Were poor performance management processes responsible for mis-selling scandals?

Poorly executed performance management processes risk pressuring sales teams in the financial services sector into further mis-selling, according to new guidance released by the Financial Conduct Authority (FCA).

The FCA guidance found that aggressive organisational and departmental targets create a cascade of pressure throughout firms. Middle managers, finding themselves responsible for achieving overwhelming targets, transferred that pressure to their teams, resulting in rule breaking and poor customer outcomes.

The new guidance, which is available here, recognises that, done well, performance management processes have a key role to play in addressing the cultures and behaviours that bred mis-selling. But organisations need to be sure their rewards systems and policies are aligned with the new guidance from regulators.

This move comes hot on the heels the FCA's rules on the new Senior Managers and Certification Regime, which places responsibility and accountability for compliance, behaviour and culture squarely in the hands of individual senior leaders within the banks.

Systems, including supervision, appraisals, training and compliance, and performance management processes, will need to be significantly different as a result to deliver the expected cultural changes and improvements in standards. It's anticipated that, for many firms, this will require specialist support in business transformation, project management, employee communications, training and, naturally, performance management process design.

If your organisation needs help in any of these areas please get in touch.  Working with our partners, Avora Creative, http://base8creative.com/, we can also create digitally enabled communications and training that facilitate good regulatory practices and provide the analytics that will enable you to demonstrate this to regulators.

Click here to download Change Associates' performance management white paper. It identifies six reasons why performance management fails to deliver performance improvement and gives 19 specific recommendations for organisations looking to create or refresh a performance management process.

Contact us here if we can help with your PM challenge.

 

Last updated: 27 Apr 2017