Managing Staff: Taking Care of Those Who Take Care of Our Clients

1. Managing Staff:Taking Care of Those Who Take Care of Our Clients MRS. VIVIAN V. LIM HRD, Kapatagan Valley Bank MABS Roundtable Conference Marco Polo Hotel April 26-27, 2005

2. Kapatagan Valley Bank • Start of banking operations 1956 • Start of microfinance operations 1999 • No. of branches 12 (3 branches were opened in 2004) • No. of branches implementing MABS microfinance operations 9 • No. of bank personnel 196 • Head office support staff 30 • No. of microfinance Staff 29

3. Micro-Finance Operations • Total microcredit clients as of Dec. 2004 1,898 • No. of Account Officers 21 • Total microloan portfolio P 23.836 M • Average loan portfolio per AO P 1.135 M • Portfolio-at-Risk, over 30 days P 183,176 • PAR Ratio, over 30 days 0.77 % • Microloans / total loans 3.68 % • Microlending staff / total bank personnel 14.80 %

4. Board of Directors President Compliance Officer Human Resource Director Vice-President- Operations Internal Auditor Board Secretary AVP-Operations Executive Asst. to the President MIS Coordinator Micro- Finance Manager Branch Managers Cash Officer Chief Accountant Credit Officer AVP-Collect-tion Loans & MFU Supervisor General Bookkeeper Cashier Account Specialist Loans Assistant Loans & MFU Bookkeeper Teller ORGANIZATIONAL STRUCTURE

5. HIRING PROCEDURES Preliminary Interview Test for Higher Cognitive Processes Post-Exam Interview Basic Banking Operations Training Job Assignment (Probationary) Assessment & Recommendation Regularization

6. Hiring & Training Account Officers • New Account Officers must pass through the regular hiring procedures • “Buddy System” with Training Coach in the Field • Background investigation prior to hiring or regularization • Can handle new accounts on the third month of training • Attend trainings during the MFU Quarterly Forums

7. In-House Seminars, Workshops &Trainings • Basic Banking Operations for Newly Hired Staff • Microfinance Forum & Trainings with One-on-One Coaching • “Revisiting the Bank Operations” Workshops • “How To’s” For Managers • “Boss din Ako” Training for Asst. Managers

8. In-House Seminars, Workshops &Trainings • Cash Operations Integration/Articulation • Seminars & Workshops on Loan Procedures & Credit Management • “Lahat Tayo Ahente” • Team Building • Leadership Trainings

9. In-House Seminars, Workshops &Trainings • Bookkeepers’ Workshop • Internal Control • Customer Service • MIS Training/ PC Banker User’s Forum (done by clusters) • Seminar on PowerPoint Operation • General Services & Security Personnel Training/Seminar

10. Other Trainings & Exposures. . . • Basic Rural Banking Course - almost all regular employees have attended the BRBC, especially those with over 2 yrs. of service • MABS Refresher Courses, MABS Supervisors’ Forums & other MABS workshops - MFU staff take turns attending the sessions conducted by MABS with a minimum of two participants per activity. • Leadership trainings conducted by government agencies • MIS maintenance training for IT staff

11. Presentations & Debriefs Bank personnel are required to present on what they learned from the various training/workshops, usually during the next departmental meeting/seminar or during MFU meetings. Training materials are handed in and the HR Department coaches the trainee on how to do it. Emphasis is given to what needs to be done to improve the bank’s operations.

12. Staff Incentives & Benefits • MFU Performance Incentive Program AO’s are assessed based on the No. of Accounts, Portfolio at Risk, No. of Loans Disbursed & Total Loan Portfolio. • Meal Allowance Upon reaching a minimum of 50 accounts. • 60/40 Motorcycle Program AOs have the option to own their assigned motorcycle by paying 40% of the acquisition cost. • Insurance Coverage • Bonus Program Same as the regular staff.

13. Common Problems with Account Officers • Absences due to sickness • Resignation • Non-adherence to standard procedures • Kiting of remittances/ non-remittance of collections • “Soft” Collectors • “Lawyering” in favor of the client

14. Challenges in Handling Account Officers • Hiring of New Account Officers • Training New AO’s • Transfer of AO’s to new branches • Selection of MFU Heads/ Supervisors • Performance Monitoring vs. Incentives • Capability Building of AOs/ Individual Assessment of Training Needs • Handling Errant Account Officers

15. Letting Go . . . • Bakit sila umalis: • Health reasons • Transfer to a government post • Di kaya ang trabaho • Bakit sila pina-alis: Use of bank funds/ dishonesty

16. Assessing Employee Performance • Assessment Instruments 1. Performance Rating Sheet A bi-annual evaluation done by the managers based on performance, work attitude, skills, adherence to procedures and flexibility towards tasks at hand. 2. Manager’s Assessment Line staff evaluates the performance of their managers- both their strengths and weaknesses, leadership qualities and adherence to standard banking procedures. • Promotions Employees who are outstanding performers are promoted to manager-trainees, loans supervisors, or to a senior status depending on their areas of expertise.

17. Staff Evaluation • Regular performance evaluation by the managers and supervisors • Quarterly review of accounts - Internal Audit - Micro - Supervisor’s Review • Annual salary adjustments are based on performance ratings given by the managers