Wells Fargo says it tracks 'engagement,' not 'happiness'

Well's Fargo's so-called "happy-to-grumpy" ratio is not being used to track either the happiness or the grumpiness of its employees, a spokeswoman for the lender told me today.

John Stumpf (AP Photo/Mark Lennihan)

While Wells Fargo CEO John Stumpf has referred to the ratio by that nickname, it is based off annual surveys that actually measure employee engagement and disengagement, the spokeswoman, Richele Messick, said.

"The happy-to-grumpy terminology that’s been used, it puts it into colloquial terms,” she said. “It’s (actually) a measure of engagement."

Recently, the ratio has been the focus of coverage by many news outlets ever since The Wall Street Journal mentioned it in a story last week.

According to the WSJ's story, big banks are "trying more than ever to monitor employee attitudes and values to avoid future problems" in the wake of the financial crisis, which has resulted in large fines, layoffs and losses for banks.

Regulators say they remain concerned about the culture on Wall Street years after the financial crisis.

In October, Federal Reserve Bank of New York President William Dudley said the government will have to consider breaking up large financial institutions if Wall Street doesn’t stop excessive risk-taking and breaking the law, according to another Wall Street Journal story.

Speaking at an investor conference in Florida on Tuesday, Wells Fargo's chief financial officer, John Shrewsberry, expressed skepticism that financial institutions could make quick changes to their culture to appease regulators.

"I mean, you can't turn to any group of people and say be happy and engaged," he said. "It doesn't work that way. So, I'll be curious to watch how other firms try and produce a durable, sustainable culture on a deadline."

Wells Fargo's culture, he said, has been "handed down from generation to generation. ... We celebrate it."

He said he does not know "how you come up with that in short order, which sounds like that's what ... the industry is expected to do.

"There is nothing wrong with attempting to do that. ... But I don't know how you spontaneously require tens of thousands of people firm by firm to follow in line behind what somebody says is now important if they have been behaving differently, maybe not badly but differently, prior to that."

San Francisco-based Wells Fargo determines its ratio from the results of a "team member connection" survey that Gallup administers to Wells Fargo employees each year, Messick said. The bank has conducted the survey for more than 10 years, she said.

Wells Fargo encourages its employees to take the survey, she said. Participation is voluntary, and responses are kept confidential, she said.

"The data from the survey gives Wells Fargo several different measures that help us assess our progress, as well as our areas of opportunity," she said.

Wells Fargo says the ratio in 2014 was 8:1, meaning eight engaged employees for every disengaged one. That compares with 7:1 in 2013.