Some more light beginning to appear on why the FSA appeared to be 'comatose' (my words) at the wheel at the heart of the UK banking crisis.
A very interesting article published yesterday - 'Exposed: the banks cosy ties to watchdog' would seem to provide at least one contributing factor and what a whopper it is.
According to a whistleblower (yes another one.......and from the FSA!) financial institutions were given a formal role in determining pay, bonuses (and by definition) career prospects of the very people who were supervising them.
Apparently banks etc provided 'feedback' on staff who were supervising them which effectively disincentivised them from challenging things like, for example, their business model amongst other things.
FSA staff were even warned 'not to frighten the horses' during visits. The staff assessment form includes 'positive feedback from firms'.
Now, I don't know about you but THERE IS A BIG CONFLICT OF INTEREST HERE............we're talking regulators of the banking industry.
And why I admit that regulators still need to show respect and courtesy like any super-audit team, this is way different to having banks providing formal input to an internal FSA staff appraisal.
Talk about bending the operating culture.......a question on this whole subject was asked at the recent Commons Treasury Committee.
So the big question was where was HR in all of this? Where was the due diligent process to state the inherent risks and unintended consequences of this flagrant design flaw? Or was HR just ticking process boxes and of course chasing incompleted 'feedback' in that bustling non-value activity so reminiscent of many HR functions?
Or did they internally report the dangers apparent from this type of 360 to senior management but were over-ruled or just plainly ignored? Or did they not see this as even their remit to?
The FSA was also apparently constantly under-resourced which was another factor. So what was HR in fact doing? Maybe HR at the FSA could throw some more light on the matter?
Bizarrely there is an interesting copy of the FSA staff consultative committee minutes available on the internet from early 2008 which is quite revealing. You read it and make your own mind up.
All's I will say it is enough is to say it's exactly what's wrong with too many HR functions.........
It's bitterly disappointing as a professional in this field to see this and not only that to see the potential unintended consequences (some conspiracy theorists out there may say intended) which has had such a devastating effect.
I trust that the CIPD make a case study of this and insert into their syllabus for all as relevant learning. We certainly will be at the School once we have ascertained the 'evidence'.
Another day and another nail in the HR professional coffin......................
Comments welcome......
Comments (4)
Some FSA stats from Feb 2009 which you may find illuminating:
Total Staff: 2500
Total non-admin HR staff: 95
plus 25 admin staff and 10 contracted non-admin staff.
This gives a HR/Staff ratio of 1:25!!
So not only does our HR not do much work (preferring never-ending meetings and discussions to actual work, especially as you progress past the more useful system-focussed HR staff) such as challenging mangement on silly appraisal practices, but they also do it incredibly inefficiently.
Posted by JohnDoe | March 10, 2009 2:53 PM
Posted on March 10, 2009 14:53
My thanks to Johnny Doe who has provided some more data-based insight (another whistlebower?!).
I take it that this is reliable information and if corroborated would in fact ask some serious questions of the HR function given my earlier comments.
NJH
Posted by NJH | March 10, 2009 3:40 PM
Posted on March 10, 2009 15:40
It's not the 360 Degree Feedback itself that's dangerous here, but rather, as you point out, its use as a box ticking exercise.
The bigger issue of course is the incestous relationship between the bankers and the regulator, which was made so patently obvious in the recent news about James Crosby (here's the link: http://www.insuranceage.com/public/showPage.html?page=iage_breakingnews_story&tempPageName=839567).
Being clear on purpose, relationships and outcomes is critical if 360 Degree Feedback is going to be meaningful. But don't criticise the hammer if the workman's not up to the job!
Posted by Jo Ayoubi | March 17, 2009 9:30 AM
Posted on March 17, 2009 09:30
Hi Jo
You're right about the tool but it's only as good as what it's used for. And in that respect the HR function has to be the custodian of the 'design' and application and therefore management education of a people management tool.
The question here was how much was the HR function involved? Whatever answer is provided will be more damning than praising given the outcome.
NJH
Posted by NJH | March 17, 2009 2:39 PM
Posted on March 17, 2009 14:39