Westpac is removing incentive payments from the remuneration of branch and customer care employees, saying it is part of a move to strengthen its focus on customer service.
The bank announced that from October more than 4000 staff at Westpac and its subsidiaries will have current variable reward incentives replaced with a permanent fixed pay increase.
The bank started making changes to branch staff remuneration in 2016, when it replaced all product-related incentives for tellers with incentives based on customer feedback.
Last year, the bank got rid of all incentives for tellers, putting them on fixed pay.
The latest change extends that remuneration structure beyond tellers to include other branch staff, including personal bankers and telephone bankers.
Westpac acting chief executive consumer Richard Burton said in a statement: “Introducing a fixed pay increase and removing short-term variable incentives will help give our customers confidence that the service they receive is wholly focused on their needs.”
The Hayne royal commission report was highly critical of incentive payments, saying: “Incentive, bonus and commission schemes throughout the financial services industry have measured sales and profit but not compliance with the law and proper standards.”
Hayne said commissions and volume-based bonuses were a significant cause of misconduct in the industry.