For credit unions considering making the transition from serving members merely as order-takers to creating a sales environment in a culture of service and helping, you may want to consider restructuring your current compensation system as well.
HR Managers and CFOs, hold your seats! I’m not talking about giving away the store here, but we all know that fairly paid employees are happy, productive employees. Also, notice that I said “fairly paid”, which can also mean well paid, but only if employees meet their goals and show that they are a valuable asset to your organization.
In an earlier blog, I talked about the restructuring of positions and departments based on their main functions into three groups – Sales, Service and Support, where the Sales and Service groups exist primarily to serve members while the Support group addresses the needs of the staff and the greater organization. Your compensation system should be different for these groups, as they each bring a different type of value to your credit union.
The Sales oriented positions, by their nature, will have lower base salaries with significant up-side potential through incentive income opportunities. The Sales group has a greater compensation opportunity, but it is at risk and variable. They must sell to reap the rewards of this system. Their compensation is highly self-driven and self-influenced.
The Service and Support groups will have more traditional, fixed salaries. The vast majority of their salary is not at risk. Their salaries are more consistent and predictable. However, there will be opportunities to earn incentives as well, especially for the Service oriented positions. Their incentive pay will likely not be based directly on their individual performance, but rather their incentives will be more reflective of corporate-wide goals. Compensation in this system is not self-directed or significantly self-influenced.
The goal of this structure is not necessarily to have armies of people in Sales and Service, but rather to have fewer, more highly skilled and more highly compensated people in all areas. The opportunity for all under this compensation structure will be greater, but it is a three-legged stool with the emphasis being on having fewer positions with highly skilled specialists who are highly compensated in return for making profits for the credit union while delivering outstanding member service and being advocates for our members.
I expect that about 30% of Aspire FCU employees will be in Sales positions and about 70% will be in the Service and Support functions by the time our vision is realized. Much of our organizational chart, by default, is already under this basic structure. However, over the next few months we will be realigning more functions into this new approach. This will entail some new or revised job descriptions, further compensation changes, additional training and management adjustments. This will not necessarily mean wholesale changes. In many cases it’s a mindset and the deliberate extraction of Sales from the existing Service functions and vice versa.