Don’t bank on incentives

As the banks turn their back on sales incentives, Edenred’s Colin Hodgson asks what can be learned from them?

The ripples caused by the crisis in UK banking has reached the world of reward and incentives. The decision of HSBC to remove all sales incentives for its frontline staff puts it alongside Barclays and the Co-operative Bank as institutions who are attempting to put clear blue water between customer care and product sales.

Coming in the wake of the scandals around the widespread miss-selling of Payment Protection Insurance and financial products to small businesses, the news is not surprising, as the banks look to prove that they are looking after their customers’ interests, rather than chasing sales and profit.

Despite this, I think the story is still an important one for anyone who is involved in reward and incentives to reflect on. For a start it demonstrates just how potent incentives and reward can be in driving employee behaviour and getting them behind particular goals. Equally powerfully, it shows the importance of getting those goals and behaviours right, ensuring they are ethical and, importantly, that they aren’t in conflict with what is in the customer’s best interest.

Lastly, as the banks are now realising, it reminds that deploying every person in your organisation to sell isn’t necessarily the best way of increasing revenues from your customers – in fact, it may have the opposite effect.

The lesson I think we should learn from this is incentives cannot and should not just be about selling and sales. Although they will always have a place in the sales team, a sound strategic approach to incentives will look right across an organisation and look at all the factors which deliver value from customer relationships. Incentives change behaviours, which means it is imperative that the right behaviours are being targeted and rewarded like serving customers well, fixing things when they go wrong and acting on customer feedback. And because these are high stakes issues, that has to involve sensible checks and measures which ensure the business and the customers are benefitting.

The banks are showing that they are learning this lesson – I can think of many other organisations who would benefit from following their lead.

Colin Hodgson in sales director of incentives and motivation at Edenred. Twitter – @ColinWHodgson

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