WELLS FARGO ACCOUNTS SCANDAL

By Feby Restu Hanny (1406534140)

Overall, this case talked about scandal where Wells Fargos employees opened
accounts without customers authorization. The employees secretly created enormous
amount of unauthorized banks and credit card accounts. Those fake accounts earned
the bank unwarranted fees and allowed the employees to boost their sales figure and
make more money. Their action hit sales target and they became receiving bonuses.
The company confirmed that they had hired thousands employees related to shady
behavior. Employees went so far, since they made phony PIN numbers and email
addresses to enroll customers in online banking services.
From that fact, we can conclude that the condition doesnt make any luck for the
company. As we have read in our book, Human Resources Management/ payroll cycle
is recurring set of business activities and related data processing operations associated
with effectively managing the employee workforce. There are 6 important tasks in
HRM:
1. recruiting new employees
2. training
3. job assignment
4. compensation (payroll)
5. evaluation of performance
6. discharge of employees.
Talking about compensating employees, is the payroll systems primary function.
Payroll system also allocates labor costs to products and departments for use in
product pricing and mix decisions. HRM system is usually the responsibility of the
director of human resources, whereas the controller manages the payroll system.
Organizational success depends on skilled and motivated employees because their
knowledge and skills affect the quality of the goods and services provided to
custimers. Employee skills and knowledge may be several times the value of a
companys tangible assets such as inventory, property, and equipment.
So, we can make a conclusion that Wells Fargo isnt an example of organizational
success, since they arent able to satisfy their customer, because what its employees
have did. Maybe their employees are too skilled and genius to did such thing and that
value maybe worth more than companys assets, but in consumption if the employees
dont have shady behavior. The truth says different. Their bad behavior only incur
losses for the company. We can say that the HRM didnt do or perform well in
recruiting/ hiring new employees, because such employees can enter the company
even wreck the system in Wells Fargo.
Employee morale is also important. Low employee morale crates financial costs
when it results in turnover. Research has found a positive correlation beteween
employee attitudes and financial performance. Applied to this case, we can see that
company which had low employee morale damaged Wellss financial performance,
the trust from customer will decrease as the effect from that scandal. Talking about the
trust, it is the hard thing to re-get once the customers were disappointed. So, Wells
Fargo should monitor employee attitudes from they were entering the company as
newcomers until they became an insiders.
Company also recommended to know and list what the threats that they have and
what controls which they must do to prevent such threats, this is similar to SWOT of
company I guess. Before identifying what threats, the company must relate those to
their activities in business. For example, update payroll master data activity, validate
time, prepare payroll, and disburse payroll. Like in disburse payroll, the threat is theft
or fraudulent distribution of paychecks. Another example, one way to mitigate the
threat of inaccurate or invalid maste data is use the various processing integrity
controls.