BONUS PROGRAM SURVEY REPORT Conducted for Staley Credit Union

Fall 2012

Compiled and Prepared by Kenneth C. Bator

President Bator Training & Consulting, Inc.

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BONUS PROGRAM SURVEY REPORT

Table of Contents

Executive Summary – Page 4 Results and Interpretations from Responses:

What is your credit union’s approximate asset size at the time of this survey? – Page 4 What is your credit union’s approximate number of members at the time of this survey? – Page 5

How many people do you currently employ? How many full-time? Part-time? – Page 6

How would you characterize your credit union’s field of membership, i.e. single sponsor, community, SEG-based, other? – Page 7

If single sponsor or SEG based, how would you characterize the industry you serve, i.e. healthcare, law enforcement, union-based workers, education, etc.? - Page 7

How would you describe your credit union’s geographical region, i.e. rural, industrial, mid-tier city, major metro-area, other? – Page 8

What is your geographical region? – Page 9 How often is your bonus program reviewed, i.e. annually, every three years, as needed, other? – Page 10 How involved is the board of directors in determining the bonus program? – Page 11 Does your credit union have one inclusive program for all levels of the organization or are there separate structures for management and non-management employees? – Page 12

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BONUS PROGRAM SURVEY REPORT

Table of Contents - Continued For management, our bonus program is based upon the following. – Page 13 For non-management employees, our bonus/incentive programs are based upon the following. – Page 14 Are there tiers to your bonus program? – Page 15 How often does your bonus program pay out? – Page 15 Is any portion of the bonus payout at the discretion of management or the board or is the entire program set by specific and unchanging parameters? – Page 15 Is your bonus program seen as a motivator to exceed goals among both management and non-management employees? – Page 16 Does your bonus program serve as an instrument in retaining key and high-performing staff? – Page 16 Are periodic updates on the status of components of the bonus program communicated with staff? – Page 16 Is your bonus program truly aligned with your credit union’s culture and brand or is it solely an extension of your strategic plan alone? – Page 16 How often is your credit union’s bonus program updated? – Page 17 When reviewing and updating your credit union’s bonus program do you consider the following? – Page 17 Does your credit union employ multiple bonus/incentive programs for different departments? – Page 18

Conclusions – Page 18

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EXECUTIVE SUMMARY

The bonus program survey conducted during the latter half of 2012 by Bator Training & Consulting, Inc. (BTC) was done for and commissioned by our client Staley Credit Union (SCU) in Decatur, IL. As BTC facilitated SCU’s strategic planning project, some questions arose concerning the institution’s bonus and incentive programs. Through those conversations, a genuine interest developed in how other credit unions implemented and managed these programs. Thus, BTC and SCU worked jointly to develop a survey that was sent to nearly 1,000 credit unions ranging in asset size from $75 million to $250 million. A total of 65 credit unions responded and participated giving us an approximate participation rate of 6.5%. The finding from the survey can be considered in two ways: the first being an exercise in obtaining information and possible validation among peers and the second as a research project. In regards to the former, there is significant value in the report for community credit unions under $250 million in assets with less than 25,000 members and fewer than 60 employees headquartered in the Midwest as the data is clearly skewed toward those demographics. As a market research study, these results are a good start but further data would need to be gathered from a larger sample size in order to truly determine trends and tendencies.

RESULTS AND INTERPRETATIONS FROM RESPONSES What is your credit union’s approximate asset size at the time of this survey? A total of 63 of the 65 credit unions that participated in the survey reported their asset size. The average asset size was just under $141 million. The breakdown was as follows: 13 – Larger than $200 million in assets 11 – Between $150 million and $200 million in assets 18 – Between $100 million and $150 million in assets 21 – Under $100 million in assets

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What is your credit union’s approximate number of members at the time of this survey? The average number of members among the 63 participating credit unions that reported their member count was just over 15,500. The breakdown was as follows: 9 – Between 25,000 and 50,000 members. This group ranged in assets from $185 to $239 million. 34 – Between 10,000 and 25,000 members. This group ranged in assets from $75 to $250 million. 20 – Under 10,000 members and ranging in asset size from $77 to $193 million.

