Pay in financial sector still incentivises bad behaviour

Almost two thirds of workers in the financial services sector believe some people in their organisation are rewarded in a way that incentivises inappropriate behaviour, according to research by the Chartered Institute of Personnel and Development (CIPD).

The Employee outlook: Focus on rebuilding trust in the city survey, which questioned more than 1,000 employees in the financial sector, found that three in four financial services workers (eight out of ten workers in the banking sector) say they think some people in their organisations are paid excessively.

It also revealed that fewer than one in three financial sector workers outside of senior management say they are proud to work in the sector

The survey also found that less than half of respondents rank customers as their organisation’s most important stakeholder, while a third consider shareholders to be their number one priority.

While 43% said there had been a shift in focus towards the interests of customers in the last year, 39% had seen no change in focus and one in ten had seen the emphasis shift away from customers, in favour of profits and shareholders.  

Peter Cheese (pictured), chief executive at the CIPD, said: “Organisations need to re-evaluate their core purpose and the values which should define their behavioural expectations and norms.

“A key part of this is to re-consider their longer term duty to customers, shareholders and the wider stakeholders they impact, including the communities in which they work.

“Employees need to be able to understand and relate to the purpose and values at every level.”

Key research findings:

  • 75% of respondents said that some people in their organisation are still paid excessively.
  • Employees at levels below senior management are most likely to agree (79%), but even 66% of senior managers agree that some people are paid excessively.
  • Two thirds (65%) of respondents agree that some people in their organisation are still rewarded in a way that incentivises inappropriate behaviour.
  • 67% said that there is still too much secrecy around what senior managers earn.