More than half of employees in the financial sector believe people in their organisation are rewarded in a way that incentivises inappropriate behaviour, CIPD research published today has found.
The Employee outlook: Focus on rebuilding trust in the City report is seeking to place the issue of culture and trust within the sector at the centre of debate. This is ahead of the Parliamentary Commission on Banking's final report, published later this month. And it revealed "much more work" needs to be done, to rebuild trust in the City.
The report is based on a survey of more than 1,000 employees in the financial sector and found inappropriate behaviour such as excessive risk taking is being rewarded and there is a "singular-focus" on short-term financial gain.
Some 64% agree that how people are rewarded and what they are rewarded for is not clear, while 67% agree there is still too much secrecy around what senior managers earn. And 75% agree some people in their organisation are still paid excessively.
Less than half of respondents rank customers as their organisation's most important stakeholder, while a third consider shareholders to be their number one priority.
The report showed, 43% said there had been a shift in focus towards the interests of customers in the last year, 39% had seen no change in focus and one in 10 had seen the emphasis shift away from customers, in favour of profits and shareholders.
Peter Cheese, chief executive at the CIPD, said: "For too long, many of our financial institutions had been built on cultures that encouraged and rewarded excessive risk taking and singular focus on short-term financial gain.
"These cultures reflected a loss of sight of core purpose, at the expense of responsible and sustainable business success, and driven by the disproportionate influence of some parts of investment banking over a vast and important industry that also encompasses critically important retail banking support for individuals and businesses.
"It's encouraging to see the wider recognition of these failures, but this survey shows there is still much more work to be done."
It also revealed one in five banking sector employees said they have felt bullied or put under excessive pressure to behave in ways that are counter to their personal ethics or the interests of customers within the last two years.
The survey suggests the UK has a long way to go in transforming culture in the banking and financial services sector to ensure they become more focused on creating long-term value for the customer and wider society.
Cheese said: "HR has to reflect on its part in what's gone wrong in the banking sector, and step up to the crucial role we should play in understanding corporate culture, and in measuring, incentivising and promoting actions and behaviours that will make sure that we rebuild trust in the sector.
While banking has been at the centre of a lot of the debate, there have been similar failings in many other sectors. In organisations from the NHS, to the food industry and the media, we've seen similar problems.
Cheese added: "Even within banking, the headline grabbing actions of the investment banking arms of these organisations has skewed perceptions of an industry that, on the high street, is not out of kilter with the shops, offices and other businesses it operates alongside and is critical in supporting.
"In all these places we need to be pulling all the right levers to create organisational cultures in which people can speak up, innovation prospers and sustainable approaches to business are rewarded."
The Employee Outlook: Focus on rebuilding trust in the City report was based on an online survey of 1026 UK employees working in banking, brokerage and investment and insurance, conducted by YouGov for the CIPD between 26 and 30 April 2013. 495 respondents were from the banking sector, 295 from insurance and 237 from brokerage and investment.
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