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How many people do you currently employ? How many full-time? Part-time? All but one of the respondents reported their employee totals. The average number of employees among the participant group was 46. The largest number of employees, 140, was reported from the sixth largest credit union to participate at approximately $230 million in assets. Not surprisingly, this credit union also reported the largest number of members at 50,000. The fewest number of employees reported was 13. This was reported by two credit unions. One a $95 million credit union with 6,000 members where all employees are full-time. The other an $80 million credit union with just over 9,000 members reporting 11 full-time workers and two part-time. The breakdown of total employees among the participants was as follows: 6 – Over 90 employees. With the exception of the credit union with the largest number of employees mentioned above, the number of members range from 25,000 to just under 40,000. With the exception of one credit union with an asset size of $174 million, the other five institutions in this sector ranged between $210 million and $240 million. Not surprisingly the $174 million credit union had the highest percentage of part-time workers at 24%. The other five institutions had a percentage of full-time workers at 84% or higher with the highest percentage being 97%. 8 – Between 60 and 90 employees. All but one credit union in this group ranged between $185 million and $250 million in assets. The exception was the smallest credit union of the eight at $145 million in assets. Unlike above, this credit union although the smallest in the range, had a high-percentage of full-time employees at 96%. With the exception of one $240 million credit union which had 26% of their employees listed as part-time, the percentage of full-time employees ranged between 90% and 100%. The total number of members varied between 20,000 and 30,000 for this group. 32 – Between 30 and 60 employees. There was a wide disparity within this sector in asset size, number of members, and percentage of full-time employees: from $75 million to $234 million, from 8,300 to 25,000, and from 57% to 98% respectively. 19 – Less than 30 employees. With the exception of one credit union, asset size ranged between $75 million and $140 million. The exception, a $193 million institution, had the fewest number of members (5,000) and one of the lowest totals of employees (14) among all survey participants. The remainder of this group ranged from 6,000 to 14,300 members with a relatively wide range in percentage of full-time employees from 67% to 100%.

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How would you characterize your credit union’s field of membership, i.e. single sponsor, community, SEG-based, other? If other, please explain. Of the 65 participants, the vast majority characterized their institution as a community credit union – 45 (69%) to be exact. The next highest category was SEG based credit unions at 23% (15). The remaining five credit unions characterized their organization as a single sponsor. Of the five single sponsor credit unions, there were no distinct similarities except for the percentage of full-time employees. Each were between 90% to 100% in the full-time employment category. There were no distinct similarities among the 45 community credit unions or the 15 SEG-based credit unions. There was a wide disparity among asset size, number of members, number of employees, and percentage of full-time staff. If single sponsor or SEG based, how would you characterize the industry you serve, i.e. healthcare, law enforcement, union-based workers, education, etc.? Of the five single sponsor credit unions, two serve educational professionals. The largest of the five is a healthcare credit union. Meanwhile the other two described the industries they served as “other”: one as financial/agriculture and the other as insurance. The industries served by SEG based credit unions varied widely. Only two groups of two within labeled their institution as serving the same industry with one being manufacturing and the other being union. One credit union serves healthcare professionals while another serves the educational community. The remaining nine credit unions characterized the industries they serve under the following written categories: life science, multiple, municipal, government, postal, agriculture, chemical/government, municipal/government, and N/A.

