Pulling Together

June 1, 2010

When all employees start pulling toward the same goals, results can be impressive.

U.S. worker productivity reached an all-time high in 2009. Even though employees have seen their incomes stagnate, job opportunities derailed, and retirements jeopardized, worker productivity year over year keeps climbing, reports the Credit Union National Association’s (CUNA) 2010-2011 Environmental Scan.

That trend intensified during the height of the recent recession, primarily because fewer workers were doing more work. From fourth-quarter 2008 to fourth-quarter 2009, productivity increased 5.8% while average weekly earnings decreased 1.6%, according to the Bureau of Labor Statistics.

But will employee productivity, engagement, and retention take a dip when the economy recovers? It’s possible, if employers don’t address some key human resources (HR) issues, says Jan Southern, relationship manager at John M. Floyd & Associates (JMFA), a CUNA strategic alliance provider.

Today’s high level of productivity could be short-lived, agrees Doug O’Neill, vice president of HR at $3.5 billion asset Bethpage (N.Y.) Federal Credit Union. “We’re seeing underemployment and getting more for less. Due to the economy, people don’t have many options and job responsibilities are increasing. If you have only a short-term plan for employee engagement, overworked staff will be the first people to leave you when the economy recovers.”

After more than two years of job losses, job creation increased during the first quarter of 2010, according to a survey by the National Association for Business Economics. Thirty-seven percent of survey respondents plan to increase employment in the next six months, up from 29% in January.

During the recession, Southern says most of her firm’s clients were in survival mode—dealing with new regulatory requirements and focusing on the “quick fix” of revenue goals during a tough economy.

“Once you get that in place, you need to move on to employee engagement and productivity—issues that often require a true culture shift,” she says.

Workforce optimization
If you’re unable to hire additional staff, she adds, you need to focus on “workforce optimization,” which means getting optimal productivity from current staff.

It’s a trendy term, says Janice Love, vice president of HR at $1.3 billion asset Sandia Laboratory Federal Credit Union, Albuquerque, N.M. If you ask five consultants or five HR professionals for a definition of workforce optimization, you’re likely to get five different answers, she adds.

The same can be said for the terms “employee engagement” and “productivity,” adds O’Neill. These terms mean different things to different people. And therein lies the key to getting the most out your credit union’s staff, he says. It starts with clear definitions of those terms and a strategic plan. Then you’re ready to share your credit union’s overall vision with your staff.

“Employees need to understand what it is you want them to do (your vision), and they need a willingness to do it,” he says. “If you have one without the other, it doesn’t work well.”

How do you measure employee engagement? A good starting point is employee satisfaction, says Love.

“I remember a meeting shortly after I came to work here five years ago where the management team was reviewing the results of the annual employee survey,” she says. “The overall employee satisfaction rating was 92%. The discussion was around what things could be done to increase the rating.

“I thought I’d been dropped into the Twilight Zone,” she continues. “I was thinking, ‘Do these people know how incredible a 92% employee satisfaction rating is?’ So many companies would be shouting from the rooftops if they had a 92% rating.

“In 2007, the rating was 93%. When I reviewed the results, I wondered if it was possible to get the rating up to 96% or 97%. Then I had a good laugh at myself because I was now one of ‘them.’ For 2008 and 2009, our employee satisfaction score was 98.5%.”

Bethpage Federal also has a strong track record on employee satisfaction, with survey ratings for 2006-2008 of about five on a scale of one to six. In 2009, the level increased to 5.09.

year over year

‘Super powerful stuff’
The credit union hopes to improve staff satisfaction and engagement further as it rolls out a new performance/talent management system this year. The credit union went through a robust request-for-proposal process, and in March it chose Halogen’s Strategic Talent Management Software solution, says O’Neill.

The new system will allow Bethpage Federal to:

• Input the top strategic credit union goals;
• Identify skills and competencies needed to achieve those goals;
• Measure existing skills and job competencies of current staff; and
• Allow staff at all levels to align individual goals to the credit union’s top strategic goals.

“At the heart, we have the capability here to align individual goals and connect them to the credit union’s objectives,” says O’Neill. “The real strategic payoff will be looking throughout the credit union for performance and skills gaps.” It forces alignment vertically throughout the credit union, he says.

Employees with specific goals can now see how their work affects the credit union’s strategic goals, he adds. “This is super powerful stuff.”
O’Neill says the talent management system:

• Aligns the work force around strategic goals;
• Garners employee buy-in as staff see how their work ties to the big picture; and
• Develops an organizational camaraderie around common goals.

Costs for these systems vary dramatically based on functionality and complexity, and change from year to year as needs change, says O’Neill. Ballpark annual costs start at about $25,000, and one-time implementation costs are approximately 50% of the annual cost.

It’s a sizable investment, acknowledges O’Neill, “but it’s impossible to reach true optimization without aligning your entire work force.”

It’s possible for a credit union to achieve similar results without investing thousands of dollars in new technology, says JMFA’s Southern. “Credit unions generally have software in place that will allow them to optimize their present work force,” she says. “Most of the time, they’ve just scratched the surface of what they’ve already paid for.”

But she agrees analyzing employee competencies can make a big impact. “You need to carefully match talents to the jobs you’re asking staff to do,” she says.

“In this environment of ‘doing more with less,’ having the right staff in the right jobs, consistently performing at high levels, are critical aspects to a credit union’s success,” says Todd Spiczenski, vice president of CUNA’s center for professional development (CPD). Identifying the right competencies for individual job functions and matching employees to those jobs is an ongoing challenge for credit unions, he says.

