Lloyds Banking Group will use performance management measures to put around 5% of its staff at risk of dismissal, according to reports.
The bank plans to overhaul how it manages the performance of its workforce, and around 5,000 people could be under consideration for redundancy. Around half of those people would lose their jobs, according to the BTU union.
The union, which is not recognised by the bank but claims to represent around 17,000 Lloyds staff, quotes “well-placed sources” who were present at an executive meeting discussing the plans.
Sharon Doherty, people and places officer at the bank, told the meeting that in high-performing organisations, around 5% of employees would typically be managed out through “structured support”.
Performance management
Performance management is broken: how can we rebuild?
However, this is not currently happening at Lloyds and the plan is “to move to that position as quickly as possible”, according to the union’s source.
Accord, which claims to represent around 21,000 staff across Lloyds and TSB, has asked the bank to clarify what is happening for employees. In a statement, it said: “We don’t recognise any system of forced ranking or arbitrary targets at LBG, and we’ve asked the Group to publicly reassure colleagues that performance management will remain fair and transparent.”.
The job losses would come as part of a broader cost-cutting scheme instigated by chief executive Charlie Nunn.
According to a report in the Financial Times, Lloyds would use its Workday HR system to monitor progress, looking at low rates of attrition among some employees and potentially discussing an exit with those who are underperforming.
In a statement, Lloyds told the FT that it was “striving to embed a high-performance culture”.
“In line with wider industry practice, we continuously look for ways to help our colleagues perform at their best.
“We know change can be uncomfortable, but we are excited about the opportunities ahead as we propel forward to achieve our growth ambitions and deliver exceptional customer experiences,” a spokesperson said.
The BTU union has urged members to contact it “as soon as there is any hint of criticism of their performance or as soon as it becomes obvious that for whatever reason it is not possible to deliver what line managers want”.
“Specifically, when members hear the words ‘structured support’ they should contact the Union immediately. You’re in the departure lounge and only this union is going to stop you being ‘yanked’ from the Bank,” it added.
The practice of “rank and yank” was made famous by General Electric chief Jack Welch in the 1980s, but had become increasingly rare.
Earlier this year, Facebook owner Meta hit the headlines for reviving the practice, announcing that it would cut around 5% of its workforce using its performance management system.
Charlotte Ashton, associate director at ESP Solicitors, part of WorkNest, said: “Lloyds have likely come to this conclusion having taken advice as to the most commercial ways of tackling a problem that they see as crucial to resolve quickly.
“Employers should not fall into the trap of thinking copying this action is an easy fix for their underperforming staff and should instead make sure they know all the options and risks before taking any decisions.”
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
HR opportunities in Accountancy, Banking, Finance and Insurance on Personnel Today
Browse more HR opportunities in Accountancy, Banking, Finance and Insurance
