, and we would like to see all banks and building societies doing the same.
“Consumers have been let down by banks for too long.”
Barclays’ bonus structure reforms come just a few days after the Co-Operative Bank announced it, too, would be altering its bonus scheme to encourage more emphasis on customer service. Staff at top performing branches will be eligible for a bonus of up to £400 per person per annum, with mystery shoppers, questionnaires and independent evaluators determining which branches offer the best experience for customers of the popular chain.
Do you think the alteration in Barclays’ bonus scheme will encourage staff to put more effort into ensuring customers visiting their branches get a better level of service than encouraged previously? Do you believe that the banking sector in general needs to focus more on their customers and less on their annual profits?
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I’m glad some companies still reward their staff for their loyatly and hard work. Nice one Barclay’s, but are they doing it for the wrong reasons i.e. the recent bad press!!??
Interesting point Scott, it could well be. Or they could simply love their staff. I guess we will never know 🙂