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How would you describe your credit union’s geographical region, i.e. rural, industrial, mid-tier city, major metro-area, other? If other, please explain. Of the 65 total participants, 61 credit unions chose to answer this question with the largest percentage, 24 credit unions (39%), categorizing their location as a mid-tier city. The next two most chosen categories were rural and major metro area each representing 25% (15) of this 61 credit union group. Of the remainders, six chose “other” while one chose the industrial category. Among the largest segment of this group, credit unions located in a mid-tier city, 11 are community credit unions. Seven of these mid-tier city institutions are SEG based and two are single sponsor. Asset sizes, number of employees, and percentage of full-time staff varied widely among this sector. The only obvious commonality, which would be expected among institutions located in a small to medium populated city, is number of members. All but one credit union fell into one of the two smaller categories of members listed above with 25,000 or less. The single organization which was above is just slightly over that total with 25,900. All of the 15 institutions in rural areas are community credit unions. Similar to the category discussed above, there was no distinction in asset-size or number of employees but, again as would be expected in this type of region, the number of members for each CU was 25,000 or under. There was only a mild distinction in percentage of full-time employees with 10 of the 15 employing less than 15% of the staff as part-time. Among the 15 credit unions located in a major-metro area, the group was split almost evenly with eight community credit unions and seven that are SEG based. These institutions have a relatively high percentage of full-time workers. All but one that reported number of staff have 84% or more of their employees at full-time. Over a third of this group have 10% or less of their staff listed as part-time. The total number of employees, number of members, and asset-sizes varied widely. There were no distinct patterns or similarities among the remaining seven credit unions that reported a geographical area.

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What is your geographical region? (Please circle) Nearly half of the credit unions participating in the survey are located in the Midwest (42%). Given that this survey was commissioned by a credit union in the Midwest, it would be expected that many of this institutions peers would want to participate. The region with the second largest number of participants is the East Coast with 14 (21%).The next two regions represented were the South and Mountain with seven (10%) and six (9%) credit unions respectively. Among the largest group, Midwest credit unions, there were no clear similarities in asset size, employees, or members. There was a large number of community credit unions located in mid-tier cities among this group but that is to be expected from the data discussed above. All of the East Coast credit unions participating were either SEG based (eight) or community (six). All but two of these institutions have a relatively high percentage of full-time staff of 85% or more. All have 25,000 or less in total members. No other clear similarities were found. All of the Southern credit unions have less than 25,000 members, less than 66 total employees, and a percentage of full-time staff higher than 85%. All but one are community credit unions. Four are located in a mid-tier city, while another two are in major metro-areas. There was a large range in asset size from $75 million to $220 million.

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How often is your bonus program reviewed, i.e. annually, every three years, as needed, other? If other, please explain. Among the 65 participants, 62 credit unions answered this question with nearly 60% (37) stating that their bonus programs were reviewed annually. The next largest group representing 14 institutions (23%) answered “as needed” while another nine responded with “other”. The remaining two credit unions review their bonus programs every three years. None of the respondents review their bonus programs every two years. Of the 37 credit unions that review their bonus programs annually there were no specific similarities in any of the categories discussed above. This suggests that of those institutions that offer a bonus program it tends to be the norm that it will be reviewed annually. Of the 14 credit unions that simply stated that the bonus program was reviewed on an “as needed” basis there were no distinct similarities with the possible exception of number of employees. All of these institutions employ less than 100 staff members. On the surface this might suggest that credit unions with a smaller staff size would be more apt to review their bonus structure less frequently. However, 12 of the 37 participants that evaluate their program annually have less than 30 employees. Therefore, the frequency of review based on staff size would not seem to be a reliable trend. Among the nine credit unions answering “other” one stated that the program has been the same for years and three others simply answered N/A. However, five institutions answered that they did not have a bonus program. Two of these five participants did state that they did offer incentives though. Somewhat surprisingly four of the institutions that do not have a bonus program are community credit unions and one is SEG based. One would assume that these credit unions would be focused upon growth and would utilize a bonus program to motivate certain behaviors in their staff. However, the SEG based organization and one of the community credit unions do offer incentives. The three credit unions offering no bonus or incentives are organizations under $120 million in assets that have fewer than 30 employees and 12,000 members or less. The two credit unions offering only an incentive program are $75 million institutions with less than 60 employees and 14,000 members. No other distinct trends were noticed. It could be surmised from the data that small credit unions are more apt to not offer a bonus program or to simply offer incentives but a sample of only five credit unions would seem to be too insignificant to make that statement.

