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Finsec members to vote on Westpac pay system

Finsec members at Westpac will have the opportunity to vote on a proposed new competency based pay system in paid union meetings that will run from 19 to 30 May. This will be an indicative vote to gauge support for the proposal to move from a performance based pay system to a competency pay system.

For the past nine months Westpac Finsec Union Council representatives have been meeting with Westpac to develop a competency based pay system. Members agreed at collective agreement negotiations last year to move away from a performance pay system to a competency one.

Westpac Union Council Chairperson Maxine Mullen said “Finsec members have worked hard to get rid of performance pay in the bank. It has taken us some time, but each year we have kept chipping away at it. Members should feel proud of what they have achieved so far”.

Finsec members providing input into Westpac pay system

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Union delegates from Westpac branches in Auckland, Wellington and Christchurch held meetings this week to give direct input into the proposed new pay system. Members discussed the competencies staff would be assessed on under the new system.

Michael Wood, National Organiser for Westpac, said that the meetings went well and provided lots of information that will be used to improve the model. Union Councillors working with Finsec on the pay system would be taking all issues identified by delegates to the bank.

“Delegates have made it very clear that they want a pay system that is simple, applicable to the job and as objective as possible,” said Michael.

Finsec delegates in Call Centres and Operation will also be meeting to discuss the new pay system over the next few weeks. The final competency based pay model will be taken out to all Finsec members to vote on in May.  

New pay system moving forward at Westpac

 The Better Banks campaign objective of fairer pay systems in the sector is a step closer with ongoing developments at Westpac.

 The Finsec Union Council met with Westpac in January to discuss union input into the development of a new competency pay system to replace the current performance based system. Finsec members on the Westpac Union Council will work with Westpac to develop assessments within their areas of expertise. An overarching group with union and bank management representation will oversee the whole process. 

Westpac Union Council Chair Maxine Mullen said the changes represented a real win for union campaigning. “Westpac has agreed to make changes to key aspects of the proposed new competency pay model because of the pressure that union members have built up. We are keeping our negotiated pay increase, our increase on promotion and we retain the same number of salary steps and current maximum competent salary.” 

Maxine said that these wins now need to be spread across the whole finance sector.

The other side of target bonuses

targetsThe recently released proposed new sales targets at BNZ have one aspect that has not attracted much discussion so far, and it is probably because it is so normal that we take it for granted.   So let’s take a second look.   Why do the bonus payments go so high? – up to 400%.Let’s take a look at sales targets for Banking Advisers for example.   A BNZ Banking Adviser at 100% of her or his salary earns $47,743 before getting any incentive payments.

But it is possible for her or him to earn a further $28,000 in incentive payments if she or he sells 400% of their target.

$28,000 on top of your salary sounds fairly good.   Good that is until you realise that the bank has just got the equivalent of four people’s sales done by paying just over 1.5 salaries; a saving to the bank of $115,000 if you follow our logic.

A Banking Advisor who ‘merely’ does the sales work of two people saves the bank nearly $36,000.

Finsec believes the BNZ’s strategy to increase profits at the moment is working because workers do not realise how much free work they are doing for the bank.   Currently many do a second, third or fourth person’s sales job at a fraction of the cost that it could cost the bank to hire new staff.We all know targets keep increasing to drive greater sales and profit for the bank.   When you add increasing targets to decreasing staff levels over recent years you create extra workload. Targets are placing significant pressure on staff to sell more and more products in an increasingly competitive and tight market.

(thanks to chadmill for the photo)

BNZ base pay rates lag behind the industry

Reaching upThe BNZ has a very different pay

system to the other banks. BNZ staff can move to 100% quickly where as other banks have a service component to their pay systems which means their salary gradually moves up over time. However the benefit of moving to 100% quickly is eroded over time as staff in ANZ National and Westpac can usually move to a higher 100% mark.

That is why Finsec is seeking is to introduce a new service step after 5 years that staff automatically move up to. This step will align the top of the BNZ scale with the best pay in the industry and also encourage and recognise service with the bank.

For example when a Banking Advisor at BNZ reaches 100% of his or her base salary he or she is on $47,743. A comparative role, such as a Banking Consultant 2 at National Bank gets $56,262 and a Home Loans Specialist at Westpac gets $58,500.

In banking operations back office roles it’s a similar story. Someone working in a credit cards role at BNZ can expect $42,282 at 100% of their salary range. By comparison a Discharge Officer at ANZ National would be on $57,620 at the their salary band and a similar role at Westpac gets $58,000.

(thanks to confusedvision for the photo)

Finsec calls on BNZ to take the pressure off housing market

House on the hillBNZ’s proposed new sales targets for Banking Advisors threaten to increase New Zealand’s overseas debt and destabilise the housing market, according to Finsec.

“The proposed targets force BNZ staff to increase the volume of home lending at the expense of the New Zealand economy and New Zealand customers who do not need more debt,” said Finsec Campaigns Director Andrew Campbell.

“BNZ’s proposed new sales targets mean a customer from New Lynn, Lower Hutt or Riccarton going to see their Banking Advisor will be facing someone who is under pressure to sell the equivalent of $11 million worth of house mortgages to meet their performance targets,” said Campbell.

Banking advisors in these branches and others need to get 9,030 points next year to reach their target. In the past 12 months they got up to 16 points for each $10,000 of variable housing loans they sold. Next year they will only get 8 points, which means it is likely a higher volume of sales will be required resulting in more pressure on staff and customers.

In the last financial year the average operating income earned per employee increased 17% to $353,000 per year.

“A customer who walks into a BNZ branch will be meeting staff who will be under pressure from their employer to encourage them into home lending and debt. The economic effect of such large growth in consumer debt can be increasingly unaffordable houses.”

“BNZ workers and customers both want the same thing – to focus on customer service not targets and debt.”

(thanks to nzphotopro1 for the photo)

Skills-based pay at Westpac

Lyn Thickpenny, Westpac Ngaruawahia Finsec members at Westpac have made many positive changes to the pay system over the years, including:

  • 2000 – Won a guarantee to reach 100% of the pay scale after 8 years of service. Previously, it took an average of over thirty years!
  • 2002 – Won an across the board increase or a lump sum payment above the cost of living for everyone for the first time in seven years.
  • 2004 – Won a ‘negotiated’ pay increase that applies to the salary ranges as a part of negotiations every time.
  • 2006 – Westpac agreed to salary progression steps for each year up to five years of service, including a step linked to training at six months (the first time we had a step in the Agreement not linked to targets). The guarantee of reaching 100% is reduced to five years.

However, despite major wins and improvements to the pay system it is still fundamentally based on meeting targets.

But, after a strong campaign by Finsec members and a growth in membership leading up to negotiations this year, the bank agreed to move away from target based pay to skills based pay based on “the employee’s development of skills, proficiencies and behaviours in key areas”.

Westpac is currently working on what skills will be measured, and how they will be measured. It’s going to present Finsec with a proposed new system in a month’s time. Then Finsec members will begin considering the new system. They will collectively identify what, if any changes they would like to see to it. Finsec members will ultimately vote on whether or not they want to accept the new pay system.

In preparation for this Finsec delegates meet around the country this week to identify what they would like to see in a new skills based pay system and what they and other Finsec members will need to influence the outcome early on in the process. We’ll be keeping you posted on developments as they occur.


Category: Advisor

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