Banks drive inflation through performance pay

Media Release
Finsec, the finance workers' union

Thursday 3 November 2005

For immediate release

Banks drive inflation through performance pay

Yesterday Reserve Bank Governor, Alan Bollard, made a speech warning that banks are helping to fuel inflation by heavy leading and competitive promotion of credit. Finsec, the union representing finance workers in those banks supports Dr Bollard’s concerns. It believes that the way banks use sales targets to force their workers to sell more and bigger credit packages such as home mortgages is exacerbating the problem.

“Most major banks have pay systems that compel their staff to continuously sell more and more products to customers.” Said Finsec’s Campaign Director, Karen Skinner. “They set sales targets for their staff to meet if they are to receive the performance component of their pay. Then regularly revise those targets upwards so that more and more selling of mortgages and loans is required each year.”

“Not only is this increasing the amount of money that New Zealanders are borrowing each year, it is placing significant stress on staff to sell more and more products in an increasingly competitive and tight market.” Said Ms Skinner. “Workers across all the banks are reporting that the stress from targets and performance pay is becoming a health and safety issue. Now Dr Bollard is saying that it is also a health and safety issue for the whole coutry.”

ENDS

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