Lloyds reportedly targeting thousands of staff for the sack

(Sharecast News) - Thousands of staff at Lloyds Bank reportedly face the sack under plans to get rid employees the lender deems to be underperforming.

Lloyds is targeting 3,000 people out of its 63,000 workers with around 50% potentially being axed under an overhaul of performance management led by chief executive Charlie Nunn, who took home more than £5m in pay and bonuses last year.

The new approach, which was discussed at a recent meeting of the bank's group executive committee, comes as Nunn enters the last phase of his plans to cut costs at the UK lender and diversify its sources of income, the Financial Times reported citing unnamed sources.

Nunn and other members of the committee will be reviewing data from HR software programme Workday to monitor progress, with Lloyds bosses keen to address low rates of turnover among its employees and to shed those seen to be underperforming.

Lloyds said it was "transforming" its business and "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 delivering exceptional customer experiences," it added.

The bank in January said it was shutting 136 branches as it follows the industry trend to remove face-to-face access for customers and is looking to offshore thousands of jobs to India where wages are lower.

Managers at Lloyds have already been told to start ranking staff performance, with underperformers set to be placed on "structured support" programmes where staff have to meet targets or be fired.

Head of personnel Sharon Doherty told the executive committee meeting the bank needed to see higher turnover among what it considered to be its lowest performers, the report stated, citing people familiar with the matter.

The bank is battling low turnover rates, as workers avoid leaving their jobs amid economic uncertainty. Current turnover at Lloyds is barely 5% a year compared to an average of closer to 15% historically, the report added.

Doherty added that high-performing organisations routinely reviewed the bottom 5% of their workforce with about half of those leaving, according to people with knowledge of the discussions, an approach Lloyds plans to emulate.

The practice, sometimes referred to as "rank and yank", was popularised by Jack Welch, chief executive of General Electric in the 1980s and 1990s. He advocated sacking the bottom 10% of staff every year as a way of upgrading the workforce. Critics say performance targets are often arbitrary and used to manoeuvre employees out the business, allowing firms to hire new staff on lower salaries.

Reporting by Frank Prenesti for Sharecast.com