Guidelines

Guidance on Standard 5B

Imp-Act Guidance Note on Staff Incentives

This briefing frames the key questions to consider when reviewing a financial service provider's (FSP's) staff incentive system. It then identifies some emerging practices that FSPs are finding helpful in ensuring that the staff incentive systems appropriately balance their social and financial performance objectives.

Balanced Incentives for Frontline Staff: A Tool for Financial Institutions

This tool considers staff incentive system design from one specific viewpoint—ensuring that clients are not harmed due to flawed staff incentives. The tool discusses the importance of balanced incentives, meaning incentives that balance financial performance (e.g., portfolio growth) with strong client protection practices (e.g., respectful treatment of clients). FSPs can use this tool to improve their own incentive system for frontline staff.

HR Development Practices in the MF Sector

The survey is an important tool to update the state of HR practices in the sector by assessing how far institutions use HRD as a strategic instrument for managing social and financial performance and filtering out good practices as well as gaps in HR practices. It was designed to allow participant institutions to understand their current state of HR practice and gain insight into alternative approaches that contribute to social and financial performance.

Tools and Templates

Performance Planning and Management Module: Grameen Foundation Human Capital Hub

PPM is a process to align employee goals to the organizational goals. This multi-part toolkit focuses on: 1) objective goal setting so that every employee receives direction and communication about what they are expected to do, and 2) on action plans, personal development, and ongoing discussions about organizational goals. It includes practical tools such as worksheets on setting goals and evaluating performance with different employees (e.g., field officer, branch manager) and a manager’s guide to delivering feedback on employee performance.

Total Rewards Module: Grameen Foundation Human Capital Hub

“Total rewards” refers to the financial and non-financial return provided to employees in exchange for their time, talents, efforts, and results. This toolkit discusses how to develop a reward system to motivate employees to achieve the institution’s social and financial goals, and it includes practical tools such as incentive plans and merit increase guidelines.

A Toolkit for Designing and Implementing Staff Incentive Schemes

This MicroSave toolkit provides practical guidance on creating staff incentive schemes that are fair and transparent.

Staff performance appraisal form (FINCA Azerbaijan)

FINCA's management determines appropriate standards of performance for locally hired employees. These standards of performance are established to ensure that positions are performed satisfactorily according to job descriptions and performance plans and so that employees are formally appraised three times during the first year of employment—3 months, 6 months and annually—and semi-annually thereafter. In addition, FINCA employees receive informal reviews and feedback regarding job performance on a continual basis. Merit increases and promotions are directly related to the performance appraisal process.

VF Azercredit's Code of Ethics and Business Conduct

This policy, which applies to all employees and the Board of Directors, details the provider's expectations for ethical conduct when dealing with clients and other employees.

Case Studies

FinDev Azerbaijan: Retaining key staff through a “pay for performance” culture

This case study provides a practical overview of the process of developing and implementing FinDev’s staff performance appraisal system and salary compensation scheme (including that of senior management). Written by the AMFA Network as part of the MFC SP Fund project.

Visión Banco: Creating a comprehensive staff training program

The case of Paraguayan bank Visión Banco highlights how a provider can implement a comprehensive staff training program. Staff expansion created a clear need for a corporate training (VB University) program that would allow new staff to receive a comprehensive orientation to the bank, as well as providing existing staff with opportunities to improve their existing skills.

VF Azercredit's Code of Ethics: Putting Values Into Practice

This case study describes how the provider developed their Code of Ethics, trained staff on the Code, and integrated it into their operations, including internal audit and staff evaluation.