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Peer Coaching Helps WFS Financial Curb Turnover

January 28, 2005
Related Topics: Featured Article, Training & Development

The numbers showed a troubling trend at WFS Financial Inc., one of the nation’s largest independent auto-finance companies. Employee turnover had risen steadily for three consecutive years, reaching 32.75 percent by the end of 2003 and costing approximately $5 million annually.

    No place seemed in more trouble than the regional collection center in suburban Dallas, where associates call people who have fallen behind on paying their car loans. Forty-two percent did not feel valued, according to an employee survey. Annual turnover had reached almost 48 percent. And rising absenteeism indicated that some associates hadn’t quit but had stopped giving their all. "There was a lot of negativity," says Lindsay Crawford, a loan service counselor at the time and now a credit analyst. "People were out for themselves, and that was it."

    WFS isn’t the only company grappling with discontented workers. Only 17 percent of employees are "highly engaged," adding discretionary effort to their work, according to a workforce study by consulting firm Towers Perrin. One out of five employees is "disengaged"--present physically but absent psychologically.

    At WFS Financial, a subsidiary of Westcorp, executives recognized the problem and strove to address it. The regional collection center got a new manager, replacing an autocratic one with someone who welcomed employee participation. Managerial training emphasized how bosses affect the happiness of subordinates.

    But the centerpiece of efforts at the regional collection center was a peer-coaching program. Executives hoped that loan service counselors in thecall center would take more responsibility for their own satisfaction and find ways to achieve their career goals within the company. The result: Turnover fell to 21 percent, saving $528,325 in 2004. Business results increased, with the number of charge-offs falling to 2.5 percent by August 2004 compared with 5.13 percent in October 2003.

    "Overall, they as management were open to our concerns and our ideas and actually took it seriously, which was the key to the whole thing," Crawford says. "It took a lot of effort on both parts--management and associates."

Building "precious equity"
    WFS launched the program, designed by consulting firm Career Systems International, with a half-day workshop in October 2003 where loan service counselors were assigned randomly to groups of three called Talent Teams. They heard how workplace satisfaction depends not just on the efforts of managers but of employees, too. And they went through what CSI founder Beverly Kaye has dubbed the "Four Fs":

  • Face Up, which told employees that they’re responsible for their own workplace satisfaction and they need to take charge.

  • Focus In, which suggested that participants could find what they seek within the organization. They’re told to decide what they want and look internally for it.

  • Forward March, where participants set goals and strategize how to achieve them.

  • Follow Through, where teammates agree upon norms for their meetings, learn how to run them and receive guidance for ways to take action.

    Employees also conducted what Kaye calls "an equity review," assessing what they have invested in their current jobs. They considered skills that have been developed and are valued in the organization, friendships and other relationships developed through their jobs, influence they wield internally, and financial equity tied to their current employer such as retirement plans.

    "Everybody builds precious equity in their current jobs," says Kaye, who based the workshop on Love It, Don’t Leave It: 26 Ways to Get What You Want at Work, a book she co-authored with workplace consultant Sharon Jones-Evans. "When you look for greener pastures, you forget what you have already built. We try to educate them about what they already have built."

    Talent Teams met once a month, on company time, for three months. Teammates vented, helped one another solve problems and exchanged tips. "What was amazing to us was that peers, when given the opportunity, don’t just whine," Kaye says. "The whining eventually goes away and it moves to ‘How can I help you out of my own experience?’ The more that we build coaching of one another inside an organization, the more we can help organizations learn and the more we can use individuals themselves to help withretention and some of the development issues that managers don’t have the time or the energy to move to."

    Kathy Kram, professor of organizational behavior at Boston University School of Management, describes peer coaching as an underused but valuable method. She has researched "developmental networks"--concurrent relationships such as those with bosses, friends and even subordinates who help with career development. Traditional mentoring or coaching is more limited, she says, because, among other reasons, it only one provides one person’s perspective.

Is there chemistry?
    At WFS, managers fought their impulses to guide the teams. They didn’t tell theteams when, where or how long to meet. Executives also reinforced the message of responsibility through their actions.

    In one instance, after an employee quit, the two remaining teammates then met with the manager of the regional collection center and his boss, Mark Beedlow. "We said, ‘You guys lost one of your teammates. What could you have done to prevent that? What did we do wrong as leaders and managers?’" says Beedlow, regional business center manager. "We pushed the accountability of that associate leaving the organization back on those two people. When we started interviewing to replace the person we lost, we included those individuals. We asked them, ‘Do you think this person is a good fit for us?’ ‘Is there going to be chemistry there?’ So it really created some ownership for those people."

    Executives also have been given incentives to make the program succeed. Beginning in 2004, Beedlow and his management team could earn a bonus of 5 percent of their base salary for decreasing turnover, among other bonus criteria.

    The peer-coaching program has been tweaked based on feedback provided to Sheri Spangler, assistant vice president of associate relations. Loan service counselors eported better teamwork and communication. They also were pleased that they were collecting more payments from delinquent accounts, which helps employees earn bonuses. Back when turnover was peaking, new employees would interrupt more experienced peers, slowing the production of the most talented collectors and driving down overall productivity.

    But employees also said they did not get enough direction for their first meetings and encountered at least one supervisor who rolled his eyes at the mention of Talent Team meetings. So as WFS launches the program in three more states, Spangler says new teams are receiving more guidance for their first meeting and supervisors are receiving training simultaneously as associates, not after them, to ensure they don’t squash enthusiasm. "This was not management driven," Spangler says. "This was associate driven."

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