Big Bank chief executives appearing before a parliamentary committee yesterday defended their staff remuneration practices and the setting of targets for referrals by branch staff.In the final day of the House of Representatives Standing Committee on Economics' review of the major banks' performance, National Australia Bank chief executive Andrew Thorburn and Westpac CEO Brian Hartzer argued it was an important part of a bank's function to initiate conversations with customers about their financial needs and it was reasonable to set targets for staff to achieve that.Hartzer told the committee: "Customers have needs and it our job to uncover them. People are often in denial or are confused. For example, we know most Australians are underinsured."We do not condone trying to sell products that people don't need."Hartzer acknowledged that branch staff had targets for referrals to financial planners, home loan and personal loan sales staff.He said the target number was an expectation based on what high performing staff members were achieving.Thorburn also defended the practice of giving branch staff referral targets. "All businesses need to be competitive and hungry and need to improve," he said."It depends how it is done. Our tellers have a balanced scorecard and each branch receives feedback from customers on the branch experience. If one of our people is not doing the right thing, we have to adjust," Thorburn saidLast month, Hartzer said Westpac would remove all product-based incentives from teller remuneration. He said the bank had also reviewed the way its rewarded specialised sales roles in its network. The bank will stop varying rewards based on different products; instead staff will be rewarded for "meeting the full range of our customers' needs."Yesterday he said similar steps had not been take at St George Bank, Bank of Melbourne or BankSA but it was his intention to make changes there as well.He said bonuses made up less than five per cent of staff pay; they were not commissions but were based on a scorecard that included service standards, growth in customer numbers and growth in the number of customers who consider the bank their main bank.Thorburn said 85 per cent of staff pay was fixed and of the 15 per cent that was incentive based, most had no product target. He said only 12 per cent of staff had direct product targets."We are looking at that through the Australian Bankers Association's review. We want to make sure the incentives are appropriate," he said.Even with the 12 per cent, they must meet a balanced scorecard, he said.