Variables pay, in the form of incentives or bonuses, continues to be a popular method of rewarding credit union employees.
CUNA’s 2015-2016 Staff Salary Report points out that last year 70% of credit unions with assets of $1 million or more provided bonuses and/or incentives, a measure that’s virtually unchanged since the previous year’s report.
The most common form of variable pay is the bonus: Nearly 60% of credit unions provided bonuses to management and/or non-management employees.
Properly rewarding employees likely means you’ve set attainable performance goals for your organization, for branch teams, and for individual staff.
On the flipside, setting goals that aren’t attainable can actually hurt your credit union and frustrate employees. This increases the chances of turnover, says Denny Graham, president/CEO of FI Strategies Inc.
The good news, Graham says, is most credit unions are on board with goal setting.
Goals look good on paper, but the process can fall apart in a number of ways. “How to set goals, how to make them realistic, and how to hold employees accountable are the biggest issues managers struggle with,” he says.
Some tips to improve the process:
• Develop clear policies and procedures to guide you on ways to handle employees who fail to achieve goals. Determine whether failures are because the employee lacked certain skills or because the goal you set was unrealistic.
• Avoid across-the-board goal setting. “It promotes job dissatisfaction and turnover,” adds Jayne Hitman, business development manager with CUNA’s Creating Member Loyalty program. You should focus on the individuals, she emphasizes.
For those who don’t know where to start, our experts in this issue advise looking to your strategic plan.
Hilary Reed, the CUNA Marketing & Business Development Council’s 2015 Marketing Professional of the Year and founder of Empower Strategic Solutions, says following the credit union’s strategic plan was her guiding marketing philosophy.
“Having goals helps everyone contribute to the greater good of the organization,” says Reed, former senior vice president, marketing and community partnerships, for Inspire Federal Credit Union, Bristol, Pa.
“And adhering to the strategic plan is one way to know if what they’re doing will ultimately grow the credit union’s bottom line.”
ANN PETERSON is editor in chief of Credit Union Magazine.