How San Francisco FCU Always Knows The Score On How It's Performing

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SAN FRANCISCO-When a disconnect exists between the credit union's financial results and individual employee performance, there's a greater chance the CU is headed for trouble.

In those cases, insists San Francisco FCU President Steven Stapp, the CEO is not in touch with what is really happening in the credit union, which can lead to problems in an economy in which the CU's financial condition can shift quickly.

"As a CEO you have to be in touch with how the organization is performing at all levels," said Stapp. "Our employee evaluation and performance incentive process allows me to have my finger on the pulse of the organization so it won't get away from me."

Stapp asserted that a disconnect between CU results and individual performance is one of the biggest problems with many employee evaluation programs.

Much of SFFCU's system revolves around a scorecard that tracks department and individual performance toward the overall CU goals on a monthly basis. Employees meet every 30 days with supervisors for short discussions on their progress, and then every six months for reviews.

Their performance is matched to SFFCU's overall scorecard, which includes 16 measurements that look at financial, human resources, and member results. "We are creating alignment with individual, department, and company performance, to make sure we are achieving our goals," Stapp explained. "If we are not achieving a goal, we will know why. The system creates a reality check to see if the credit union is pointed in the right direction and if everyone helping to support our objectives. For example, if the credit union is not performing well but all of our employees are rated well, how can there be alignment?"

Employees are rewarded at the end of the year based on how the $730-million CU meets or exceeds scorecard objectives. Top performers receive 100% of their eligible incentive, mid-range performers 80%, and low performers 0% to 60%. The system can be tough for employees, and potentially eliminate any bonus, in the volatile California economy. Last year, for instance, SFFCU lost money.

But the loss was due to unexpected assessments from NCUA and WesCorp FCU, and SFFCU still paid a bonus to employees. "Without those assessments we would have had 58 basis points of ROA, which was better than the year before," Stapp said. "So we pulled those assessments out of our final scorecard analysis."

This year potential assessments have been factored in. Now employees just have to look out for the crippled West Coast economy. "We look at the economy, as well, and try to set realistic scorecard goals," Stapp said, who acknowledged employees would likely receive a greater bonus if the economy were better. "But I think our system motivates everyone to rally toward fixing a problem, rather than just looking at another department for answers."

The scorecard, a product of the Cleveland-based Cardwell Group, has been in place since the start of 2009. Stapp said new employee engagement results are up "significantly" over the previous year.

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