PeerViews Back Office Incentive Results FINALBackground 7/24/2015 The Back Office Incentives survey was the third survey issued under STRATMOR’s new PeerViews program PeerViews is

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7/24/2015

STRATMOR PeerViewsBack Office Incentive Structures

STRATMOR PeerViews ‐ Proprietary and ConfidentialNot for external distribution

Contents

7/24/2015

Background Key Findings and Conclusions Detailed Findings

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Background

7/24/2015

The Back Office Incentives survey was the third survey issued under STRATMOR’s new PeerViews program

PeerViews is a fast turnaround small‐survey program that gives senior mortgage executives a unique way to obtain specific qualitative mortgage industry information about: What senior executives at other companies think about issues and significant

new industry developments. What actions they are considering, planning or have taken.

This PeerViews Back Office Incentives survey was launched on May 13 and remained open until May 31, 2015. Invitations were sent to 1,987 individuals representing 994 unique lenders. Responses were received from 122 unique lenders (a 12% response rate).

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Summary of Key Findings

7/24/2015STRATMOR PeerViews ‐ Proprietary and ConfidentialNot for external distribution

71% of all respondents currently offer some form of incentive or variable based compensation to their fulfillment (processors, underwriters and closers) and/or production support personnel (post‐closers and shippers). 59% of the 71 responding Bank lenders offer incentive compensation 88% of the 51 responding Independent lenders offer incentive compensation

Overall, lenders include incentive compensation components in their compensation plan for fulfillment personnel much more frequently than they do for production support personnel. 61% of lenders offer individual dollar volume or unit throughput based incentives to processors; 37% to

underwriters and 41% to closers versus 20% to post‐closers and 16% to shippers. 24% of lenders offer explicit non‐dollar volume or unit based incentives to processors; 20% to

underwriters and 16% to closers versus 8% to post‐closers and 7% to shippers.

For both Banks and Independents, processor compensation, in particular, is likely to have an incentive compensation component. 84% of Independents pay their processors dollar‐volume/unit throughput based incentives versus 45%

for underwriters and 57% for closers. For Banks, the correspondent percentages are 45% for processors, 31% for underwriters and 30% for

closers.

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Summary of Key Findings (cont’d)


Lenders offering volume/throughput incentives typically require that back office personnel, especially fulfillment personnel, meet a productivity threshold before they can receive an incentive. Overall, 71% of lenders have a productivity threshold for processors; 73% for underwriters; and 54% for closers. For Banks, the corresponding percentages are: 84% for processors; 77% for underwriters; and 71% for closers. For Independents, the corresponding percentages are: 60% for processors; 70% for underwriters and 41% for

closers.

Lenders paying volume/throughput incentives after a threshold is reached generally pay the incentive back to the first dollar or unit as opposed to paying on dollars or units beyond the threshold. Overall, 74% of lenders paid processor individual incentives back to the first dollar or unit; 61% for underwriters;

and 59% for closers. For Banks, the corresponding percentages are: 67% for processors; 59% for underwriters; and 60% for closers. For Independents, the corresponding percentages are: 81% for processors; 63% for underwriters; and 58% for

closers.

Overall, for almost every back office position, dollar volume or unit throughput incentives tend to be flat versus tiered incentives; however: Banks favor tiered incentives, e.g., 47% of processor dollar volume or unit throughput incentives are tiered vs.

31% flat. Independents favor flat incentives, e.g., 53% of processor dollar volume or unit throughput incentives are flat

versus 30% tiered.

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Overall, lenders showed a strong preference for paying dollar volume or unit throughput incentives ‐ whether for individuals or teams ‐ on a monthly basis for virtually all back office positions; however: Independents’ were much more likely to pay monthly than were Banks, e.g., 95% of Independents

that paid dollar volume or unit throughput incentives paid them to processors monthly vs. 74% for Banks.

Unlike Independents, who virtually never have quarterly or annual payout components in their dollar volume or unit throughput incentives, Banks make substantial use of quarterly and/or annual payouts.

These differences reflect, we think, some of the cultural differences between Independents and Banks, with Banks less prone to “immediate gratification” compensation and more inclined to value consistency in performance.

Overall, explicit non‐dollar volume or unit throughput incentive factors are dominated by error rate and service factors (i.e., average borrower satisfaction and cycle times). Independents include cycle times much more frequently than Banks as regards incentive

compensation for fulfillment personnel. This may reflect their typically higher mix of “must‐close‐on‐time” purchase loans and a tendency to equate service with productivity.

