ANZ ends use of sales targets

ANZ is removing sales targets for its New Zealand bank staff.

Its managing director of retail and business banking, Antonia Watson, said a ‘‘balanced scorecard’’ approach was used to determine frontline staff incentives.

About 25 per cent of bonuses given are based on sales.

But from October, that would become zero. Instead, incentives would rely on things such as the quality of customer service and product knowledge offered.

A trial of no sales targets in the bank’s call centre had worked well, she said.

Watson said there was concern that sales targets might cause retail staff to sell products that didn’t meet customer needs.

‘‘Removing sales targets altogether will give our customers total confidence that we’re focused on doing the right thing by them,’’ she said.

‘‘The environment is clearly changing and the feedback we’re getting and what we’re seeing in Australia suggests this is the right approach, regardless of how direct or indirect our sales targets were or how minimal.’’

She said it was important all customers who had ANZ New Zealand financial products had them for the right reasons and not because any staff member felt pressured to sell them to meet any targets.

The change only applies to staff, not to mortgage brokers, investment or insurance advisers distributing the bank’s products.

Australia’s royal commission of inquiry into misconduct in the banking, superannuation and financial services sectors found widespread problems, including that 5 per cent of ANZ customers in Australia received financial advice that was unsuitable.

Banking expert Claire Matthews, of Massey University, said other banks were likely to follow ANZ’s example.

‘‘It is a response to concerns across the sector about sales incentives . . . The bank still needs to be getting an appropriate level of sales and generating the required level of profit. If they can do that without specific sales targets, it makes sense to do so.’’

First Union has been campaigning for change. Its finance sector organiser, Stephen Parry, said a toxic sales culture was rife in New Zealand banking, and he was pleased at ANZ’s major move in the right direction.

‘‘Union members at ANZ and the other major banks have for years, if not decades, been raising the issue of inappropriate sales pressure,’’ Parry said.

‘‘This pressure is about much more than whether or not a worker receives a bonus payment – it’s about a day-to-day culture where sales come first and service comes second, and where workers risk disciplinary action if they do not meet their targets.’’

He said the union had finished a round of collective bargaining negotiations with ANZ where the removal of sales targets and sales pressure was the main point of discussion.