pyramid with the sun shining through and gold undertones

What Banks Can Learn from Maslow's Hierarchy of Needs

March 2016

A A A

A consistent buzzword among bankers and regulators these days is "culture." Not only can a good organizational culture avoid the types of imprudently risky practices that precipitated the financial crisis, but building a great culture also has the potential to widen profit margins and improve sales.

The objective of building a better culture can be daunting. But banks have a tool at their disposal for improving the health of their organization that, while counterintuitive, could not be a simpler concept: making their people happier.

Utilizing positive psychology on their employees may sound blasphemous to banks looking purely at outcomes and building better processes. The mood of your business line people will not necessarily improve the customer experience or result in the best banking products. But while focusing on processing and products is important, their success is ultimately dependent upon people to actually execute those processes.

Consider Maslow's Hierarchy, Abraham Maslow's psychological theory of what motivates humans. His theory dictates that, once a person's basic psychological and safety needs are met, he or she will develop a need to belong, then get respect and then ultimately realize his or her full potential. That last stage has the potential to affect a bank's bottom line.

For example, while senior managers are responsible for ensuring that a bank's process for opening checking accounts is efficient – utilizing up-to-date technology – a bank employee will likely get involved at some point in the process.

If financial institutions focus on helping employees feel engaged and a part of something important, the results can be significant. People who feel they belong are generally happier. When people are happier, they are more likely to do their jobs with enthusiasm and to spread that positive feeling to others, including customers. Happy people are also less likely to leave for another job. Generally speaking, the longer employees stay at their jobs, the more they improve.

Like any business, the health of a financial institution begins with the people who work there. Here are six tangible steps tried recently by a midsize bank to up the happiness meter among its rank and file:

Sharing the strategic plan with everyone

The bank at every level of management leads a discussion about where the institution is headed, including talk about how the employees fit into that big picture. Employee feedback is used to create local versions of the strategic plan with each team and geographic location.

Hosting quarterly calls for all employees

The institution regularly holds calls to explain bank objectives and to relay a status update on meeting those objectives. It also recognizes heroes in the organization and reinforces the values that are really important to the bank as a whole. 

Conducting regular employee surveys

The bank conducts an employee survey every 18 to 24 months. The regular surveys provide management with early warnings signs on potential workplace problems dealing with strategy, compensation, recognition and other issues. The survey results could indicate whether or not employee engagement is weakening, and enable management to work on solutions sooner rather than later.

Including employees in key strategic decisions

Employees are consulted on new initiatives, process or process improvements. This helps ensure that ideas generated are actionable, that there is buy-in from business line people who will actually implement a strategy, and that the bank is recognizing employees for their roles in executing an initiative.

Using a "feedback button"

The bank created a feature where employees can submit suggestions. In 2015, employees submitted nearly 200 suggestions and roughly 40% of those suggestions were implemented.

Providing Career Path Programs

As a result of one employee survey, the bank has created outlets for employees to get advice on how to advance in their careers. This can include plotting out the necessary steps to reach a desired position. This empowers employees to own their careers with the bank supporting their goals. 

 

This article was written by Marion Crawford from American Banker. This reprint is supplied by BNY Mellon under license from NewsCred, Inc.  

BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may be used as a generic term to reference the corporation as a whole and/or its various subsidiaries generally.  This material does not constitute a recommendation by BNY Mellon of any kind.  The information herein is not intended to provide tax, legal, investment, accounting, financial or other professional advice on any matter, and should not be used or relied upon as such.  The views expressed within this material are those of the contributors and not necessarily those of BNY Mellon.  BNY Mellon has not independently verified the information contained in this material and makes no representation as to the accuracy, completeness, timeliness, merchantability or fitness for a specific purpose of the information provided in this material.  BNY Mellon assumes no direct or consequential liability for any errors in or reliance upon this material.