Banks, on the other hand, use average customer satisfaction scores much more frequently as regards incentive compensation for both fulfillment and post‐closing personnel. This reflects, we think, concern for the broader product relationship that Banks have or desire to have with their mortgage customers.

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Overall, volume/ throughput based incentives are paid without regard to non‐volume/throughput factors by a fairly wide margin, especially for fulfillment personnel. This is surprising since we believe that high volume/throughput at the expense of loan quality and

customer service is a bad bargain in the longer‐run.

Banks, however, appear to be more inclined to link volume/throughput performance with loan quality, service and borrower satisfaction factors. These linkages take a variety of forms, e.g., a volume/throughput incentive is not paid unless threshold loan quality/customer service goals are met; or, the volume/throughput incentive is tiered based on loan quality/customer service scores.

Fewer than 20% of lenders are considering incentive‐related changes to their existing compensation plans, except for individual fulfillment personnel. For individual fulfillment personnel, 56% of lenders are considering changes for processors and

42% for closers.

Because fewer Banks currently have incentive compensation for their fulfillment personnel, the proportion Banks considering starting such incentives is roughly twice that of Independents

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How would you describe the ownership of the company?

7/24/2015

For purposes of analysis, Builder / Realtor Affiliated responses have been combined with the responses of Independent lenders and Credit Unions have been combined with Banks; therefore:

o Out of 122 respondents, 41% are analyzed as Independents/Realtors/ Builders and 59% as Banks/ Credit Unions.

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Which best describes the states in which you originate loans?

7/24/2015

Roughly 50% of the respondent lenders originate loans out of 10 states of less; 25% out of 11 to 40 states; and the remaining 25% out of more than 40 states.

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In which channel(s) does your company do business?

7/24/2015

59 lenders originate loans out of a single channel, with 55 of those lenders originating retail.

Of the 63 lenders that originate out of more than one channel, 60 of these lenders originate out of a retail channel.

For multiple‐channel lenders, the remaining channels include consumer direct, broker and correspondent in roughly equally.

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What was your origination volume across all channels for 2014

7/24/2015

Across all channels, 57% of lenders originated $1 billion or less; 31% between $1 and $5 billion, with the remaining 12% originating over $5 billion.

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Does your compensation plan for any of your company’s fulfillment and production support personnel include an incentive or variable‐based component?

7/24/2015

87 respondents (71%), offer incentive compensation to their fulfillment and production support personnel.

Of the 71% that do, Independent lenders are more likely (88%) than Banks/Credit Unions to have incentives for fulfillment and Production Support personnel.

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If you answered no to the previous question, which best describes your company's stance on fulfillment and production support incentives?

7/24/2015

Of the 35 lenders that currently do not offer incentive plans to their back office personnel, 4 lenders are currently in the process of doing so with an additional 14 considering incentive plans for the future.

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Which of the following are part of your incentive‐based compensation for fulfillment and production support personnel?

7/24/2015

Incentive compensation plans are much more common among fulfillment versus production support personnel. On a relative basis,

Independent lenders are significantly more likely than Banks to have volume/throughput based compensation and, where they do, combine it with explicit non‐volume based incentives.

Processor compensation, in particular, is likely to include an incentive compensation component.

Dollar volume or throughput based incentive compensation is the most common individual component.

While dollar volume or throughput incentives are common components of team compensation, non‐volume based incentives are also common within team incentive compensation.

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Processor Individual

Processor Team

Underwriter Individual

Underwriter Team

Closer Individual Closer Team

Post Closer Individual

Post Closer Team

Shipper Individual Shipper Team

Dollar volume or throughput (units) based incentives

75 20 45 15 50 22 25 13 19 13

Explicit factors other than volume or throughput based incentives

29 12 24 10 19 11 10 6 9 6

Discretionary factors 11 3 17 5 11 4 10 3 7 3

Dollar volume or throughput (units) based incentives

61% 16% 37% 12% 41% 18% 20% 11% 16% 11%

Explicit factors other than volume or throughput based incentives

24% 10% 20% 8% 16% 9% 8% 5% 7% 5%

Discretionary factors 9% 2% 14% 4% 9% 3% 8% 2% 6% 2%


Processor Team


Underwriter Team



Post Closer Team


Dollar volume or throughput (units) based 43 12 23 8 29 12 17 9 13 8Explicit factors other than volume or throughput based incentives

