Our Daily Bread
Simply doling out guaranteed salaries no longer works in banking today, contends Michael Woody, a bank consultant in Edmond, Okla. Instead, employees must earn their pay. They must produce regular, tangible results. They should be rewarded based on their bottom-line contributions.
That's true for front-line tellers as much as CEOs in corner offices, Woody says. "If anybody comes to work today for a salary, you probably don't want them," he adds. "Nobody works for security anymore, because there is no security anymore."
Incentive-based pay, Woody advises, is key to generating top employee performance at community banks. In fact, every paycheck should reflect each individual's true contribution to your bank's bottom line.
In an IBAA workshop scheduled Nov. 19-20 in Bermuda, "Incentive Compensation and Fee Income," Woody lays out the benefits of three primary compensation strategies-point of purchase, bonuses and equity incentives-that you can use to motivate every employee at your bank to a higher level of performance. "My goal is for the incentive program to permeate the culture of the bank in a way that becomes as natural as living and breathing," he says.
Woody says bankers should consider using a mix of these three proven compensation strategies, matching the appropriate one to each employee's responsibilities. …