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How involved is the board of directors in determining the bonus program, i.e. they determine the program, they collaborate with management, they approve management’s proposal, they are not involved, other? If other, please explain. Six credit unions did not answer this question. Meanwhile, 17 participants gave multiple answers. Nearly half (48%) of those answering the question stated that the board approves management’s proposal of the bonus program. A board and management collaboration was chosen by 30%. Of the remaining respondents 10% answered “other”, 8% stated that the board determines the bonus program, and only 4% claim that the board has no involvement in determining the program.

Among the 48% group, there were no discernible similarities or trends based upon the data discussed above. This would simply suggest that it is a norm among credit unions that management would present a proposal to their board of directors for approval or further review. While 27 of the credit unions participating chose only this answer, seven chose “collaborate with management” suggesting that the board would do more than simply say “yes” or “no”. In other words, the proposal would not merely be “rubber stamped”.

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The next largest section of respondents of 30% also showed no discernible similarities or trends based upon the data above. One possible minor correlation among these 21 credit unions comes in the area of size of staff as all of these institutions have less than 100 employees. This could suggest that there is more of a family style culture, rather than a corporate style culture, among credit unions with a smaller staff that lends itself to a higher level of collaboration with the board. However, other factors within this group such as region, asset size, number of members, etc. vary widely. An additional correlation would lead to a stronger conclusion of this theory. Of these 21 credit unions, 13 solely chose this answer while seven also chose “approves management’s proposal”. One credit union chose three answers, the two aforementioned choices and that the board determines the bonus program. As over 75% of the respondents chose either solely or a combination of the two answers of “collaborate with management” and the board “approves management’s proposal” it is reasonable to assume that credit unions between $75 million and $250 million in assets will generally have a high level of management involvement in the determination of the bonus program. This may not be a significant revelation as sound business practice would have management play a leadership role with the board in place for “big picture” oversight. There were no clear similarities among the six credit unions that solely or partially stated that the board of directors determines the program. One possible exception lies in that three of the four credit unions that answered 100% that the board determines the program are located in rural areas. However, that is much too small of a sample to make any assumptions with any certainty. There were no obvious trends among the remaining respondents. Of the remaining 10 credit unions seven answered a version of “other” while three stated the board was not involved at all in determining the bonus program. Does your credit union have one inclusive program for all levels of the organization or are there separate structures for management and non-management employees? A total of 55 credit unions answered this question with the result being almost an even split: 29 institutions stated that their bonus programs were all inclusive while 26 answered that they have separate programs for management and non-management employees. There were no discernible trends based on the data above for either group. One possible exception may be that 23 of the 29 institutions with one inclusive program for the entire organization have less than 60 employees. On the surface this could lend some credence to the theory of the “family” culture among credit unions with less staff in that an all-inclusive bonus program creates a sense of “we are all in this together”. However, given that nearly 80% of all respondents to this survey employ less than 60 people, this finding is difficult to substantiate. Furthermore, seven of the 26 credit unions that stated they implement separate bonus programs for management and staff have fewer than 30 employees.

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For management, our bonus program is based upon the following: (Circle all that apply) Earnings, Loan Growth, Membership Growth, Corporate Goals, Individual Performance, Other As expected, the majority of respondents answered with a combination of the choices given. A composite of the answers show the following overall basis for a management bonus program: 23% - Earnings 20% - Corporate Goals 19% - Loan Growth 14% - Membership Growth 14% - Individual Performance 10% - Other Not surprisingly more than 75% of management bonus programs are based upon key factors of financial health such as earnings, loan growth, and membership growth. It is assumed that corporate goals will include most if not all three of these factors. While individual performance is a component in management’s bonus among the respondents it is not only a low percentage but also only one credit union responded that individual performance is the only factor in determining the bonus. Of the 53 credit unions responding to this question, 16 participants responded that they base their management bonus program on one specific criterion. The highest number, five, base their program on corporate goals. This is aligned with the findings above. Four credit unions responded that they base management’s bonus purely on earnings. One uses only loan growth as the basis while another is on individual performance. The remaining four replied “other”.

