Outlook: The aggressive culture at Lloyds is a shameful indictment of banking

Outlook Champagne bonuses, Christmas cracker competitions, "Grand in your Hand" contests: welcome to the wacky world of Lloyds bank's staff incentive plans.

The carrots really do sound delightful, but wait until you see the sticks: salaries that collapse if you don't hit your targets, monitors showing in real time how well or badly you're doing, the threat of minuscule bonuses for those demoted to lower salary brackets.

This isn't the fluffy Lloyds we see in the TV ads: it's the sweaty palmed stress pit of Glengarry Glen Ross, the film that sales executives the world over quote like the Bible. Permit me to do the same, citing the words of Blake, the terrifying senior executive (who doesn't look entirely dissimilar to Lloyds chief Antonio Horta-Osorio). Blake is dispatched from head office to scare his downtrodden salesforce into selling more real estate: "We're adding a little something to this month's contest," he barks. "As you all know, first prize is a Cadillac Eldorado. Anyone want to see second prize? Second prize is a set of steak knives. Third prize is you're fired. You get the picture? You're laughing now?"

If you attempt to enter the twisted logic of Lloyds managers at the time, you can see why they embarked on those fleece-the-punter incentive schemes. Customers no longer wanted investments after being burned by the financial crisis, protection products were hugely profitable, and most people didn't have them yet. Who wouldn't want to head into a goldmine like that in a time of recession?

But Lloyds didn't just jump in, it leapt with two big, fat feet, telling its managers they had to double their customer base of "bancassurance" (insurance flogged through the retail bank) by 2015.

And to ensure this happened, it created possibly the most aggressive retail bonus strategy outside the eat-what-you-kill world of the stockbroking boiler rooms – bonus schemes in which salesmen inevitably come to view naïve and unsophisticated customers much as hungry lions gaze at the junior wildebeest.

There are, of course, rules against these types of behaviours. The regulator warned Lloyds specifically and repeatedly about creating dangerous incentives, not to mention the £1.9m it was fined for misselling savings bonds a decade ago. Those previous knuckle raps were partly why the fine was so high. Lloyds attempted to describe the scandal in terms of historic failings. But we should not be kidded. These weren't salesmen barking into breezeblock-sized mobile phones, but bank staff working right up to March 2012.

Some at the bank appeared to be placing the blame on Helen Weir, the (conveniently) now-departed head of retail banking at the group who left in 2011. Expect the board to be clawing back some of her bonus for that year. However, there might not be much left in the pot, given that she has already felt the bank's talons recoup part of her £875,000 bonus due to the PPI misselling scandal. The same goes for former chief executive Eric Daniels, who got £1.45m of deferred performance pay for the relevant 2011 year.

It is proper that Ms Weir be punished, as the board member responsible for all things retail. And that Mr Daniels carries the can as well. But I suspect these disgraceful performance contracts would have been dreamt up by those below director level and the bank appears unable to say whether those individuals have been punished, fired, or had to hand back their bonuses.

"It takes brass balls to sell real estate," the diabolical Blake declares to the staff in Glengarry Glen Ross. It shouldn't take the same physical attributes to sell critical illness cover at High Street banks. Lloyds' customers will not be happy until all of the bank's Blakes have been run out of town.