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Solid Returns
October 08, 2007
Banks like Umpqua, Wachovia, Bank of America and Cmmerce are empowering employees through the use of rewards and recognition
By Jeanie Casison-Tansiri
Every morning at Umpqua Bank begins with a "Motivational Moment," a company-wide ritual that provides participants with an instant pick-me-up for the day. During this mini pep rally, employees, or rather, "Universal Associates," across all departments and locations, meet for a few minutes to receive inspiration in the form of praise, success stories, poems, horoscope readings—anything to energize the team to deliver exceptional customer service.
"A bank is a bank. We all offer the same products—checking accounts, home loans and car loans. Umpqua tries to differentiate from the pack," says Barbara Baker, executive vice president of cultural enhancement for the Portland, Ore.–based community bank with locations throughout the West Coast. "When you walk into an Umpqua store, it looks like a Ritz-Carlton, very clean and polished, with a super-friendly atmosphere. When people work here, it doesn't feel like a regular bank, it feels a little different. Our atmosphere fosters teamwork, respect, camaraderie and better performance."
The attentive approach by Umpqua is a fresh departure from the fragmentation that sometimes plagues other financial institutions, where transactional work environments can prove detrimental to performance, productivity, morale and ultimately profitability. With banks at the mercy of market conditions, finicky consumers and other external factors, it can be hard to effectively engage employees and customers. However, there are companies that are rising to the challenge.
According to BAI, a financial services professional organization in Chicago, employee engagement is key in improving the quality of employee-customer interactions. And its studies indicate banks have ample opportunity to better connect. Findings from a 2005 BAI research analysis of 16,700 employee survey responses from 44 depository institutions reveal that when it comes to employee engagement among frontline branch staff, the majority (57 percent) are neutral, 37 percent are engaged, while 6 percent are disengaged. Interestingly, a separate BAI survey of 3,748 U.S. consumers found that 64 percent said that they would be willing to bring more business to their primary bank if they received better service.
"Retail banking is a commoditized business where products are more or less the same," says Paul McAdam, senior managing director of research for BAI. "Pricing can be duplicated readily. The customer experience is one of the last elements of differentiation, and the employee experience is right there with it because it is a key influencer of the customer experience and more bankers are realizing this."
Incentive takes a look at the strategies of four banks that are setting themselves apart.
Valuable Assets
The executive leadership at Umpqua understands that employee satisfaction is vital to the success of the organization. Since opening in 1953 to serve local lumberjacks who needed a place to cash their paychecks, Umpqua Bank has grown to 144 locations in California, Oregon and Washington, without compromising the commitment to the people who work there.
"When [CEO] Ray Davis came in 1994, he had a vision that he could build a community bank with the value proposition that he could give customers extraordinary service beyond what they expected and employees incredible treatment. And, if employees are treated well, they will treat customers really well," says Baker, who oversees human resources, training and culture for the bank. "We believe that what really makes someone feel valued is when you recognize them with other programs that take it beyond compensation. We give tons of rewards and recognition to people who demonstrate Umpqua culture and who are leaders in their area of business."
In order to achieve the goal of being the "World's Greatest Bank," Umpqua has implemented numerous initiatives, including the Spirit of Excellence Award, a monthly peer-to-peer program in which one winner from each region receives a "Serious About Service" lapel pin, $100, an executive bag and an extra day of paid vacation for demonstrating teamwork and professionalism. The President's Club is another important effort, as members of this exemplary group serve as mentors and provide feedback to the executive management team. They are honored with a diamond lapel pin, a crystal apple, President's Club business cards, their portrait on the Wall of Fame, a quarterly dinner with the CEO and more.
Once a year, Umpqua associates also look forward to getting together for the Celebration of Excellence, an awards gala where accolades such as the Chairman's Award, Years of Service awards and Store of the Year are given to deserving recipients. Other empowering programs include a Team Recognition Fund and Customer Relations Fund, which enable employees to present on-the-spot recognition such as gift certificates and other tokens of appreciation to colleagues or clients. In addition, the World's Greatest Bank University provides staffers with ongoing training and development, while the Connect Volunteer Network encourages all employees to spend 40 hours of paid time a year volunteering at the organization of their choice.
