Getting a Grip

Managing employee performance is essential to ensuring the best possible customer experience, yet this can be extremely challenging for organizations, particularly if they rely on (as many still do) traditional performance evaluations where managers review and assess employee performance annually.

“There are absolutely better ways to manage performance,” says Tamra Chandler, CEO and founding partner of PeopleFirm, a Seattle-based company that consults on people strategy, organization performance, and talent and change management.

Chandler, author of How Performance Management is Killing Performance—and What to Do About It, says the three common objectives of performance management should be developing people, rewarding equitably and driving organizational performance.

“Today, we find that most performance-management solutions try to accomplish all three of these goals with just this one archaic review process,” she says. “And frankly, it’s largely failing on all counts.”

Instead, achieving these objectives is best ensured by focusing on creating engaged employees and connecting performance management to engagement, says Chandler, explaining that research shows the more engaged an employee is, the better he or she performs. This is difficult to achieve with “old school” traditional performance reviews which, more often than not, result in disengagement, she adds.

Taking Measures

According to Chandler, performance management processes should vary from organization to organization because no two are alike. Customizing the approach within the organization is another consideration, since there may be important differences between departments. For example, the loan servicing department and the HR department would likely require different performance management processes since these departments would have different performance expectations.

However, certain components—such as clear communication of expectations and goals, transparency/sharing performance results with employees and a way to measure results—remain constant no matter what. Among the most important components is immediate feedback on performance—positive and/or constructive.

Consider $980 million/100,000-member Y-12 Federal Credit Union, with 240 employees in Oak Ridge, Tenn. During the last 36 months in particular, the CU’s growth has been “exceptional,” says CUES member Keith Troup, CCE, EVP/chief operating officer.

“Over the past few years we’ve focused our efforts in key areas related to managing employee performance,” he explains. “First, we’ve begun to place much more focus and emphasis on member feedback as part of [this] overall process. Our goal is to have as immediate feedback as possible on member interactions—both external member-owners and internal members, those other departments within our credit union.”

Ensuring they are able to measure results in their performance management process has been another area of focus. To this end, all employees and every branch have “scorecards” summarizing employee/branch performance on several key indicators.

The CU recently installed 21 HappyOrNotKiosks in two branches to spark member feedback and obtain it faster.

The HappyOrNot system measures customer satisfaction via kiosks and web panels, explains Ed Gundrum, co-founder and CEO of DoublePort, LLC, an authorized HappyOrNot partner based in Andover, Mich.

“Both ask a single question to which the credit union member responds by pressing one of four smiley-face buttons (grin, smile, frown, upset),” he says. “The kiosks enjoy a response rate up to 30 percent because they’re fun, quick to use and perceived as being anonymous.”

The kiosks date- and time-stamp all responses, transmitting the information nightly, with credit union executives, branch managers and so on receiving graphical reports the next morning that reveal how the previous day went, says Gundrum.

“These reports can be used to determine overall member satisfaction and also anomalies in service that occurred during particular times of day,” he says. “Additionally, the daily reports have become part of the morning employee huddle at the executive and branch levels to remedy any negative feedback received the previous day.”

For example, one credit union researched the negative feedback it received and found that some were due to loan denials. In response, the CU established a policy that when a member is denied a loan, an employee extends an invitation to come in for a credit rebuilding session.

Credit unions can also use the HappyorNot system on their websites to perform the same function. Like the kiosks, credit union members respond to a single question by selecting one of the four smiley-face buttons. These questions can be about anything and can be changed within minutes.

CUES member Daniel Berry, CCE, CEO of $128 million/15,400-member Duke University Federal Credit Union, with 38 employees in Durham N.C.,  says the CU installed HappyOrNot kiosks last year at each lobby workstation and every drive-up lane.

The desire was to capture individual member feedback, says Berry. “The kiosks ask the same question, ‘please rate our service today.’ We don’t change the question so we can track the responses over time.”

Members can select from the four smileys, says Berry, explaining the CU measures performance based on a percentage of the responses, such as the number of smiles divided by the total number of responses.

“As of March 31, our satisfaction per the kiosks was 97.76 percent,” he says. “The lowest person was 94 percent, which matches our organizational performance last year. As a result, we’ve been more successful.”

HR departments are also using the technology to obtain employee feedback and measure satisfaction, says Gundrum, mentioning a CU that used the kiosk to capture employee feedback after a meeting.

“The results were not as positive as the CU execs anticipated,” he recalls. “The following day, each branch office held a meeting where the manager showed employees the HappyOrNot reports. This became the inspiration for the employees to open up about policies etc., they were concerned about.”

Honing In

Berry says Duke University FCU employees receive daily feedback based on the kiosks, although if an individual receives several negative results, coaching can occur more immediately. Supervisors also discuss results and trends with employees quarterly.

However, like Y-12 FCU, Duke FCU deploys additional tools to manage employee performance. These include reviewing metrics like cash over/short daily (with supervisors initiating a conversation to clarify expectations if there seems to be an issue); quarterly email surveys to members measuring their satisfaction; and a more in-depth, bi-annual survey. 

One tactic Duke University FCU no longer uses is secret shoppers. “We liked the standardization of the message to members,” Berry says. “However, employees learned who shoppers were based on the questions. We decided to use the kiosks to obtain opinions from all members in the lobby.”

Duke FCU employees are rewarded for performance. Those receiving a 95 percent satisfaction rating for the year receive $100. For every point above that percentage, they get an additional $100, with the maximum incentive topping out at $500.

Y-12 FCU uses the aforementioned individual employee “scorecards,” reviewed monthly by the direct managers, in determining variable/incentive program payouts, which occur monthly for employees in member-facing roles, Troup says.

“We have a ‘minimum’ number of points that need to be earned by a branch staff person each month to earn any type of payout. If you do not meet that minimum, the payout equals zero. Our top sales people are earning between 15 to 30 percent of their annual base pay in incentives on an annual basis,” Troup explains.

“It’s vital to have measurable goals and targets for our teams if we want to have long-term sustained success,” he says of the scorecards and other measurements. “Accountability isn’t a bad word. And we need to support leaders as we ask them to have true accountability conversations with staff on their performance.”

Incentive programs that reward for contribution and collaboration can help foster employee engagement, says Chandler, who recommends that organizations check in frequently with employees to see if they feel supported in their efforts to grow their careers, if they feel connected to the organization’s goals and direction, and if they have a clear understanding of how their efforts will be acknowledged and rewarded.

She also provides the following suggestions for credit unions trying to get a better handle on employee performance management:

• Create an employee-powered and transparent process so employees “understand how to engage, what to expect and how they can influence the outcomes.”
• Be future-focused when it comes to goals and discussions, rather than dwelling on past performance. Do this in a way that encourages employees to build from their strengths, bringing more value to the organization.
• Include more voices in the process to counter any biases and gain a broader perspective.
• Empower, rather than police, employees.

“Early in any performance management redesign effort, start with a discussion of the common goals and the importance and meaning of them to your organization,” Chandler says. “This early conversation could include your employees, using a variety of engagement techniques. Or, if you prefer to begin the conversation with a smaller team, you might loop employees in as part of your validation process.”

At whatever stage a CU decides to involve employees, doing so will not only help them understand where the organization is headed, but will contribute more voices, perspectives and insights, she says. Be sure to revolve the discussions around a defined set of outcomes, what Chandler calls “design principles.”

This “will provide a guide for choosing the strategies, methods, tools, cadence and other attributes that will comprise the future solution,” she says. “This will also make communicating the intent and expectations of the performance program far easier.”

Pamela Mills-Senn is a freelance writer based in Long Beach, Calif.