Are people in your firm accomplishing what really needs to get done? There are several pieces to the firm management puzzle, and each must fit together properly in order to successfully leverage personnel in today's economy.
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A firm's strategic plan and individual (including partner) 90-day game plans form the foundation of an effective performance evaluation system.
While charge hours are historically the primary measure of performance in many firms, the accounting profession is moving from an efforts-based to a results-based orientation. Many report that typical performance evaluation systems involve too much paperwork, take too much time to administer and do not adequately bolster performance. This is because these systems are too complex and do not focus on the most significant priorities.
While traditional systems focus on compliance, effective performance evaluations center on coaching and development. These evaluation initiatives are far more critical than bureaucratic forms and irrelevant terms. It is imperative now more than ever to document and utilize an efficient and effective system.
How an employee's performance integrates with the firm's strategic plan is often missing from performance evaluation systems.
If a firm doesn't have a strategic plan (or if the plan is not communicated outside the partner group) it will struggle to attract and retain quality people.
Here are three steps to building an effective performance management system:
Ditch the Paperwork
People are unique and motivated in different ways, and self-assessment is a powerful motivator. The 90-day game plan and accountability review rely upon on these principles. A simple, one-page document for each is sufficient for anyone to adequately address what they accomplished while laying a foundation for the next quarter.
The 90-day game plan should reveal an individual's goals and expectations while also aligning with the firm's strategic plan.
Each employee should be responsible for maintaining their performance evaluation documents and scheduling quarterly meetings with supervisors. Management needs only to review both documents and ensure that the employee is focused on priority goals that integrate with the firm's strategic plan.
A firm will benefit by focusing on the right outcomes and employees' strengths, rather than weaknesses. Tests like the Kolbe Index help managers understand an employee's strengths from the start.
Four Meetings a Year
Quarterly sessions offer management opportunities to learn about each employee's strengths, goals and requirements from the employee's point of view.
Performance evaluations conducted annually lack specificity and cannot adequately address ongoing improvement and personal growth. Frequent interaction is positive and reduces the risks of misunderstanding or misinterpreting expectations.
The accountability review and 90-day game plan completed quarterly provide employees with confidence to take on bigger goals, while revealing how they may not be meeting expectations. It keeps an employee's attention on the future, not the past.
The Right Outcomes
First, keep in mind that chargeable time is just one outcome, and it will not be primary for all employees. In fact, there are many other important outcomes that all firm employees should strive to achieve. These can be broken into four categories: financial, processes, client satisfaction and development (training and learning).
Firms are increasing their emphasis on developing people, client satisfaction and adherence to unique processes. Do employees follow firm standards and procedures when it comes to billing, tax preparation and financial reporting? Are clients satisfied and willing to buy additional services from the employee? Does the employee continue to develop individually, as well as help develop others? Some refer to these measurements as the balanced scorecard, but integration is better.
Revising your firm's performance management system may require work up front, but it offers significant rewards, not only a more efficient and simple process, but also long-term financial results as people perform at an ever-increasingly higher level.
Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.
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