The bank’s pre-tax profits are expected to plummet when it announces its results on Thursday. At the same time, it’s expected to take a further full-year hit of £2.5 billion for the PPI mis-selling scandal. Hopefully that will be the last of the PPI provisions which have plagued Lloyds for the last 9 years. It takes a special kind of person to set aside just £3.2 billion for PPI claims, sit by whilst that balloons to £23 billion and then claim it as some kind of victory. But then again, the Group Chief Executive is a “Charismatic Winner” according to Mr. Stuart Sinclair. Unsurprisingly it will be Lloyds staff who end up paying, with bonuses under the Group Performance Share scheme set to be reduced for a string of conduct risk issues including PPI.
Whilst staff in grades A + B will get at least 5%, for everyone else line managers will be responsible for allocating awards. It is bonus payments this year but line managers will be making individual pay awards next year, within agreed parameters. When the bank announces its results on Thursday it will say how much the Group Performance Share pool is worth. Last year the pool was worth £464.5 million and the year before that it was worth £414.7 million. There will a lot of noise about the Group Balanced Scorecard Modifier and the Group Funding Modifier but members should focus on their bonuses relative to the ‘On Target’ awards. The bank says that ‘On-Target’ awards have been removed but they haven’t. They are still used by the bank to determine how much line managers have to spend. The table below sets out the ‘On-Target’ bonus awards for 2020:
What’s It Worth?
If you are a grade E member of staff and your line manager has allocated you a bonus of just 10%, when the ‘On-target’ award is 15% (before any modifier is applied), then one or more of your colleagues will have been allocated more than 15%. Members who are allocated a bonus award less than the ‘On-target’ award for their grade need to consider if that award is justified taking into account their overall performance, performance relative to their peers, the performance ‘check ins’ and any feedback they have received throughout the year. If their bonus award is not justified then members should consider using the appeals mechanism and grievance procedure.
Show Me The Rationale
When deciding what award to give line managers are required to produce a rationale. According to the bank: “The rationale should explain the proposed GPS 2019 award including factors you have taken into consideration and any adjustments for policy reasons”.
That rationale is an important document and we would expect line mangers to share it with staff when discussing GPS 2019 bonus awards. We will refer to that rationale in more detail in our next Newsletter when we will provide further guidance following the announcement of the bonus pool later this week.
In the meantime, members with any questions on this Newsletter can contact the Union’s Advice Team on 01234 262868.