10 5 11 6 9 5 6 4 6 3


Dollar volume or throughput (units) based 84% 24% 45% 16% 57% 24% 33% 18% 25% 16%Explicit factors other than volume or throughput based incentives

20% 10% 22% 12% 18% 10% 12% 8% 12% 6%



Processor Team


Underwriter Team



Post Closer Team


Dollar volume or throughput (units) based 32 8 22 7 21 10 8 4 6 5Explicit factors other than volume or throughput based incentives

19 7 13 4 10 6 4 2 3 3


Dollar volume or throughput (units) based 45% 11% 31% 10% 30% 14% 11% 6% 8% 7%Explicit factors other than volume or throughput based incentives

27% 10% 18% 6% 14% 8% 6% 3% 4% 4%


# of Responses

% of Total Bank Respondents (71)

Bank Owned/Affiliated Mortgage Company

Total Respondents

Independent Mortgage Company

# of Responses

% of Total Respondents (122)

# of Responses

% of Total Independent Respondents (51)


If volume or throughput based incentives are part of your incentive plan, does the plan require that a volume or throughput threshold be reached before paying out an incentive?

7/24/2015

Overall, most individualcompensation plans for fulfillment personnel pay incentives after a volume or throughput threshold is reached.

For fulfillment teams, however, only half of the lenders require that a dollar volume or throughput threshold be reached as a condition of paying out an incentive.

Between Banks and Independent lenders, Banks were much more likely to pay incentives only after a threshold dollar volume or throughput level is reached.

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Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Yes 53 13 33 8 27 11 10 5 8 6No 22 7 12 7 23 11 15 8 11 7N/A 47 102 77 107 72 100 97 109 103 109

Yes 43% 11% 27% 7% 22% 9% 8% 4% 7% 5%No 18% 6% 10% 6% 19% 9% 12% 7% 9% 6%N/A 39% 84% 63% 88% 59% 82% 80% 89% 84% 89%


Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Yes 26 5 16 3 12 4 6 2 4 2No 17 7 7 5 17 8 11 7 9 6N/A 8 39 28 43 22 39 34 42 38 43

Yes 51% 10% 31% 6% 24% 8% 12% 4% 8% 4%No 33% 14% 14% 10% 33% 16% 22% 14% 18% 12%N/A 16% 76% 55% 84% 43% 76% 67% 82% 75% 84%


Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Yes 27 8 17 5 15 7 4 3 4 4No 5 0 5 2 6 3 4 1 2 1N/A 39 63 49 64 50 61 63 67 65 66

Yes 38% 11% 24% 7% 21% 10% 6% 4% 6% 6%No 7% 0% 7% 3% 8% 4% 6% 1% 3% 1%N/A 55% 89% 69% 90% 70% 86% 89% 94% 92% 93%


# of Responses

% of Total Bank Responses (71)

# of Responses

% of Total Responses (122)


# of Responses

% of Total Independent Responses (51)


If volume or throughput based incentives are part of your incentive plan, does the plan require that a volume or throughput threshold be reached before paying out an incentive?

7/24/2015

As might be expected, most volume or throughput based incentive plans require that a threshold be reached before paying an incentive to fulfillment personnel.

For post closer and shipping personnel, where such volume/throughput incentives are far less common, most did not require a threshold to be reached:

STRATMOR believe that peak period pressures on fulfillment elevates the importance of volume/ throughput productivity.

Percentage wise, where a volume/throughput incentive is provided, Banks are significantly more likely to require that a threshold be met.

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Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Yes 53 13 33 8 27 11 10 5 8 6No 22 7 12 7 23 11 15 8 11 7

Yes 71% 65% 73% 53% 54% 50% 40% 38% 42% 46%No 29% 35% 27% 47% 46% 50% 60% 62% 58% 54%


Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Yes 26 5 16 3 12 4 6 2 4 2No 17 7 7 5 17 8 11 7 9 6

Yes 60% 42% 70% 38% 41% 33% 35% 22% 31% 25%No 40% 58% 30% 63% 59% 67% 65% 78% 69% 75%


Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Yes 27 8 17 5 15 7 4 3 4 4No 5 0 5 2 6 3 4 1 2 1

Yes 84% 100% 77% 71% 71% 70% 50% 75% 67% 80%No 16% 0% 23% 29% 29% 30% 50% 25% 33% 20%


# of Responses

% of Total Bank Responses by Position

Total

# of Responses

% of Total Responses by Position


# of Responses

% of Total Independent Responses by Position


Once such a threshold is reached, is the incentive paid back to the first dollar or unit or only on dollars or units beyond the threshold?