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For non-management employees, our bonus/incentive programs are based upon the following: (Circle all that apply) Earnings, Loan Growth, Membership Growth, Corporate Goals, Product Growth, Individual Performance, Referrals, Satisfaction Ratings, Job Responsibilities, Other

Also as expected, in terms of non-management bonus and incentive programs, the majority of respondents answered with a combination of the choices given. A slightly higher percentage of those responding to this question chose a combination of factors rather than a sole criterion. A composite of the answers show the following overall basis for an employee bonus program: 19% - Individual Performance 14% - Loan Growth 13% - Earnings 11% - Corporate Goals 10% - Membership Growth 8% - Product Growth 7% - Satisfaction Ratings 6% - Referrals 6% - Other 5% - Job Responsibilities Unlike management bonus programs, incentives for employees are weighted more toward individual performance. Not surprisingly, the second highest category is loan growth as that is one of the primary drivers of financial health. Earnings, corporate goals, and membership growth round out the top five factors. There seems to be some alignment between employee and management bonus programs in that the top five criteria are the same. However, they are in a different order of importance suggesting that employee rewards are weighted more toward individual performance and management bonuses are based more on corporate or team success. Of the 52 credit unions responding to this question, 13 participants responded that they base their employee bonus program on one factor only. Three stated that the bonus is based on individual performance alone. However, three also base their program on corporate goals while another three answered “other”. Among the remaining four, two answered product growth, one answered earnings, and one answered loan growth.

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Are there tiers to your bonus program - for example threshold, goal, and stretch? A total of 47 respondents answered this question with 31 stating that they do offer a tiered bonus structure. There seemed to be only one discernible trend in that 12 of the 16 credit unions that did not implement a tiered structure have an all-inclusive program for employees and management. Meanwhile only 10 institutions with a tiered structure were all-inclusive. How often does your bonus program pay out, i.e. annually, semi-annually, quarterly, other? Of the 58 participants responding to this question 40 (69%) pay out a bonus annually. The only other significant category was just that “other” with 22% answering in this manner. Of the remaining credit unions, three pay out quarterly, one pays out monthly, and one pays out weekly. Among the 13 credit unions that answered other, the commentary given was related to different pay out timing for the separate management and employee bonuses. Nine of these respondents stated that the management bonus is paid out annually while employee rewards are paid out on a quarterly or monthly basis. Is any portion of the bonus payout at the discretion of management or the board or is the entire program set by specific and unchanging parameters? (Circle one) YES NO Of the 53 respondents to this question, only 17 responded that neither the board nor management had any discretion to change the program. This suggests that the majority of credit unions have some flexibility to change the bonus throughout the year given certain circumstances. However, 11 of the 17 do review the program on an annual basis and 12 have all-inclusive programs.

