Community banks need to reward employees for good performance, not for making it through another year at the bank.

That's the message of Coy D. Lewis, a Houston-based bank consultant. Speaking at the Independent Community Bankers of America's annual convention last week, Mr. Lewis urged more banks to discard their traditional pay policies and adopt incentive-based programs. According to Mr. Lewis, base salary increases and bonuses should be given only to employees who demonstrate performance that's "above average or exceptional."

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