Wells antes up on ‘trust’

Bank scraps old sales goals for em­ploy­ees, ties pay in­cen­tives to how cus­tomers use ac­counts

The Mercury News - - Business - By Ken Sweet

NEW YORK — Wells Fargo an­nounced a com­plete re­struc­tur­ing Tues­day of how it pays tell­ers and other bank branch em­ploy­ees, with in­cen­tives now tied to how of­ten cus­tomers use their ac­counts, as the com­pany tries to right it­self af­ter a scan­dal over its ag­gres­sive sales prac­tices.

The long-an­tic­i­pated plan has been con­sid­ered a high pri­or­ity for CEO Tim Sloan and Mary Mack, the head of Wells Fargo’s com­mu­nity bank divi­sion — both of whom took those jobs af­ter the scan­dal emerged.

Wells Fargo had al­ready an­nounced in Septem­ber that it was get­ting rid of the sales goals that led em­ploy­ees to open up to 2 mil­lion unau­tho­rized ac­counts.

Wells Fargo’s 70,000plus front-line bank em­ploy­ees will no longer be given in­cen­tives for how many new ac­counts they open or for meet­ing sales goals. They will in­stead re­ceive part of their over­all salary based on how the prod­ucts they sell are used, with one com­po­nent also based on in­de­pen­dently mea­sured cus­tomer ser­vice scores for their branch lo­ca­tions.

“Do they use the prod­ucts they have with us? Do they think of us as their pri­mary bank? Are we grow­ing cus­tomers who con­sider us their pri­mary bank? These are the met­rics we are now mea­sur­ing,” Mack told The Associated Press.

Ac­counts that are used fre­quently, such as those where cus­tomers set up di­rect de­posits or use debit cards of­ten, will be a pos­i­tive fac­tor for an em­ployee’s pay. Idle ac­counts will not, and an ac­count won’t be a fac­tor to­ward in­cen­tives un­til it’s been open three months. “Our goal here was to cre­ate a pay plan that would re­store trust with our cus­tomers, team mem­bers and the pub­lic,” Mack said.

Wells Fargo em­ploy­ees will also re­ceive more of their over­all com­pen­sa­tion as a base salary, rather than in one-time in­cen­tives and bonuses. A teller, the low­est-level po­si­tion, will have about 95 per­cent of his or her to­tal pay as a base. An­nual per­for­mance raises can still have an ef­fect, but those will be based more on how cus­tomers re­gard and use the branch. Cus­tomer sur­veys done by Gallup and mys­tery shop­pers will also pro­vide in­for­ma­tion on how em­ploy­ees per­form and how cus­tomers view their lo­cal branches.

San Fran­cisco-based Wells Fargo had also said ear­lier this month it was boost­ing its min­i­mum wage for em­ploy­ees to a range of $13.50 to $17 an hour, depend­ing on ge­og­ra­phy and ex­pe­ri­ence.

Wells Fargo pro­vided a sum­mary of the plan to the AP. But com­pen­sa­tion plans, par­tic­u­larly at large com­pa­nies like Wells, can run hun­dreds of pages long. With­out all the de­tails, it is tough to see whether the changes will make a sig­nif­i­cant im­pact, said Lisa Bar­ring­ton, a con­sul­tant in or­ga­ni­za­tional psy­chol­ogy and com­pen­sa­tion is­sues who has worked with com­pa­nies like Unit­edHealth­care and Amer­i­can Ex­press.

“By it­self, this plan is not go­ing to solve the prob­lems at Wells,” said Bar­ring­ton. “It can only be one piece of an over­haul of Wells’ cor­po­rate cul­ture.”

Mack ac­knowl­edged the bank still has work to do to re­store its im­age, say­ing the new com­pen­sa­tion plan is “an an­swer, not the an­swer.” “This is just one step to re­store trust,” she said.

The bank was fined $185 mil­lion in Septem­ber in an agree­ment with reg­u­la­tors who said bank em­ploy­ees opened the mil­lions of cus­tomer ac­counts fraud­u­lently in or­der to meet the tar­gets that called for ev­ery cus­tomer have eight prod­ucts with the bank. Fed­eral and lo­cal au­thor­i­ties al­leged

Mack Head of Wells Fargo’s com­mu­nity bank divi­sion says goal “was to cre­ate a pay plan that would re­store trust with our cus­tomers, team mem­bers and the pub­lic.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.