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Is your bonus program seen as a motivator to exceed goals among both management and non-management employees? (Circle one) YES NO Of the 56 respondents to this question all but 10 feel that their bonus program acts as a motivator. One credit union stated that their program is a motivator for employees but not for management. This credit union does have separate programs for the two groups with tiers. The expectation would certainly be that a bonus program if implemented properly would be a motivational tool. Eight of the ten credit unions stating that it is not are community credit unions. This is also surprising as these institutions are generally focused on growth. Fortunately, all but two of these credit unions review their programs annually and can possibly retool the program to create a higher incentive. Does your bonus program serve as an instrument in retaining key and high-performing staff? (Circle one) YES NO A lower percentage stated that their bonus program served as an instrument for retention. Only 36 of the 58 respondents claim that the bonus is a factor in keeping key and high-performing staff. This leads to a question of whether the incentives are insufficient or if other factors such as salary or culture serve as a better instrument among the other 22 credit unions for retention. Are periodic updates on the status of components of the bonus program communicated with staff, i.e. posted on the intranet or bulletin board, discussed during all staff meetings, reported during one-on-one meetings, etc.? (Circle one) YES NO All but 11 of the 54 respondents stated that the status of bonus components are communicated to staff on a periodic basis. All of the 11 credit unions that do not communicate progress on factors related to the bonus pay out annually or more frequently. One would assume that this group would also have a negative response to the motivator and retention questions but that is not the case as the percentages of “no” answers for each are 45% and 55% respectively. Is your bonus program truly aligned with your credit union’s culture and brand or is it solely an extension of your strategic plan alone? Please explain. Ten credit unions answered this question in the optimum fashion in that their bonus program is aligned with the brand, culture, and strategy. Another 22 respondents stated that bonuses are aligned with the strategic plan which is a common and acceptable practice. Twelve feel their incentives are tied properly to the credit union culture and brand.

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How often is your credit union’s bonus program updated, i.e. annually, every three years, after every strategic planning session, other? If other, please explain. The majority (71%) of respondents update their bonus programs annually. Given the answers to the earlier question of “How often is your bonus program reviewed,” it would be expected that 42 out of 59 credit unions would answer in this manner. It is somewhat surprising that only one credit union stated that bonus structures are updated in conjunction with their strategic plan. When reviewing and updating your credit union’s bonus program do you consider the following? (Check all that apply) Success of the program in conjunction with exceeding corporate goals, Management feedback, Employee feedback, Financial health of the organization, Other

Only five of the respondents stated that one lone factor provided the basis for updating the bonus program. Three stated that updates were solely made based upon the financial health. One said that the success of the program in conjunction with exceeding the corporate goals is the determining factor while the other attributes updates to management feedback. The majority of the participants, as expected, explore a number of factors when updating their bonus programs. The following is the overall breakdown of the factors: 30% - Financial health of the organization 25% - Success of the program in conjunction with exceeding corporate goals 22% - Management feedback 17% - Employee feedback 6% - Other

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Does your credit union employ multiple bonus/incentive programs for different departments, i.e. lending, business development, frontline, etc.? YES NO Of the 57 respondents to this question, slightly more than half answered that they do not employ multiple programs for different departments. Not surprisingly all 30 credit unions that answered “no” have fewer than 100 employees suggesting that the smaller the staff the less likely the need or desire for multiple programs. Fifteen of this group of 30 have all-inclusive structures. All 30 pay out their bonuses annually or more frequently.

CONCLUSIONS As inferred in the summary and comments on the responses, the small sample size and the slant towards a certain set of demographics make it difficult to determine trends and tendencies with great confidence. While the data provides a good beginning from a market-research perspective, further information from a larger and more diverse sample would be necessary. However, for credit unions that fall squarely within the sample – i.e. Midwest financial cooperatives with less than 25,000 members and fewer than 25 employees – some valuable information and validation can be gained. From a validation perspective, there were few surprises in the responses. The practice of conducting an annual review of bonus structures by more than half of the respondents was to be expected. The vast majority, over 70%, also update their structure on an annual basis. Reviewing bonus programs “as needed” by nearly a quarter of the survey participants was also anticipated as it was assumed that smaller institutions would stay with a program that is perceived to be working. However, based on this sample, there was no reliable correlation in that the fewer employees resulted in a lesser need to review a bonus program on an annual basis. Somewhat surprising was that five of the 65 credit unions participating did not offer a bonus program. That may seem like a small number on the surface but that still represents 8% of the total sample. If implemented properly, bonus programs can be one of the key drivers in proliferating the brand, enhancing the culture, and executing the strategy. While two of these five institutions do provide incentives to frontline employees, even eliminating them represents 5% of the sample that do not offer any type of variable pay. Over 75% of respondents reported a high level of management involvement in the determination of the bonus and incentive structures. This was to be expected as it is the board’s responsibility to provide guidance and oversight while it is management’s job to lead the institution. Only 8% stated that the board of directors controls the process of determining the bonus structure. From the data, one could assume that boards of rural credit unions would be more apt to control the process. However, the sample size is too small to state this assumption with any confidence.

