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Customer Case Studies — Market Sector: Financial
Credit Union chooses Incentease to
lower expenses and reward top performers
Incentive planning solution improves bottom line and enhances communication
At a time when economic conditions in the financial services industry had competitors cutting payroll budgets and reducing benefits to maintain profitability, Tyndall Federal Credit Union bucked conventional thinking and chose rather to invest in an achievement based incentive compensation program—Incentease from HRN Management Group.
Philippe Asselin is Vice President of Human Resources at Tyndall FCU located in Panama City, Florida. Tyndall FCU has been serving the financial needs of individuals and businesses in northwestern Florida since 1956. Tyndall FCU employs approximately 290 employees working out of 11 branch locations.
Mr. Asselin explained why Tyndall’s strategy went against the grain amidst the harsh economic climate and industry belt tightening taking place during the second half of 2008, “Our thinking was contrary to many other organizations where operational cost savings were attained by scaling back on benefits and pay increases. We chose to not hack benefits and compensation but rather to improve operational efficiency in order to reduce costs and increase member benefits. Our strategy was to retain and reward top performers through incentive-based pay to do more with less and focus on key strategic goals.”
The first step was developing measurable objectives that once achieved would earn, or save more money than the incentives being paid out to the plan participants. This return on investment (ROI) is vital to a successful incentive compensation program.
Back to basics
One of the lessons learned by Tyndall FCU was that they had to simplify their incentive plan performance objectives and get back to basics. Mr. Asselin stated, “Our plans were too elaborate at first. We tried to define and measure everything. That approach had to be changed. HRN consultants helped us simplify and get back to basics. For example, with expenses in so many areas to address we stepped back to look at overall budget savings and let the stakeholders determine where expenses could be better controlled.”
Incentease is built on solid business fundamentals; i.e. that incentive compensation at its roots is a strategic tool to increase revenue and profitability. Therefore the system includes tools and functions to not only track individual performance but also to collectively evaluate all plan components and their results.
Mr. Asselin explained, “It is very satisfying to present real numbers, that show in essence, that while we awarded X dollars in incentive payouts, the overall achievement of plan objectives earned or saved a significantly larger Y dollars.
“Incentease helped us go from good to great in many areas! Performance plans drive performance, but incentives helped our staff members to be more aggressive and become better performers.”
Time savings just the beginning
Prior to implementing Incentease, Mr. Asselin invested much time and effort gathering data and manually inputting information onto multiple spreadsheets that tracked the performance status for fourteen managers, one AVP, and VP’s.
“Incentease helped us go from good to great in many areas! Performance plans drive performance, but incentives helped our staff members to be more aggressive and become better performers.”
Philippe Asselin, VP, Human Resources
Tyndall Federal Credit Union
He recalls, “Before Incentease the administration of our incentive program was a manual, time consuming process. Putting aside the time involved with establishing individual incentive plan components and tracking data, the level of stakeholder understanding and involvement was critically lacking. There was no way for plan participants to regularly see how they were performing and how this level of performance, or more importantly the next level, would translate financially. Participants would just take the check without thoroughly understanding how the payout amount was determined.”
Because Incentease is an online solution, participants may log in on a regular basis to check performance. It clearly shows in dollars and cents where an individual is at and how much they will earn if they achieve this at level 1 or that at level 2. This involves stakeholders much more closely in the process. That involvement quickly translates to motivation.
Balanced scorecards and line of sight
Once the decision was made to go with Incentease, the implementation process was straightforward and well managed by HRN. Mr. Asselin met with HRN consultants to discuss needs and objectives. First the participants were identified along with the types of goals and performance measurement criteria. Then it became a matter of breaking down this information into personal performance scorecards and inputting data.
The personal scorecard philosophy is integral to Incentease. It is based on a performance motivation principal called ‘line of sight’. This means that individuals view their goals as attainable and know it is in their sphere of influence to contribute towards achieving the goal. Each goal is then given a weight based on overall importance and the final result is called in Incentease, a balanced scorecard.
Good to great
HRN compensation consultants and Incentease product experts worked closely with Tyndall FCU throughout the entire implementation process.
Since Tyndall FCU already had a documented incentive plan program in place, the overall implementation process focused on migrating the paper-based data into Incentease and personalizing each individual scorecard. This process was completed and the system was ready to use within 30 days.
Tyndall FCU has been using Incentease for 18 months. During this period there has been a noticeable increase in productivity, expense management and reduced delinquencies. This has resulted in a clear bottom line improvement in credit union performance and return on investment.
Communication key to improvement
The most unexpected Incentease benefit has been the quality of communication between participants, HR and senior executives. Once a resource was accessible that contained individual plan objectives and achievement levels, conversations such as, ‘How can I get from a level 3 to a level 4?’ began to take place. This opened a dialog on performance feedback, and encouraged new ideas.
Mr. Asselin stated, “A contributing factor for the success we have achieved is closely associated with having everything visible to participating managers all in one easy to understand system. Incentease allows administrators to easily update information and for participants to quickly check progress and see how this translates to dollars.”
HRN expertise every step of the way
The founders of HRN are compensation and performance management experts. For twenty years their philosophy is to build customizable solutions, enabled by the latest technology, that save client’s time and money while motivating and improving the performance of their employees. HRN consultants ensure that each implementation is customized to meet the individual needs of every client.