Abstract
Some major corporate scandals have shown that bonuses have been put above basic client needs. As a result, organisations within the financial services sector have been advised to move away from paying bonuses. However, bonus payments are an expected part of the current remuneration package in this sector, which poses an interesting challenge for the employment relationship between employees and organisations. The present study gained employee insights into their bonuses by looking at performance and other factors. Qualitative interviews were undertaken within the financial services sector. Alternatives for bonuses and implications are discussed to manage remuneration and the employer/employee relationship.
Highlights
Introduction and BackgroundThe financial services sector has come under increasing scrutiny in recent times
Given what has happened internationally, the New Zealand Financial Markets Authority have been focusing on the levels of incentives offered to staff, and the potential behaviours this encourages
We focus on market salary insights, the importance of recognition and reward, the desire for bonus payments, the importance of transparency and measurement from management, bonus and performance and a world without a bonus before discussing the implications
Summary
Introduction and BackgroundThe financial services sector has come under increasing scrutiny in recent times. Given what has happened internationally, the New Zealand Financial Markets Authority have been focusing on the levels of incentives offered to staff, and the potential behaviours this encourages. Despite international research on incentives and bonuses in this sector (Murphy, 2013), very little is known about how customer-facing employees within this sector view their bonuses and how it interacts with day-to-day operations This is a very important area to focus on, as initial findings from a recent Royal Commission in Australia, launched in late 2017, pointed to widespread irregularities around some simple banking processes, such as verifying customers’ living expenses in loan assessments, charging fees on unauthorised accounts, (sometimes on accounts of deceased customers), and lying to regulators to achieve bonuses. Similar problems have emerged with some high-profile banks within the United States
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