HSBC scraps sales target bonuses

HSBC has become the latest bank to scrap staff bonuses linked to sales targets in a move affecting 20,000 employees.

The bank said that the new structure has affected staff at HSBC as well as its other brands, First Direct and M&S Bank, and is designed to encourage them to serve customers’ best interests.

From the start of this year, no frontline staff among HSBC’s 1,200 branches, regional teams and call centres have sales incentives which could boost their pay packets and bonuses are now based on consumer satisfaction.

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Barclays abolished commission-based sales targets for frontline staff from December, following a similar announcement from the Co-operative Bank, which said staff would have to demonstrate excellent customer service to receive a reward.

The banking sector has been battling to improve its tarnished reputation following a spate of scandals. Almost £14bn has been put aside to deal with compensation claims for mis-sold payment protection insurance (PPI).

The City watchdog recently warned that it would look to introduce new rules if the industry did not clean up its act with its use of incentive schemes, which it said were driving staff to mis-sell products to receive a bonus.

Financial Services Authority (FSA) managing director Martin Wheatley, who will become chief of new watchdog the Financial Conduct Authority, previously described what had been found as “not pretty”.