Independent Banker Magazine
In the Boardroom
Compensation counts, but so do other factors.
Recruiting and retaining qualified employees can be a tricky business. Knowing where your employees' salaries and fringe benefits stack up compared with your competitors' can be crucial in determining whether you'll attract the best employees and be able to retain them. More and more, this requires making employees feel good about their performance then rewarding them for it.
Jim Lynch, president and CEO of Leaders Bank in Oak Brook, Ill., says the next step is employee empowerment. There are many facets of empowering employees to think beyond a simple job description. But empowerment can't take place without a corresponding change in management.
Employees need to believe they are valued and that the quality of their work makes a difference, Lynch says. Those who don't feel valued or respected are more likely to go off and seek greener pastures. "At Leaders Bank, we work hard to foster a corporate culture of respect."
When a major employer in the Chicago area conducted a survey to measure job satisfaction among its employees, "compensation" and "job security" were expected to rank first and second in importance. They did. The surprise was that respondents listed "appreciation for work performed" a close third, even more important than good working conditions or opportunities for promotion.
At Leaders Bank, a sincere compliment for extra effort or a job well done takes nothing away from the bottom line and pays big dividends, Lynch says, which could be as simple as routinely acknowledging workers as individuals with a smile, a handshake and a pleasant comment, he says. Leader Bank's management empowers employees with various responsibilities in decision-making and improving service as well.
"We give them the authority to make decisions without always having to check with their superiors," Lynch says. "In staff meetings, we consider all ideas good ideas."
The key to employee empowerment is how top management communicates its objectives for employee responsibility, and how it recruits and manages to achieve those objectives. "You've got to do what it takes to keep your people happy," advises Roxanne Emmerich, a worker motivational speaker and consultant.
Emmerich claims that bank CEOs she's met are good lenders, but not necessarily "people savvy." As an example, she cites that too many bank managers ask tellers to take a transactional approach to their jobs. Instead, a teller should be routing people. "A teller's job is to help people and make sure they're aware of your bank's services."
Got kids? Tellers should mention your bank's competitive loans, Emmerich explains. Own a home and need money? Tellers should talk about your bank's home equity products.
"If your tellers think their job is more than just processing deposits and withdrawals, that it's also to bring in new business, they're going to have a completely different attitude about their job, a positive attitude," Emmerich says. "And getting people excited about their work is the key to employee retention."
Business growth strategist Andrew J. Birol presents a slightly different viewpoint on employee empowerment. Sales strategy can never replace personal passion, and personal passion is what empowers employees to their best performance, he says.
Unfortunately, Birol maintains, too many managers don't see employees individually. As a result, they are not empowering employees to do their best. "The worst mistake companies commit is to use employees interchangably and indistinguishably," he says. "Don't tell employees how to provide service. When you let them perform on their own talents and let their innner motivators guide the way, they usually navigate the sell much more successfully."
"Unlike traditional retailers, bank staff can be allergic to the idea of selling," notes Charlene Stern, senior vice president with NewGround, a Chicago employee development firm. "Ninety-five percent of the people who walk into a bank go to the teller window. So the teller is the bank to most people."
South Holland Trust & Savings, a 90-year-old community bank with five branches in suburban Chicago, has boosted employee morale while improving its bottom line in a variety of key areas. Authorized lines of credit sold, new checking and money market accounts, and check-card and Internet banking customers have increased since the bank began training its employees to make customer referrals.
The training makes employees perform better and feel great about it -- and earn money in the process. To motivate employees to redouble their referral efforts, South Holland offers incentives and tracks results. Ken Zagrocki, senior vice president of retail banking for South Holland, says his employees are happier when they help sell -- and receive monetary compensation for their efforts.
Get Your Compensation Report
Everyone wants to be compensated fairly. That means, to really know what your employees are worth, you've got to know what other banks in comparable marketplaces are paying, both in salary and benefits.
The ICBA's "Compensation and Benefits Survey Report" can help you get a handle on that. It provides compensation and benefits information specific to community banks by geographic location. In addition to mean compensation and benefits figures, median figures are also provided.
For ICBA members, the 200-page report is available for $250. For non-members, the report is available for $325.
To order the report, go to ICBA's web site at www.icba.org. Click on "education", then "publications." It's the first item listed on the page.
--Mr. Zall is a free-lance writer in Silver Spring, MD.