Yolanda Gutierrez, pictured below, a manager at the Umpqua store in Roosevelt, Calif., takes tremendous pride in her place of employment. When she first started out as a new accounts representative at Humboldt Bank in 2003, while pursuing an accounting degree at Sacramento State University, she had no intention of staying. A year later, Umpqua acquired Humboldt, and she quickly changed her mind.
"Umpqua was new to California, so they started off with town hall meetings. It was nice to see Ray Davis and other executives come down and tell us about the culture, recognition and Celebration of Excellence," says Gutierrez. "I remember thinking, 'Wow, this is for real.' I've been through mergers before, and they always tell you something, but there is never any follow-through."
Three months later, Umpqua cross-trained Gutierrez to handle loans. Unlike other banks, where employees work exclusively as a teller, loan officer or supervisor, Umpqua teaches its Universal Associates how to perform all job functions. "At Umpqua, everyone knows how to do everything. This is the only bank I know that does that," she says.
Over the years, Gutierrez has been named to the President's Club, participated in the Connect Volunteer program, and received honors including the Universal Associate of the Year Award and Top Sales Associate of the Year Award, presented at Umpqua's Celebration of Excellence event. Last year, she received the Chairman's Award, along with $500 and a trip for two to Hawaii for a week.
"I love where I work. I love it because of the sense of empowerment they give you," says Gutierrez. "Our executive management is very caring. When you make suggestions, they really listen to you. They make you feel important. I fell in love with Umpqua, and I don't plan on leaving."
All of these efforts that Gutierrez appreciates have certainly not gone unnoticed in the marketplace. Umpqua Bank has proved to be an employer of choice. It has been named by Oregon Business magazine as among the state's best places to work 10 times since 1996, and landed in the 34th spot on Fortune magazine's "100 Best Companies to Work For" list in 2007.
The Spirit of America
At Bank of America, a well-thought-out rewards and recognition platform has certainly become a best practice. The Charlotte, N.C., financial institution has generated awareness and high participation among its associates for its five major recognition programs: Spirit Cards, Spirit Rewards, Spirit Medallions, the Spirit Award of Excellence and Anniversary Awards.
With Spirit Cards, individual associates and entire teams can be acknowledged at any time by their peers or manager with an online card or printed card for specific actions and behaviors that capture the Bank of America spirit. The Spirit Rewards program has proven popular, as it promotes peer-to-peer recognition with the presentation of points that can later be redeemed for a wide selection of items, including jewelry, sporting goods, travel, Bank of America branded merchandise and more.
Spirit Medallions are special awards given in a public forum by managers to individuals and entire teams whose actions have had a significant impact on the customer, associate or shareholder experience. The Spirit Award of Excellence is considered the most prestigious recognition reward; it honors top performers who have realized productivity gains over the year with a celebratory event hosted by the senior leadership team. The Anniversary Award salutes employees at the one-, five- and 10-year anniversary and every five years after that, with a special lapel pin, public recognition and gift.
Since introducing the five programs, Bank of America has experienced several milestones, including associates sending an average of 500,000 Spirit Cards annually, and 15 employees celebrating over 50 years of service with Bank of America this year.
"What makes our programs so successful is that they tie in to our brand message and core values," says Kevin Cronin, recognition and rewards executive for Bank of America. The five core values, which represent how Bank of America aspires to interact with its customers, shareholders and the communities in which it serves, are: doing the right thing, trusting and teamwork, inclusive meritocracy, winning and leadership.
"From the feedback we hear from our associates, our programs help them focus on business goals and promote teamwork, and it is a great way for managers and associates to recognize each other and support the work we are doing, ultimately taking care of the communities we serve in," says Cronin.
Wachovia: All Together Now
Wachovia is dedicated to delivering great customer service. One way the Charlotte, N.C.–based organization achieves this key objective is through its Shared Success program. The initiative encourages employees to recognize one another for giving great service to both its internal (peers) and external customers.
Associates simply go to a dedicated Web site, select an individual's name and enter the reason for recognition. E-mails go out to the employee and the individual's manager, notifying them about the award. A Shared Success certificate is then sent to the top performer. Each month, all Shared Success Award recipients and the people who nominated them are entered into a drawing for the giveaway of ten $100 gift certificates.
"We are very committed to customer satisfaction and loyalty at Wachovia, and that only happens through great employees and what they do at the front line every day, and all of the people who support that delivery," says Monica Matherly, director of the center of expertise for corporate customer service excellence at Wachovia. "Shared Success offers us a way to truly recognize individuals who make it happen for customers every single day."