“In CPDOnline’s Learning Management System, we have competencies for a wide variety of job titles within a credit union and corresponding online training courses to help employees become proficient in each of the identified competency areas,” he says. “This can go a long way toward helping a credit union match the right employee with the right job function and providing consistent, competency-based training for multiple job functions.”

Spiczenski says talent, performance, and learning management systems are similar. Depending on the product, many have the capability to track learning, competencies, and performance management. And many can be customized to fit an individual credit union’s needs.

Employee input
Workforce optimization technology and competency-based training are helpful only if employees help define the change process, says Southern. While JMFA starts with a client’s management team and high-level goals and strategies, it then turns to staff.

“We talk to employees and get their suggestions on how to improve productivity,” she says. “Without their feedback, an investment in new technology or new ideas isn’t that valuable to the process. Sometimes management doesn’t even realize what tasks employees are performing that may need to be changed or eliminated.”

It can be eye-opening to discover practical, productive suggestions from staff on how to eliminate unnecessary procedures or how to implement more efficient ways of accomplishing tasks, she adds.

One large credit union client was able to avoid hiring 12 new people by making small changes. It expanded its branch network without hiring anyone. “Often, instead of one big change, it’s a lot of little things,” she says.

Another big component of employee engagement and productivity is the people and their personalities.

“Never lose sight of the people side of your institution,” says Southern. “Technology is a supplement…a tool to help you track productivity improvement. But employees have to believe that what they’re doing is important. That’s what makes a good employee happy and productive.”

“Employees who work in an environment of respect and fair treatment are far more likely to provide good service and go the extra mile for members than employees who sense they’re not valued, not trusted, or treated with disrespect,” agrees Sandia Laboratory Federal’s Love.

“A good analogy is nutrition,” she says. “You can’t eat junk for five years, and eat one healthy meal, and then be healthy. To achieve workforce optimization, you have to do a lot of things. It has to be ingrained in your culture and you have to have a work environment where employees trust you.” (“The trust factor.”)

If employees believe their supervisors and managers don’t respect them, they won’t be fully engaged, agrees Julie Bott, HR manager at $87 million asset Box Elder County Federal Credit Union, Brigham City, Utah.

Increasing employee engagement and productivity is a package deal, says Love. It’s not just a matter of running supervisors through training on motivation or investing thousands of dollars in the latest technology.

Workforce optimization, she says, also requires:

  • Competitive pay and benefits;
  • A respected name in the community;
  • Trained, effective supervisors;
  • Solid management and leadership;
  • Effective communication;
  • High performance expectations;
  • Effective consequences for poor performance;
  • Employee participation in the change process.

There’s also a danger in focusing too much on disengaged employees and neglecting your top achievers, says Bott. “Don’t forget the engaged employee. Don’t work only with those who need extra help. Acknowledge star performers who consistently do a good job.”

Box Elder County Federal encourages supervisors to reward star performers with:

  • Freedom passes for one-hour increments of time off;
  • Pocket cards that provide encouragement; and
  • Monthly kudos for exceptional work.

Incentives are one small part of the picture, says Southern. Workforce optimization requires people at all levels of the credit union to look inward and analyze how they can contribute to organizational performance, she adds. “It’s not just the employees—it’s their teams, managers, supervisors, and top management.”

“Workforce optimization has always been there,” adds O’Neill. “Usually it was expressed in terms of productivity. Getting the job done is one thing, but delivering extraordinary member service with fully engaged employees is true workforce optimization. Then you’re connecting the dots.”



Getting the most out of your work force starts with trust, says Stephen Covey in a recent interview with Training magazine. And it starts at the top, says the author of “The 7 Habits of Highly Effective People.”

“It’s Habit No. 5,” he says. “Seek first to understand before seeking to be understood. Leadership development needs to be tied to strategic goals, and reflect awareness of the entire culture. It has to do with basic needs, concerns, and challenges. If strategic goals come out of it, people will relate to it and will make it relevant.”

In today’s economy—with hiring freezes and existing workers taking up the slack of laid-off workers—Covey says organizational renewal can come from a three-pronged approach:

“That turns fear into engagement,” he says. “The three points should be central to leadership. Simplify to a few key strategic objectives. Transform fear of loss of their jobs to engagement through cultural involvement.”



As credit unions freeze or decrease wages for some employees, healthy benefits packages can alleviate some of the stress, according to CUNA’s 2010-2011 Credit Union Staff Benefits Survey Report.

Forty-one percent of employees consider their workplace benefits to be their financial safety net. And employees are more concerned than in past years with protecting their families in case of illness or death.

Health-care plans, especially, are crucial to employee engagement, the report notes. With increasing health-care costs and economic pressures, credit unions are looking for ways to continue the plans on tight benefits budgets. Only 1% of credit unions restricted employee eligibility for health-care coverage in 2010, according to the benefits report, while 41% increased employee cost-sharing for health-care coverage (Figure I).

Credit unions’ health insurance costs this year increased an average 14% over 2009 costs. Half (51%) of credit unions saw 2010 health insurance costs increase at least 10% over 2009 costs.

While most agree on the need to control escalating costs, many employers are unsure if health-care reform will achieve that goal. Seventy-one percent of employers believe health-care reform will increase the overall costs of health-care services in the U.S., while 69% believe it will increase the costs of their benefits programs, according to a study by professional services firm Towers Watson and the not-for-profit National Business Group on Health.


  • CUNA strategic alliance provider: John M. Floyd & Associates, Baytown, Texas