The Fourteenth Banker Blog

April 8, 2010

Why is this acceptable?

Filed under: Running Commentary — thefourteenthbanker @ 5:11 AM

Bloomberg reports that the largest banks have miserable reputations.      As much as management may like to blame this on TARP or bad press, the truth is that satisfaction surveys have said this for years.     Customer attrition rates say it.     Despite huge production of bad assets, management has not changed its focus on production goals, short-term results, and “pay for performance” (Pay for Performance is carrots and sticks.     There is a place for it, but when the incentive plan is the primary management metric, balance has been lost and management has degenerated to carrots and sticks.    When management does that, many employees give them what they want, whether it is right or not.    The advantage for management is that they declare victory based on incentive metrics, while the business leaks out the back or large magnitude losses mount but no one is accountable)


1 Comment »

  1. I was on a recent business trip to Canada where I had a paid speaking engagement. Let’s see if we can add up all the fees:

    ATM fees (not counting the fees charged by the ATM, just by WFC): $5 each (total: $10)
    Transaction fees: $0.42
    Exchange rate charge (check in CAD deposited in WFC, actual rate – true exchange rate): $62
    Fee for depositing CAD check: $1.50

    Total $73.92

    Number of nights in Canada: 4

    And that’s why I am moving to a credit union. At least the fees go to something I own rather than something which my tax dollars bail out!

    Comment by Blake — April 8, 2010 @ 12:33 AM | Reply

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