Owned and operated by its members, Smart Financial Credit Union (SFCU) is a $392 million financial institution headquartered in Houston, Texas.
It was 1932 when the founding father, Mr. R.C. Roebuck, President of the Houston Principals Association, distributed a report to his academic colleagues. His document cited evidence in support of a pioneering banking model and recommended the establishment of a “credit union” for the benefit of Houston’s school personnel.
Today through its 16 branches SFCU serves over 76,000 members and holds true to the formative philosophy of its earliest days: to provide a full range of financial products and services with unprecedented personal service.
Questionable Data Impedes Planning
In 2007, Smart Financial hired Eric Gnospelius, VP of Learning & Development, with the primary purpose of improving internal management and leadership quality.
Digging into records, Gnospelius found the credit union had a poor track record promoting from within. Historically, internal promotions were somewhere in the 20% range. Compounding matters, SFCU used a performance appraisal system that simply amassed data in an online spread sheet format.
“The types of things that were being rated, the factors for competency, were limited,” recollects Dawn Craig, Human Resources Executive Assistant. “We were capturing details like good attendance and punctuality as opposed to more strategic leadership competencies.”
In their old system, SFCU used a five-point rating scale. Although the organization as a whole wasn’t meeting company objectives, when it came around to appraisals, everyone was being ranked ‘meets’ or ‘exceeds’ expectations. Individual performance goals weren’t aligned with corporate goals.
The performance review legacy Gnospelius inherited distilled the appraisal process into little more than a signed document tucked away and forgotten in HR files. No one really understood the point or purpose. Over the course of his first year with SFCU, Gnospelius conducted a series of educational presentations highlighting the benefits of effective performance reviews. In tandem with his educational outreach activities, he began to build a business case.
“One goal was to build a talent based platform to improve our ability to develop and promote from within. A close second was to be in a position to make good decisions about our people and accurately assess performance for compensation by collecting meaningful performance data. The contract with our then vendor was coming up for renewal so I took the opportunity to explore different options.”
Target: Align Corporate and Individual Goals
Being a small company SFCU knew it wanted a software-as-a-service vendor.
“We were already exploring competencies in our 360 feedback process which was the first talent process we really rolled out, so we were looking for a vendor that had integration with Lominger’s model because of its solid set of competencies and common set of ratings.”
Goal alignment was an equally weighted consideration.
“First and foremost,” Gnospelius asserts, “we wanted to make sure our overall corporate plan, from a vision perspective, was actionable at the employee level. Before making a commitment to any sort of system we made sure our plan had an execution component. Once we were confident this visioning was succinct and in place, we started looking for a system that allowed us to align goals from top to bottom; to be able to take our company-wide balanced scorecard and cascade that down to all employees with measurable performance goals that reflected the organization’s big picture.”
According to Gnospelius this criteria effectively eliminated 85% of vendors, leaving Halogen, Cornerstone and SuccessFactors as potential candidates.
As the solution-sourcing exercise progressed, says Gnospelius, it became evident “Halogen understood how performance management fit into the big picture and offered the competency tools for us to be able to manage our talent. The second piece was cost. Halogen’s quote was the best to come back to us. But it was more than price; it was value. eAppraisal™ was configurable which was really important to us and also very user-friendly, which was equally important given many of our users aren’t particularly tech savvy.”
Collaboration and Communication Prove Key
Taking its cue from an overwhelming majority of managers, Smart Financial opted to roll out the new appraisal format using a cyclical employee-anniversary-date approach rather than a fixed focal company-wide schedule.
In the words of Craig, the implementation and training was “awesome. We couldn’t have asked for anything better. Having that individual person to guide us step by step, having everything so organized, being supported with weekly and bi-weekly meetings, working on what we wanted to capture and use as end results; it was all great. They wanted to know what our business goals were, what we wanted to achieve and helped us get there.”
And when it comes to ongoing client support? “The person on the other end of the line knows exactly how to answer my questions, quickly. No problems at all,” Craig reports.
Fingertip Access to the Big Picture
Smart Financial is just beginning to compile concrete numbers to gauge its talent management ROI, but anecdotal feedback is already providing positive information.
The first immediate noticeable success was the ability to pinpoint where individual employee performance needed to improve. Some sales staff, for instance, was found to be falling short of goals. In the past, the organization couldn’t verify performance shortfalls. With eAppraisal, the management team had data and documentation to flag gaps and facilitate discussions.
“Part of the value of the system for us,” Craig notes, “is that it takes subjective things and helps make them as objective as possible. There’s a lot more clarity, a lot less chance for disagreement. Employees see the big goal, where they fit and what their part is. The competencies comment helper allows managers who have trouble communicating these types of things to find and use meaningful language to build a really solid review. This was actually the number one comment we heard back from our manager users. It’s s a huge benefit. Front line managers can speak to employees with candor. The solution facilitates difficult conversations that perhaps might not have occurred at all.”
“With this new system in place,” adds Gnospelius, “we’re able to say: ‘you know the big picture, you know where we want you to be, let’s revisit this in a couple of months and see if we’re where we need to be, and if not, we’ll take it from there’. But it’s going to be an individual process and in those cases we’re going to use the development plan feature within the Halogen suite.”
Additionally, SFCU has experienced:
Significant sales increases
“We can’t attribute that all directly to Halogen; of course there are lots of other external influences but that said, our results have distinctly improved. Preliminary reports indicate we upped our loan goals, which is the major goal for any financial institution, by 54% for every single person this year and we’re up 70% February over last February. Initial findings indicate the results are pretty impressive,” says Gnospelius.
Simplified administrative pressures
“We have about 20 to 25 different forms grouped by job categories. Our organization is really customization focused: everyone wants individualized everything for everybody. Our plans are to modify and reduce templates to a fewer number. But the ability to do so is what impresses us most and has a direct and positive impact administratively,” says Craig.
Planning and training advantages
One of the biggest values SFCU has reaped is the data that comes out of the backend. Management can now look at reports for individual departments by branch or collectively, pinpoint where to ramp up or maintain efforts based on the lowest and highest rated set of competencies and tailor training activities accordingly.
Hosting benefits
“As a financial institution we’re heavily firewalled,” Gnospelius explains. “Halogen’s hosting service is great for us because it allows us to keep our member data private and secure while at the same time allows our managers to access the tool from wherever they happen to be, whenever it suits them”.
High-level planning and execution
“Utilization of the Halogen performance management system has provided an organization-wide framework to assist management in getting our team focused on driving the results that matter to the success of our organization,” said LeAnn Kaczynski, SVP/CFO with SFCU.
