LAS VEGAS–A credit union with more than 700 employees that sees less than 6% turnover annually—and nearly all that voluntary—shared its recipe with CU human resources professionals here.
Three executives with the $3.6-billion Eastman Credit Union in Kingsport, Tenn. outlined for attendees at the CUNA HR and Organizational Development Council meeting here how changes its culture, annual bonus structure and “no ratings” performance management system have driven growth and made it an employer of choice in its markets.
Among ECU’s unique workforce, which is spread over 27 branches and three states: more than 90% of its new hires have a bachelor’s degree, including tellers.
Until 18 months ago, Eastman CU had a cumbersome, paper-based employee development system that was labor intensive for the HR department, managers and the credit union’s employees.
That system was based on four components:
- Job expectations (which usually mirrored the job description)
- Key accomplishments (workers are expected to be able to tell managers how they contributed to the success of ECU over the last year; the credit union expects at least three examples).
- Development and coaching (all of its employees have a development and coaching plan in place).
- Career interests. (What does the employee want to do at ECU? Where do they see themselves in three to five years?)
Those four components remain in place, but today, after two years of research, Eastman Credit Union has moved to a cloud-based performance management software solution from Cornerstone on Demand.
Just the Beginning
“The selection (of a solution) was just the beginning, as we wanted to customize and automate as much as possible,” said HR Director Mark Millwood. “We spent a full year implementing and configuring the new system to take advantage of all its bells and whistles.”
That year included numerous meetings with and surveys of the CU’s “internal customers,” its employees, to gather their feedback, he said.
The solution was selected in large part because it integrated with ECU’s HRIS and payroll system, which is ADP. “So, all the data feeds were already built. The system is single sign-on for all employees,” said Millwood.
“One capability we love is every employee has an online profile,” said Millwood. “As soon as you’re hired, you’re loaded into the system, and it’s your job to keep an updated and relevant resume all the time. If you’re going to apply for a job internally, we require that you apply with your online resume As part of that we ask what do you want to do in the next 12 months? Next three years? We look for where you are active outside the credit union. As you can imagine, our Millennials jumped all over this. At first, we a little concerned if our managers would be comfortable with it, but they have adapted very well.”
Millwood added the solution has been especially helpful to managers who have a considerable number of direct reports.
In ECU’s system, employees rate themselves and manager rates them on certain attributes, but there is no overall rating.
The review process launches in February and managers and employees have until mid-May to complete the reviews. There is follow up in August/September.
“All this is a conversation starter, and that’s the key, said Millwood. “The manager gives a coaching plan to the employee to work with at the end of the review. We all have room for development; that’s one of our core values.”
All new hires are given a review at 120 days.
Strong Results
What has been the result of the online solution? According to Millwood:
- Employees are regularly updating their progress without being reminded.
- Managers needed time to adjust to the new system, but now have positive feedback.
- HR has easy access to standardized reports and the ability to write custom reports on just about anything.
The credit union has developed a uniform language to help all employees understand what it takes to be successful, Millwood added. The HR team also did road shows for employees at various staff meetings.
“We’ve had managers say they want job-specific competencies, such as mortgage or operations,” he said. “We have not gone down that path yet, as it’s a big piece of work.”
According to Carol Cross, VP-HR, the credit union’s philosophy is that performance management is a day-by-day, ongoing process and not an event or a one or two-time occasion.
“We tell our managers upfront, that if an employee comes to an EDS session and it becomes a disciplinary session, then you haven’t done your job,” Cross said. “(Managers) have become more and more proactive. They don’t let somebody derail. It is not fair to just let someone run off down a path of no return. Some people get there through choices they make, but it should never be because of performance, unless we have done everything we can to get them back on track. The number-one job of a manager is the success of your employees.”
Of Eastman’s employees, 76% are female. the average age is 39 and the average length of employment is 7.72 years.
Three Components of Program
At Eastman Credit Union, said Cross, the three components of its merit-based compensation program are:
- Annual base pay and structure adjustment. “We are team based. We believe no one individual can perform without the other individuals. This step happens in early October. We have 20 salary grades total. That is our step to stay at a competitive market advantage.”
- Reclassification. Promotion to higher SG due to higher level of skill and overall contribution.
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Special Recognition. This is for employees who have gone above and beyond and shown exceptional performance and extraordinary accomplishments.
“They may have led a project that was an extraordinary success, or stretched outside their normal area of expertise,” said Cross. “Or it could be that teller who shows up every morning with a smile on her face and makes it a ‘wow’ experience for the member every time.”
Cross explained that Eastman CU also does surveys that are used to determine its “Happy Member” score, which is similar to Net Promoter. The Happy Members are those who will continue to do business with ECU and make a recommendation.
“We are always asking, ‘How can we do this better?’” said Cross. “We believe complacency is our biggest enemy.”
ECU also conducts an employee engagement survey every two years, and the numbers have steadily improved. Cross said in 2016 employee rated the CU an 8.85 out of 10.
In terms of its compensation philosophy, it seeks to provide a compensation package equal to or better than peer group. It defines the “highly competitive range as 90% to 100% of market median base wage. It defines the “fully competitive” pay range as 80% to 120% of market median base wage.