By Bob Cartwright, SPHR
Performance management programs and complimentary incentive compensation plans are an excellent way for your credit union to reinforce its business vision and organizational strategy, while improving employee morale and creating win-win scenarios within the organization and its workforce. As a reinforcement tool, a performance-based incentive compensation plan is one of the strongest and most effective ways for your credit union to communicate what it stands for, what it is striving to accomplish, and what it will pay for success.
A performance management and incentive compensation program must be carefully developed to support your credit union’s key business strategies and initiatives. In order to accomplish this, your credit union’s leaders and employee stakeholders need to work together as a team to help drive the development of key strategic goals and objectives in order to complement and support your credit union’s culture, mission, vision, and drive towards excellence. If key performance initiatives are not taken into account, the odds of your credit union achieving its business strategies are diminished. The main purpose of your program should be to achieve business results and to help drive the business to excellence. Best results are often obtained when:
- Employees have the opportunity to provide line of sight input toward key business initiatives and goals
- Employees work as a cohesive unit and share the capabilities and resources needed to accomplish initiatives and goals
- Compensation and rewards are aligned and contingent upon the success of obtaining or exceeding performance initiatives
When you execute your performance management and incentive compensation plan, the success of the program relies on communicating key contents of the plans, as well as the progress made toward specific initiatives and goals. By informing employees throughout your credit union, they will be clear on what the organization’s strategies are and how they can assist and participate in achieving success in driving the credit union to excellence.
In a nutshell, employees want to be successful and proficient at their jobs, and will be, given the proper tools, direction, and rewards. With a clear understanding and vision of the organization’s key initiatives, employees at all levels can add value and critical contributions to the organization through their own goals and stay focused on what the credit union wants to accomplish collectively. Investing in a performance management and incentive compensation program is one of the most powerful and successful strategic decisions your credit union can make.
Bob Cartwright is President/CEO of Intelligent Compensation, LLC, Pflugerville, Texas.
CUES has partnered with Intelligent Compensation LLC, and Carlson Dettmann Consulting LLC (CDC), Madison, Wis., to offer easy access to affordable compensation consulting.
