Unless the new grading and reward structure to be announced later this year deals with the issue of progression, staff will continue to be undervalued relative to the market place. And the issue of progression will become more important with the contraction of grades into a few wider pay scales. The kind of progression that staff want can only be achieved if the bank is prepared to agree to specific timescales.
Following the recent announcement on pay, one member of staff said that he would be at 92% of the new mid-point and that it would take him another 6 years to get to 95%, the beginning of the ‘market zone’. That person has been in the same role for the past 10+ years. We have had hundreds of similar examples from members saying exactly the same thing. What kind of pay system delivers that kind of progression? One that’s broken is the simple answer. If the new pay and grading structure doesn’t deal with the issue of progression in a more structured way, it will be another wasted opportunity.
Sales Survey Results
Members will recall that we published the results of our latest sales survey recently. Some of the key results were as follows:
- 81% of respondents said that the sales culture in Lloyds had got worse.
- 74% said that they felt under pressure to justify their salary.
- 76% of staff said that they worry about not doing enough sales.
- 84% of respondents in our survey said that they were increasingly being micro-managed.
We have produced a brochure which we will be sending to MPs and key stakeholders. A copy of that brochure can be found here:
For The Few & Not The Many
The bank is going to reduce the bonus pot for 2020 and staff are going to receive lower bonuses. The ongoing PPI payment scandal and the HBOS Reading disaster, to name just two, will be cited as reasons why the bonus pot is being adjusted downwards. However, one could argue that all of the issues which will be used by the Remuneration Committee to justify the reduction in the bonus pot are decisions made by the GEC and Board. And that brings us to a fundamental inequality in the way the GPS bonus scheme operates.
Grades A and B will get a profit-sharing payment of 5%. Grades C-G will get bonuses of between 0% to 50%. In reality the extremes will be used in exceptional circumstances and we would expect the average increase to be 5% at Grade C, 10% at Grade D, 15% at Grade E, 20% at Grade F and 25% at Grade G. On target awards, which the bank says it’s removed, will still be used to drive the size of the bonus pots managers will distribute. Mr Horta-Osorio is entitled to an award of 140% of base salary and other executive directors get 100%. Last year he received a GPS bonus of £1,178,000. The year before that he got £1,323,000. On target awards for other senior executives will range from between 50 – 100%. And let’s not forget, those bonuses, which are significantly higher than for everyone else, are based on higher salaries. There are 53 senior executives in Lloyds who earn more than £1,000,000 a year and those executives are getting larger GPS bonus awards based on larger salaries. That’s not fair. A bonus of 25% would have given Mr. Horta-Osorio an award of £311,000. That’s a lottery win for most Lloyds staff.
In the same way that pension allowances for senior executive were reduced to 15%, GPS bonus payments should be reduced in the same way. The money saved should then be redistributed to staff in the lowest grades. We will be raising this issue with the Investment Association and the Work and Pensions and Treasury Select Committees in in the next few months.
In the meantime, members with any questions on this Newsletter can contact the Union’s Advice Team on 01234 262868.