MADISON, Wis. - Variable pay programs–which tie monetary rewards to performance measures and productivity–continues to grow in popularity among credit unions, in part because it offers more flexibility than a simple increase to base salary, according to CUNA’s Complete CU Staff Salary Survey.
“I think variable pay is popular because it has become more difficult to apply significant base pay increases–which are permanent,” said Beth Soltis, senior research analyst, research services for CUNA and project director for the salary survey.
The survey showed that although variable pay programs increased overall, bonuses remained the most common. Among CUs with $1 million in assets or more, 62% offered bonus payments and 42% offered incentive payments to their employees.
“Variable pay can be applied when goals are met or bottom-line results achieved, so that in effect they pay for themselves,” Soltis said.
Variable pay can also be used to reward high-performing employees, or to offset lower wages for hard-to-fill positions, Soltis noted.
“With so much of expenses going to health care and with uncertainty over the economy, I expect variable pay to continue in popularity as employers shy away from committing to higher base salaries,” she said.
The trends this year also include hiring plans being down, Soltis said.
“Both the percentage of credit unions planning to hire full-time staff and the number of staff credit unions plan to hire is down compared with 2007,” she said. Thirty percent of CUs with $1 million or more in assets plan to add full-time employees to their payroll in 2008, compared to 35% in 2007, according to survey results. The percentage of CUs planning to hire part-time staff is also down, Soltis said. Twenty-five percent plan to add part-time employees to their payroll in 2008, compared to 31% in 2007.
Another trend being seen is that some credit unions are freezing wages, Soltis said, although this trend is not widespread.
“A total of 15% of credit unions with $1 million or more in assets report initiating a salary freeze in 2007,” she said. This is an increase from 7% in 2006. Fourteen percent of CUs plan to anticipate taking this action in 2008, Soltis said.
The survey also showed that management and non-management employees are equally likely to be eligible for incentive payments, while management employees are more likely than non-management employees to be eligible for bonus payments. (Bonus payments are not tied to preset performance criteria; incentive payments are tied to performance criteria.)
“I can’t say there were any surprises in the survey this year,” Soltis said. “The credit union findings mimic what is happening around the country across industries. Many organizations are taking a wait-and-see approach due to the economy, and I expected the survey to reflect that same feeling among credit unions–which it did.
“No trends died out,” Soltis continued. “Trends that continued are wage increases and turnover, both holding steady.”
CUNA’s survey provides compensation data for 89 full-time and eight part-time positions at credit unions with $1 million or more in assets.
“The report itself is a reference guide for credit unions to find out what credit unions are paying for various positions–base salaries as well as incentives and bonuses–and to help credit unions determine what to pay their own staff,” Soltis said.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com http://www.sourcemedia.com