7/24/2015

Overall, once a volume or throughput threshold is reached, lenders were significantly more likely to pay incentives back to the first dollar or unit for virtually all back office personnel eligible for dollar volume or throughput incentives. This approach creates a

very strong incentive for back office personnel to reach the threshold; but significantly less incentive to stretch productivity beyond the threshold.

STRATMOR’s experience indicates that lenders who pay incentives only on incremental production beyond a threshold feel that base pay is paying back office staff to achieve threshold productivity.

Lenders adopting this “base pay for threshold productivity” philosophy should therefore be paying relatively higher base pay or possibly setting lower thresholds. This is a subject for future research.

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Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Back to the first dollar or unit 39 10 20 7 16 8 7 5 6 5Only on dollars or units beyond the threshold 14 3 13 1 11 3 3 0 2 1N/A 69 109 89 114 95 111 112 117 114 116

Back to the first dollar or unit 32% 8% 16% 6% 13% 7% 6% 4% 5% 4%Only on dollars or units beyond the threshold 11% 2% 11% 1% 9% 2% 2% 0% 2% 1%N/A 57% 89% 73% 93% 78% 91% 92% 96% 93% 95%


Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team




Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team




# of Responses


Total Respondents

# of Responses



# of Responses



Once such a threshold is reached, is the incentive paid back to the first dollar or unit or only on dollars or units beyond the threshold?

7/24/2015

On a position‐by‐position basis, dollar volume or throughput based incentive plans are typically 2‐3 times more likely to pay incentives back to the first dollar or unit than on incremental production beyond the threshold.

Independents, in particular, were likely to pay back to first dollar or unit.

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Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Back to the first dollar or unit 39 10 20 7 16 8 7 5 6 5Only on dollars or units beyond the threshold 14 3 13 1 11 3 3 0 2 1

Back to the first dollar or unit 74% 77% 61% 88% 59% 73% 70% 100% 75% 83%Only on dollars or units beyond the threshold 26% 23% 39% 13% 41% 27% 30% 0% 25% 17%


Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team




Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team




# of Responses

% of Total Bank Responses by Position

Total Respondents

# of Responses



# of Responses



Is the volume or throughput based incentive a flat or tiered incentive?

7/24/2015

Overall, on a position‐by‐position basis, a flat volume incentive was consistently the choice over a tiered volume incentive; however As regards processors,

Banks preferred a tiered volume incentive.

While not directly answered by the survey, we believe that lenders reporting both flat and tiered incentive compensation for volume or throughput incentives are lenders that have a monthly incentive coupled with a multi‐month supplemental or override incentive, e.g., a quarterly or semi‐annual incentive.

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Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Flat 33 8 26 3 31 8 17 7 13 6Tiered 28 5 11 4 15 6 4 4 6 5Both Flat and Tiered 9 3 5 2 1 1 0 0 0 0Other 5 4 3 6 3 7 4 2 0 2N/A 47 102 77 107 72 100 97 109 103 109

Flat 27% 7% 21% 2% 25% 7% 14% 6% 11% 5%Tiered 23% 4% 9% 3% 12% 5% 3% 3% 5% 4%Both Flat and Tiered 7% 2% 4% 2% 1% 1% 0% 0% 0% 0%Other 4% 3% 2% 5% 2% 6% 3% 2% 0% 2%N/A 39% 84% 63% 88% 59% 82% 80% 89% 84% 89%


Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team




Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team




# of Responses


Total Respondents

# of Responses



# of Responses



Is the volume or throughput based incentive a flat or tiered incentive?

7/24/2015

For almost every back office position where a dollar volume or unit throughput incentive is offered, Banks are significantly more likely than Independents to offer a tiered incentive versus a flat incentive.

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Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Flat 33 8 26 3 31 8 17 7 13 6Tiered 28 5 11 4 15 6 4 4 6 5Both Flat and Tiered 9 3 5 2 1 1 0 0 0 0Other 5 4 3 6 3 7 4 2 0 2

Flat 44% 40% 58% 20% 62% 36% 68% 54% 68% 46%Tiered 37% 25% 24% 27% 30% 27% 16% 31% 32% 38%Both Flat and Tiered 12% 15% 11% 13% 2% 5% 0% 0% 0% 0%Other 7% 20% 7% 40% 6% 32% 16% 15% 0% 15%


Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team




Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team




# of Responses

% of Total Bank Responses

Total Respondents

# of Responses



# of Responses



Over what time frame is your volume or throughput incentive paid?

