This year will see the enforcement of the EU’s clampdown on bankers’ bonuses, which requires banks to restrict bonuses to 100% of salary. This has already had a major impact on the market with the likes of HSBC and Goldman Sachs finding ways to circumvent the cap entirely by offering shares and other non-salary rewards.
All of this comes after a tough couple of years for the banks with mis-selling scandals, market rigging and embarrassing IT glitches. So how can banks make sure they legally offer bonuses that produce results and motivate employees?
Sales are critical to the long-term visibility of any business, essential in driving growth and securing future investments. In order to motivate and encourage sales teams to consistently reach and even exceed their targets, to sell in line with company objectives and in compliance with regulators, many organisations offer variable compensation plans to reward and incentivise workers.
However, compensation plans can drive the opposite behaviour when they aren’t written well. Rather than motivating salespeople to sell in the best interests of the business and its customers, they can actually encourage salespeople to engage in unethical sales behaviour.