Commbank CIO takes pay cut over Netbank outage

The Commonwealth Bank's move to replace service level agreements with customer satisfaction reports has already seen some staff - including CIO Michael Harte - accept a reduced paypacket.

In April, the CBA announced it would replace the traditional measurement of IT performance - the service level agreement - with customer feedback reports which impact employee remuneration directly.

Harte said this morning that his pay packet had directly been affected as a direct result of the outage suffered by Netbank in late June.

The admission came at a press briefing that was organised by the bank to give an update on its progress following a decision in April to invest $580m in a major IT refresh.

Nick Holdsworth, Commbank's executive general manager explained how the bank was shying away from defining traditional service level agreements (SLA) with partners, in favour of measuring customer satisfaction on a regular basis.

"SLAs tend to penalise companies from a contractual level but we are more interested in 'incentivising' individuals who are actually delivering the services to our customers," said Holdsworth.

Holdsworth said the bank preferred its staff and partners to be "focussed on what we are trying to derive as our outcomes -- so they have personal skin on the game."

According to Holdsworth, Commbank employees and workers from close partners -- such as Telstra, Accenture and SAP -- who work alongside CBA staff, are all on a scheme where a certain percentage of their pay is "at risk" if customer satisfaction levels decrease.

When asked if anybody's pay was affected by the June outage, the bank's chief information officer spoke up. 

"Yes, it affected mine and it affected a lot of people in this room," he said. "It will affect increasingly more people as we have failures in software, failures in hardware, failures in the network and failure to deliver responsive service."

Harte described the "lunatic situations" that are created by service level agreements.

"You could have a telephony availability statistic at 99.99 percent but that would still allow the carrier to lose 6,000-10,000 calls on a given morning. That amounts to a lot of disgruntled, unsatisfied customers," he said.

Holdsworth said the "at-risk" pay structure helps individuals focus on the customer instead of the technology and changed the topic of his conversations with partners from, 'I am sorry we had that problem but we still met our SLA', to, 'I'd really like to understand the impact that had on your customers and your customer satisfaction because that has a direct impact on me'.

He added that when a potential 40 percent of an employees pay depends on customers' being satisfied, that employee tends to their best to ensure the customer is kept happy.

"As an individual, it helps focus the mind on a daily basis," added Holdsworth.

What do you think? Should CIO's be asked to take a pay cut when expectations aren't met?