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March-April 2006
Public calls for change at Westpac
A three-month dispute for Westpac ended on February 10 when 1600 Finsec members at Westpac voted to accept the bank’s offer of 5.2% pay increases for a 16-month term. The agreement also includes the ability for a number of long-serving staff to advance through the pay scale based on their experience and, importantly, agreement to develop a new pay progression system that will not be based solely on meeting targets.
The dispute was notable for being the first time that bank workers’ pay systems were openly discussed in the media and among the public. Workers in banks have been saying for a decade now that target based pay systems create undue stress and are not fair.
Many of the public however had not been aware until this point of how those pay systems were used by banks to change their staff culture and drive their profits upwards. Pressure from the public helped encourage the bank to change its stance on targets.
Finsec’s Campaigns Manager, Karen Skinner, believes that campaign now needs to move on: “Westpac’s agreement to develop a new pay system is an important platform on which Finsec’s campaign against target-based pays systems can continue. It also places pressure on BNZ change their pay system.
Westpac Union Councillor, Maxine Mullen, believes that the work that Finsec members and the public did together sent an important signal to the bank about what sort of values should be recognised in a pay system:
“For customers Westpac’s pay system has left them with an underlying suspicion that their bank wants only their money rather than their custom. Overwhelmingly staff at Westpac do work in the best interests of their customers where we can. However we are bound in a system that customers do not trust.”
Mullen and Skinner argue that banks such as Westpac and BNZ achieve higher and higher profits each year by setting themselves profit goals for the year then turning those goals into individual targets for local managers and workers. The targets often involve little input from staff as to what is realistic and desirable and increasingly do not reflect the economic environment or the needs of the customers.
Finsec has pointed out that Westpac and BNZ’s target-based pay systems are often used to mask under-staffing, by encouraging people to work harder and beyond their normal hours. It undermines teamwork and morale by creating a false incentive for colleagues to compete against each other rather than working together. Companies often argue that targetted pay allows workers be paid ‘what they are really worth’, however they can and do increase targets without agreement, because it makes them money. Once target-based pay exists and a company wants their staff to work harder for less money it is simply a matter of making the criteria for an increment or a bonus increasingly less achievable.