7/24/2015

Overall, for almost all back office positions, dollar volume or unit throughput incentives are likely to be paid out monthly; however:

Relative to Independents, in addition to being less likely to have dollar volume or unit throughput incentive plans for back office personnel, where they do pay out such incentives, Banks are more significantly less likely to pay out on a monthly basis. When they offer dollar

volume or unit throughput based incentives, Banks are more likely than Independents to have both thresholds and tiered incentives.

This makes them more susceptible than Independents to month‐to‐month timing differences as regards closed loans, a risk that can be mitigated by having multi‐month payouts.

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Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Monthly 65 12 39 8 42 11 19 6 14 7Quarterly 8 4 6 2 6 4 4 4 4 3Annually 3 1 6 3 4 3 4 3 4 3

Monthly 86% 71% 76% 62% 81% 61% 70% 46% 64% 54%Quarterly 11% 24% 12% 15% 12% 22% 15% 31% 18% 23%Annually 4% 6% 12% 23% 8% 17% 15% 23% 18% 23%


Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team




Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team




# of Responses


Total Respondents

# of Responses



# of Responses



If your compensation plan includes explicit non‐volume or throughput based incentive factors, what factors are you measuring?

7/24/2015

Overall, explicit non‐dollar volume or unit throughput incentive factors are dominated by the error rate and service factors comprised of average borrower satisfaction and cycle times.

It is surprising that post‐closer and shipper incentive compensation factors include average days from application to closing (which does not involve post‐closing or shipping personnel) and average customer satisfaction (which should not be impacted by what happens after closing). These results either reflect

response errors or a compensation component that pools all back office personnel.

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Processor Team

U/W Individual

U/W Team

Closer Individual

Closer Team


Post Closer Team

Shipper Individual

Shipper Team

Average turn times per primary activity 10 4 0 0 6 4 5 1 6 1Average days from application to closing 10 2 0 0 2 1 1 1 1 1Average days from application to loan decision 6 0 0 0 0 0 0 0 0 0Average number of submissions to underwriting per loan 5 1 0 0 0 0 0 0 0 0Average % of errors 19 6 0 0 13 4 6 3 5 4Average customer satisfaction score 12 5 0 0 6 4 2 2 2 1

Average turn times per primary activity 34% 33% 0% 0% 32% 36% 50% 17% 67% 17%Average days from application to closing 34% 17% 0% 0% 11% 9% 10% 17% 11% 17%Average days from application to loan decision 21% 0% 0% 0% 0% 0% 0% 0% 0% 0%Average number of submissions to underwriting per loan 17% 8% 0% 0% 0% 0% 0% 0% 0% 0%Average % of errors 66% 50% 0% 0% 68% 36% 60% 50% 56% 67%Average customer satisfaction score 41% 42% 0% 0% 32% 36% 20% 33% 22% 17%

Total Respondents

# of Responses

% of Respondents with Non‐Volume Incentives


If your compensation plan includes explicit non‐volume or throughput based incentive factors, what factors are you measuring?

7/24/2015

Independents include cycle times much more frequently than Banks as regards incentive compensation for fulfillment personnel.

Banks, on the other hand, use average customer satisfaction scores much more frequently as regards incentive compensation for both fulfillment and post‐closing personnel (even though post‐closing and shipping personnel do not affect the borrower’s experience). STRATMOR ascribes this

finding to the fact that Banks, in general, measure customer satisfaction across business lines and have incentive plans that often pay out at the aggregate line of business level, e.g., mortgage operations.

23


Processor Team

er Individual

Underwriter Team

Closer Individual

Closer Team


Post Closer Team

Shipper Individual

Shipper Team




Processor Team

er Individual

Underwriter Team

Closer Individual

Closer Team


Post Closer Team

Shipper Individual

Shipper Team




# of Responses

% of Banks with Non‐Volume Incentives


# of Responses

% of Independents with Non‐Volume Incentives


Are your volume/throughput based incentives completely independent of your non‐volume/throughput based incentives?

7/24/2015

Overall, volume/ throughput based incentives are paid without regard to non‐volume/throughput factors by a fairly wide margin, especially for fulfillment personnel. This is surprising since

volume at the expense of loan quality and customer service should probably be discouraged.

