This basis of a simple rhyme, telling shareholders

This is one of the most dangerous dynamics to trouble a
financial institution. This paper is about the sales fraud infamy facing
financial services firm Wells Fargo in the U.S. and the failure of its senior
leadership team to ban the scandal in spite of several years of repeated

As early as 2010, Wells Fargo imposed extremely pushy and
forceful sales goals on its employees. Specifically, they were told to sell at
least eight accounts to each client, contrasted with an average of three
accounts ten years earlier. Wells Fargo CEO, John Stumpf, explained this goal
on the basis of a simple rhyme, telling shareholders in the bank’s 2010 annual
report: “I’m often asked why we set a cross-sell goal of eight. The answer is,
it rhymed with ‘great’. Perhaps our new cheer should be: ‘Let’s go again, for

These goals appeared large when supervisors threatened
salespeople who failed to meet their goal. One former employee interviewed by
CNN reported, “I had managers in my face yelling at me” and that “the sales
pressure from management was unbearable.”

Large scale unethical sales practices often begin with minor
ethical agreements:

A bank account manager, under stress to make a
sales goal, pushes a customer to add a credit card.

Still short of the goal, the account manager
asks his/her friends and family to open accounts.

With the goal still not attained, the account
manager opens accounts without asking customers and transfers a small amount of

A lawsuit against Wells Fargo claimed, ” Employees who
failed to resort to illegal tactics were either demoted or fired as a result.”

According to Stumpf’s testimony, a board committee became
aware of the fraud “at a high level” back in 2011. They had a complete contention
in 2013-2014. Stumpf explained that he personally became aware in 2013, when
after two years of unsuccessful solutions within the business unit the volume
of fake accounts was still increasing. He also noted that originally, the bank
didn’t undestand customers could be charged fees for fake accounts.

A lawsuit filed against Wells Fargo also claims that
employees shared with one another the know-how used in the fraud. They used a
short and simple way to reminiscent of a video game hack: “gaming” referred to
opening accounts without permission and authorization, “sandbagging” meant postponing
customer needs, “pinning” stood for generating PINs without permission and
authorization and “bundling” involved forcing customers to open multiple
accounts over customer exceptions.

Despite five years of clear and repeated warnings, the
executive team and the board of directors were remarkably slow to see the range
of the gravity of this fraud, and to address it effectively. Wells Fargo
leaders also seem to be blind to the magnitude of this crisis, both for
consumers and its own culture.


Usually, people have a deep essential desire to be helpful,
profitable and perform more than they thought they could. But, sometime their
attempts and efforts will not be noticed and immediately affect employee’s
productivity. Finding employee’s motives are difficult and vary from individual
to individual. There are several researches about the correlation between
motivation and productivity. As the result, there are many theories that can
cause employees to work harder and be more useful. These theories classified in
two groups: Content theories and Process theories.

Content theories deal with “what” motivates people and it is
concerned with individual needs and goals. Maslow, Hertzberg and McClelland
theories are the samples of content motivation theories. On the other hand,
Process theories try to describe how behavior is energized, managed, retained
and stopped. Process theory consists of four sections: Reinforcement theory,
Expectancy theory, Equity theory, and Goal-setting theory.

The equation is quite simple:

High levels of motivation = High levels of productivity

So, what exactly can wells Fargo use to incentivize its
employees to fulfill at higher levels?

While these problems are obvious in
the daily operations, a manager should be looking into how to cure or reduce
these challenges. To reach the high level of efficiency, Wells Fargo
needs to find some solutions to increase employee’s intensives first. Making a
strategy that focuses on education, training, and the right kinds of inducements
will increase employee’s potential.