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There was no true distinction in a preference for an all-inclusive program for management and staff versus two separate structures as the sample was split almost evenly down the middle. While at first the data seemed to suggest that the fewer employees the more apt an institution would be to have an all-inclusive structure. Given the characteristics of the sample and upon further examination, this assumption could not be substantiated. Over 25% of the participants with less than 30 employees implement separate structures for management and staff. There was some mild correlation in that credit unions with fewer employees were less likely to implement multiple programs for different departments, i.e. a separate program for business development, lending, frontline staff, etc. Not surprisingly more than 75% of respondents base their bonus program on key factors of financial health such as earnings, loan growth, and membership growth. Most also implement a tiered structure. Tiers are generally a wise practice as it allows the team to divide goals into stages rather than viewing them as one large and audacious whole. Also as expected, in terms of non-management bonus and incentive programs, the majority of participants base their structures on a combination of factors rather than a sole criterion. While there could have been some confusion in the question as to how often bonuses are paid, it would seem safe to assume that the majority of credit unions will pay out a bonus on an annual basis while incentives will be paid more frequently. It is a commonly accepted practice that individual incentives, such as sales commissions, will be provided on a weekly or monthly basis. This is based on the axiom that providing the compensation as close in timing to the completion of the rewardable action creates greater motivation. As expected the vast majority of respondents felt that their programs served as a motivator for staff. Although still a majority, a lesser number reported that the bonus and/or incentives served as a tool for retaining key staff. More data would need to be obtained to determine why there wasn’t a better correlation between motivation and retention. An assumption could be made that other factors, such as salary or upward mobility, play a greater role in retention but that cannot be fully determined from this data. It was assumed that most survey participants that offer bonuses and incentives would report on a regular basis key financial data and accomplishments that provide the foundation for these programs. This was the case but still 11 out of 54 (20%) stated they did not provide this information to staff. This is rather surprising as a key component to employee engagement is involvement and communication. Employee engagement is also critical in creating alignment among the brand, culture, and strategy of an organization. To that end only ten respondents stated that their programs were based on all three aspects. Aside from the sample size of this project, this seems to be the norm as the interconnectivity of the brand, culture, and strategy isn’t commonly discussed during planning sessions or board and management meetings.

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Finally, as expected, when reviewing and updating bonuses and incentives for the coming year, the respondents take multiple factors into account. The leading factors of course being the financial health of the credit union and the success in exceeding goals. Although lesser percentages, management and employee feedback do come into play as well. Again, while the sample size of this survey project may not lend itself to determine key trends among the industry, the data does provide some validation in regards to the implementation of bonus programs among credit unions employing less than 60 employees. Here are some key takeaways from the report for credit unions that match the demographics of this study:

1. Most credit unions do implement a bonus program. Therefore, it is a wise practice to have one and to update the structure on an annual basis.

2. Management should be the driver in the process of implementing bonus and incentive programs. The board may provide some guidance as well as ensure that the structure is aligned with the brand, culture, and strategy.

3. Whether an all-inclusive program or separate structures are implemented is not determined by the size of the institution. It is more important that the programs, whether single or multiple, are properly aligned with the unique brand, culture, and strategy of the institution.

Bator Training & Consulting, Inc. and Staley

Credit Union sincerely thank all survey

participants for their feedback and

participation.