Banks, however, appear to be more inclined to link volume/throughput performance with loan quality, service and borrower satisfaction factors.

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Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Yes 44 12 28 7 21 7 10 6 9 6No 16 7 11 4 12 9 7 7 7 5

Yes 73% 63% 72% 64% 64% 44% 59% 46% 56% 55%No 27% 37% 28% 36% 36% 56% 41% 54% 44% 45%


Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Yes 26 9 17 3 15 4 9 4 7 4No 6 2 6 2 5 5 4 4 5 3

Yes 81% 82% 74% 60% 75% 44% 69% 50% 58% 57%No 19% 18% 26% 40% 25% 56% 31% 50% 42% 43%


Processor Team


Underwriter Team



Post Closer Team

Shipper Individual

Shipper Team

Yes 18 3 11 4 6 3 1 2 2 2No 10 5 5 2 7 4 3 3 2 2

Yes 64% 38% 69% 67% 46% 43% 25% 40% 50% 50%No 36% 63% 31% 33% 54% 57% 75% 60% 50% 50%


Total Respondents

# of Responses



# of Responses


# of Responses



What changes to your incentive plan are you considering?

7/24/2015

Fewer than 20% of lenders are considering incentive‐related changes to their existing compensation plans, except for individual fulfillment personnel where 56% of lenders are considering changes for processors and 42% for closers.

Because fewer Banks currently have incentive compensation for their fulfillment personnel, the proportion Banks considering starting such an incentive plan is roughly twice that of Independents.

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Processor Team

U/W Individual

U/W Team

Closer Individual

Closer Team


Post Closer Team

Shipper Individual

Shipper Team

Starting an incentive program 16 7 0 0 16 10 14 8 7 9Adding a new component to the existing plan 18 5 0 0 13 5 8 4 6 5Creating new criteria for qualification for an incentive 17 2 0 0 14 2 7 0 3 1Changing the existing criteria to qualify for an incentive 17 3 0 0 8 3 2 2 2 1No Changes 54 105 122 122 71 102 91 108 104 106

Starting an incentive program 13% 6% 0% 0% 13% 8% 11% 7% 6% 7%Adding a new component to the existing plan 15% 4% 0% 0% 11% 4% 7% 3% 5% 4%Creating new criteria for qualification for an incentive 14% 2% 0% 0% 11% 2% 6% 0% 2% 1%Changing the existing criteria to qualify for an incentive 14% 2% 0% 0% 7% 2% 2% 2% 2% 1%No Changes 44% 86% 100% 100% 58% 84% 75% 89% 85% 87%


Processor Team

U/W Individual

U/W Team

Closer Individual

Closer Team


Post Closer Team

Shipper Individual

Shipper Team




Processor Team

U/W Individual

U/W Team

Closer Individual

Closer Team


Post Closer Team

Shipper Individual

Shipper Team




# of Responses


`

# of Responses

% of Total Respondents (122)


# of Responses



Noteworthy Participant Comments Regarding Fulfillment and Back Office Incentives

We are moving away from unit based bonuses for processors. Need to establish firm quantifiable KPIs to establish consistent incentives There was a plan in place in 2013 however measurements were not accurate and caused issues which

is when it went to an annual company performance We only invoke a production incentive when volume exceeds capacity levels. Discretionary incentives are awarded during high volume times based on the number of units that are

completed. This practice is not consistent from month to month. During peak volume times, we pay incentives 3‐6 months out of the 12.

We pay processors on file quality as defined as investor suspenses or the need for lock extensions. The participation rate continues to be a point of discussion. I would like to have both team based for all Ops employees as well as processor based on quantity

and quality. Always looking for ways to incorporate service (Closing purchase transactions on time) and quality

(reducing manufacturing defects) Has been very successful. It has given high‐stakes ownership to the teams.

7/24/2015

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Contact Us

7/24/2015

Dr. Matt LindManaging DirectorSTRATMOR Group

Office: 781‐749‐[email protected]

27

Nicole YungManaging DirectorSTRATMOR Group

Office: 770‐632‐4445 [email protected]

For more information on STRATMOR PeerViewsContact:

[email protected]


Documents

PeerViews Back Office Incentive Results FINALBackground 7/24/2015 The Back Office Incentives survey was the third survey issued under STRATMOR’s new PeerViews program PeerViews is