As for participation, Wachovia has received tremendous response from employees, with an average of more than 22,000 Shared Success Awards sent every month. "With 110,000 employees and over 22,000 awards a month, that is a lot of recognition going on within the company," Matherly says. "It is a very visible program and heavily utilized."
 Cohesiveness at Commerce
Fortunately, there are organizations out there that can drive sales without sacrificing the sanity of their employees. Commerce Bank takes a holistic approach to incentive programs, says Linda Verba, executive vice president of retail banking for the Cherry Hill, N.J.–based company.
"My guess is that we do incentives differently from other companies. The banking industry tends to provide incentives in a piecemeal sort of way, where when you open up a checking account or sell a credit card, you get a monetary incentive," says Verba. "Commerce approaches it holistically in terms of products that we want to offer and in terms of incenting groups of people to work together cohesively. Our incentive programs tend to be based on campaigns."
Rather that focusing on individual sales performance, Commerce looks at the collective efforts of a store. The most recent initiative, the Destination Wow campaign, which ended in September, offered points to stores for a number of positive behaviors, including doing well when a Wow mystery shopper drops in to evaluate service, receiving fan mail from customers, and opening checking accounts or consumer loans.
"Points are tallied on a per store basis. The store with the most points wins. Everybody attached to the store is engaged—consumer lenders, residential mortgage lenders—and they win prizes such as a team box to a New York Yankees or Phillies game," says Verba.
A Commerce campaign typically lasts anywhere from six weeks to 90 days. Throughout the campaign, employees receive constant reinforcement. Verba says, "It is rare for Commerce Bank to focus exclusively on products combination. In our world, we strongly believe that service sells."
To ensure that Commerce employees are practicing the company's "Wow the Customer" philosophy, the bank has a few sources of support, including a dedicated senior retail market manager in every market, whose job is to drive sales and service and develop talent.
Commerce also conducts 100,000 mystery shops a year called "Wow Shop." Every time an employee gets recognized by a Wow Shop customer, the individual receives a C-Sticker that can be traded for seasonal prizes such as a barbecue set or beach towel in the summer, or flannel pajamas in the winter. In addition, Commerce University and the Wow Awards gala further promote the bank's culture. The power of Wow seems to be working. For the second consecutive year, Commerce Bank ranks as the highest in customer satisfaction in the Mid-Atlantic region, according to the J.D. Power and Associates 2007 Retail Banking Satisfaction Study.
As the banking industry continuously evolves, employee recognition and incentives will be a constant. Regardless of program approach, it all goes back to the basic notion that happy employees mean happy customers.
"If you look at the branch bank environment, one of the things they constantly survey is the people, says John Keller, a principal of The Alexander Group, a sales consulting firm in Scottsdale, Ariz. "They interview people about their experience with the bank. In instances where the employees seem happy, the customer experience rate is higher. The satisfaction as a customer is higher because they enjoy interacting with the employees who are glad to be at work. There is employee engagement," he says. "Flip it around, and if employees are unengaged, unfulfilled and feel disenfranchised, this tends to reflect on the customer side as a feeling of impersonal service. So employee engagement does tend to align with customer satisfaction and a positive customer experience."
Sidebar: Strategic Alignment
Experts agree that when developing a recognition or incentive program, it is imperative to integrate specific business goals and to communicate these expectations to all employees to make an impact.
"The behaviors that you are asking of frontline employees should be ones that they clearly understand and can link to an objective, whether that is delivering quality service or improving customer retention," says Paul McAdam of BAI. "Whatever those big corporate goals are, they should be clear and understandable. The incentive system put into place should match up to these goals and be consistent with the bank culture, product packaging and pricing strategies."
Bob Nelson, Ph.D., author of 1001 Ways to Reward Employees, also stresses the need for employees to understand how their jobs contribute to organizational success. "Regardless of your position within the bank, everybody needs to know the business and know who they are competing with, and not be pigeonholed with one job," he says. "Everybody needs to have a certain respect and dignity and think about if each action will help or hurt the organization. Management should also be hiring for the best thinking and judgment and not just someone to fill a chair or process forms. Employees need to understand the mission and how they can help fulfill that mission."
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