The way professional firms reward their staff and manage their people speaks volumes for the culture they have.
In my final blog in this series of five, I’m focusing on why cultural change matters to even the most austere of professional firms and why it is far more important than merely being compliant to please the Regulator.
In case you missed it, the Financial Conduct Authority (FCA) identified and introduced four key drivers of culture it wants to see in authorised firms.
Leadership, purpose, and governance may seem obvious, but the fourth – rewards – can appear nebulous at first sight and offers a difficult challenge for many firms to embrace.
How to reward employees presents problems for firms whose business model is built around achieving high volume sales with a commission element paid to employees who help bring in new business.
It can also be relevant to firms whose senior team members are rewarded, either financially or by way of promotion, regardless of the quality of their efforts and output.
But what about those in the engine room?
The FCA expects to see coherent, easily applied frameworks that reflect the quality of the work undertaken whether that is by a junior employee or a senior manager.
Indeed, it has been consistent in its message about non-financial misconduct and how inappropriate reward frameworks can lead to undesired behaviours.
We only need to look at the FCA’s Final Notices to see how poor behaviour reflects outcomes and how some of these are driven by the wrong reward systems and ‘people policies’.
Rewards don’t just have to be financial. They can, for example, relate to whether someone is included to work on a new project or whether they’re made to feel valued for contributing to team efforts on a regular basis.
If the firm’s performance management framework is built on metrics which counteract the human element, there will be, at some point down the line, consequences for the wider firm.
If the right people aren’t recruited in the first place with the right knowledge, skills or behaviours the firm faces a difficult task not just managing but guiding those people and embedding them into the culture of the business so they can thrive and contribute actively to the firm’s success.
It doesn’t matter whether they’re a junior employee or a leader, there needs to be consistency in the way people are led and managed.
Of specific relevance is Training & Competence, which includes how we recruit, develop, assess, and reward people (including those at the top) and is fundamental in determining how people behave.
All employees need to feel they are rewarded fairly for their contribution in an inclusive environment – that younger employees are supported through training and career progression and that senior employees are respected for the skill and knowledge they have acquired but equally encouraged to keep learning new skills and acquiring up to date knowledge.
These are all ways we can reward people and ensure they feel part of a valued team.
And you know what they say about teamwork? It’s dream work – and that should apply to everyone equally across your firm.
If you would like to leave a comment, observation, pose a question or request further information about how to embed a good culture into your business feel free to contact me.
OTHER BLOGS IN THIS SERIES
Driving cultural change – the case for culture
Driving cultural change – leadership
Driving cultural change – purpose
Driving cultural change – governance
Psychological safety – is it for real?
ABOUT THE AUTHOR
Julie Ampadu is the current chair of The Association of Professional Compliance Consultants (APCC), a member of the Reporting & Data Standards Transformation Board for the Bank of England (BoE) and Financial Conduct Authority (FCA) as a representative of the APCC and the founder of Chameleon Compliance Ltd and Business Chameleon Ltd.