Westpac scraps pay incentives for customer-facing staff to help ease fears of product pushing

Westpac has made a big change to operations that it says will ensure customers won’t get saddled with products they don’t need.

Westpac will ditch pay incentives for a number of roles in an attempt to stamp out fears banking consumers are being pushed into unsuitable financial products.

From October 1, more than 4000 branch and customer support employees will receive fixed pay increases, instead of the bank’s variable incentive scheme.

This will guarantee the amount an employee receives on top of their annual income each year, rather than salary rewards being calculated on an individual’s performance.

Personal and telephone banking roles will be affected by the change.

Westpac acting consumer banking chief executive Richard Burton said the decision would simplify the bank’s performance and reward structure.

“Introducing a fixed pay increase and removing short term variable incentives for more than 4000 branch and customer care roles will help give our customers confidence that the service they receive is wholly focused on their banking needs,” Mr Burton said.

Westpac acting consumer banking chief executive Richard Burton says the change will simplify the bank’s performance and reward structure. Picture: NCA NewsWire/Bianca De Marchi

The country’s second largest bank in 2019 had stripped pay incentives from bank teller roles, as part of an industry wide clean-up after the Hayne royal commission.

An independent report commissioned by the Australian Banking Association in 2017 also recommended scrapping incentives from customer-facing positions, as it promoted behaviour that could lead to bad customer outcomes.

The pay changes will be implemented across Westpac, St George, Bank of Melbourne and Bank SA in October.

It is understood other major banks in Australia still use performance review scorecards and incentives to calculate pay rises for customer-facing employees.

“Westpac was the first major bank in Australia to remove product-related incentives for branch tellers in 2016 and replace all teller incentives with a fixed pay increase in 2019,” Mr Burton said.

“We are operating in a fast-changing environment and this decision will provide these employees with more certainty around their remuneration and recognise the individual service they provide to customers.”

In 2017, Commonwealth Bank abolished pay incentives for tellers, with its new pay plan rewarding staff based on customer satisfaction.

ANZ and NAB have also stopped pay incentives for a number of teller roles.