For banks and credit unions, the performance review is a staple of conventional management. But in a time when so many conventions are rapidly changing, the financial industry must now rethink how it will review its employees in ways that are more inclusive and also create a better environment for the future.
This is particularly true in banking, where older white men fill most top managerial slots and (often unconsciously) groom up-and-coming employees who look like them. Hence, women, people of color and other less-represented groups are often working at an inherent disadvantage.
One basic change has been to mandate recruiting aimed at building a more diverse workforce and then better managing the career path for those employees, according to Ellen Zimiles, partner and leader of financial services advisory & compliance at Guidehouse, an international advisory and consulting firm.
Zimiles says banks and other financial services organizations often succeed in creating a better-performing, diverse employee base by “providing [new employees] with a sponsor who is accountable to be bringing people through and to introduce them around the organization.” These mentorships work best when the sponsor is “senior enough to know how to be efficient and how to be accountable.”
Some opt to keep traditional performance reviews and tweak them to meet new goals. “Higher-performing banks seem to have the basics down, such as clear goal-setting tied to purpose, strategy, and outcomes; frequent feedback, including manager training and accountability; clear criteria for performance against the goals; regular formal checkpoints at the mid-year and year-end; and a connection between results and rewards,” says Neil Walker-Neveras, chief talent officer for M&T Bank, a multi-state community bank with more than 690 locations on the East Coast.
“These things may feel stodgy, but they work. I call them the ‘necessary but not sufficient’ elements,” Walker-Neveras adds. “And while I am usually the first person to sign up for something new, I am a little skeptical of the trend to blow it all up just for the sake of trying something new.”
Widening the spectrum
If a bank truly wants to expand its employee pool and its management track – and importantly, engage employees who might be female, nonwhite, younger or generally different than most of the existing managers – it needs to look at its mission, vision, values, and strategic goals and objectives, says Julia A. Johnson, director of organizational performance for Milwaukee-based consulting firm Wipfli.
“It is one thing to state and outline your values and objectives – it is another to bring them to life through words and actions that are lived each day within the bank, particularly when it comes to diversity and inclusion,” Johnson says. “It is difficult for individuals who have not had direct experiences of being part of an underrepresented employee population to understand and relate to those challenges.”
She points out that “it takes self-awareness and proactivity of management to gain understanding of the significant benefits of having a diverse workforce. Unless the bank seeks to first understand its stated and unstated culture of inclusivity, it will be hard-pressed to cultivate sustainable change through a modified performance management process.”
Pete Cherecwich, president of asset servicing at Northern Trust, has 13 direct reports while overseeing more than 10,000 employees. He still conducts a formal, twice-yearly performance review for his direct reports. But he is also engaging his employees through virtual town halls that offer advice on how to perform better and move up. “No one ever actually tells you how to stand out compared to the person next to you,” he says. “We’re trying to get everybody to stretch themselves.”
Johnson says effective performance management is a continuous process within which the employee is a fully engaged participant.
“An employee’s responsibility will be to engage in proactive discussions with their supervisor to express interest in growing their career, exploring other opportunities and identifying what activities and learning opportunities are needed to achieve career goals,” she says. “The bank’s responsibility is to identify growth, development and career-pathing opportunities and make connections for employees within the bank to understand what it will take to advance. Gone are the days where the employer solely manages the employee’s career path.”
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