[IMGCAP(1)]I interviewed professionals in charge of human resources at reputable accounting firms to find out how they successfully manage and motivate accounting professionals. I’m confident that if you read on, you’ll learn a thing or two.

There are important differences between a review process and an incentive compensation program. Most of the human resources professionals I spoke with agree: reviews are about an individual’s performance around their work product, while incentive compensation programs address long-range career opportunities as well as their alignment with the firm’s overall objectives and core values.

Jill Sheetz, PHR, firm administrator at Pritchard Bieler, Gruver & Wilson, P.C. noted the difference.

“The review process tells our staff what they’ve accomplished during the year and where they (and management) see them going in the future, particularly in the coming year,” she said. “It summarizes shortcomings and strengths. The incentive compensation program is their guide map for their future at the firm and to clearly define what management sees as the priority achievements for each staff person.”

Ranking the Benefits of Implementing an Incentive Compensation Program
When asked about the main objectives for implementing an incentive compensation program, our HR professionals agreed that a main objective was to help individual professional’s define their path at the firm over the long-term. The HR professionals ranked a short list of benefits for the implementation of an incentive compensation program, as follows:

•    Define a professional’s career path at the firm
•    Develop overall talent of professionals
•    Increase employee engagement
•    Decisions about bonuses / salary increases
•    Improve technical skills of staff

Who Should Review and Evaluate Whom, and How?
The types of reviews that are being conducted differ from firm to firm. Most accounting firms are conducting top down reviews, with supervisors reviewing subordinates. In some cases, senior managers are asked to serve as a liaison between shareholders and associates, since shareholders have not, in many cases, had direct experience in working with them.

Some firms are also offering voluntary 360-degree review processes for those who wish to participate. Amanda Cline, human resources manager at E. Cohen & Company CPAs, noted,

“Some 360-degree reviewers are asked to remain anonymous. The risk is that anonymity could allow for vindictive criticism and leave the employee being reviewed feel “under attack.”

Jill Sheetz agrees. “If the employee isn’t comfortable with giving honest feedback (positive or negative) about their supervisor, the information can do more harm than good,” she said.

Human Resource professionals agree that an important objective is that professionals are reviewed by those with whom they have worked closely and who can provide honest, objective feedback on their performance, with constructive suggestions around areas for improvement.

Marla Martin, AAAPM, human resources manager for Weber O'Brien Ltd., advised, “As HR manager, I personally make a recommendation to the members who should prepare evaluations for each person. The recommendations are based on who has worked the most with the evaluatee and also ensuring that one principal member is present during the evaluation.”

All of the HR professionals I spoke with agree that reviews and evaluations should be conducted in person, with an HR professional present to take notes. In most cases, professionals are given either a document to review or have some form of interim “unofficial” review conversation. All of the HR professionals also strongly support informal meetings regarding performance throughout the year, i.e. after engagements or project work.

No one should be caught off guard or totally surprised at review / bonus time.

What are the biggest challenges in managing these types of performance evaluation programs?

• Time: “The time commitment necessary to truly evaluate each staff’s performance and provide comments and guidance for their future development is often times usurped by the financial raise process itself,” said Marla Martin.

• Complexity: Amanda Cline pointed out that “…many incentive compensation plans include multiple performance measurements as well as award types (e.g., short-term bonuses, long-term incentives, stock-based incentives, organizational awards) and target levels.

• Uniformity: Comparisons drawn from such a subjective process are always difficult to manage, noted Jill Sheetz.

• Incentive rewards: Incentives should appropriately reflect the objectives and goals achieved, as outlined during the review process. As discussed in “Incentive Pay: Creating a Competitive Advantage,” published by World at Work Press, “If mediocre employees are given an average merit increase, they will perceive that their performance is adequate. Conversely, if excellent performers only receive a little more in incentive pay than average performers, they will perceive that the company does not value their performance.”

• Failure to get buy-in from the top: Jill Sheetz said, “Unfortunately for the staff, this task is generally looked at by our supervisors in the same light that the general population view going to the dentist or doing their taxes. It seems to be a dreaded necessity. However, if communication is good throughout the year, thoughts should flow onto the evaluation and the hard discussions (if any) should have already been had.“

A comprehensive solution is needed for successful management and motivation of professionals. Forward-thinking human resources professionals are making great strides in the area of creating a multifaceted approach around managing and motivating professional services providers. There is a strong desire to develop professionals in a wide array of areas. This ensures a well-rounded firm with the abilities and knowledge necessary to provide top notch services to their clientele.

It is no longer acceptable to distribute rewards—monetary or otherwise—based on technical merit alone or billable hours. Human resource professionals are advising firms to adopt a unified approach to addressing the multiple aspects of all that makes up a “successful” professional services firm.

Jill Sheetz explained, “We have revamped our review process this year and are looking at the incentive compensation program as part of that process. We have communicated clearly defined expectations by staff level, which allows all firm members to know why they are at a particular level and what they need to do to get to the next level. This assists in employee engagement and helps develop the overall talent in the firm. Ideally, the importance of this process should be reflected in the shareholders’ pay/bonus structure.”

Marla Martin offered, “We are revising our evaluation forms, further attempting to develop one form that not only makes sense with this generation, but one that better helps to define their future at the firm. This includes specialization, CPE, marketing and personal development matters.”

Craig Single, chief talent officer at Elko & Associates, illustrates the value of using one comprehensive process to manage these processes. Craig has integrated the mentoring, incentive compensation and review process. Craig said, “It makes sense to have all of this part of a unified process. I use an accounting-focused consultant to assist us with the tabulation and deliverable of the results/data in order to keep the process easy and less cumbersome for our staff.”

Jill Sheetz advised, “The program you build to manage and motivate your professionals needs to address the firm as a whole and reflect the firm’s strategic planning, succession planning and knowledge management. Those designing the program must pay special attention to the details and fine nuances, such as looking at the knowledge they might be losing in the coming years and/or the knowledge needed to grow a particular desirable area within the firm. The right program can support all of these important initiatives.”

With advances in technology, there are affordable, customizable software systems for use at your CPA firm that can help manage and motivate staff in a way that reflects the core values at your firm and demonstrates that there are a multitude of areas that require focus in order to stay competitive in today’s market. The right program can educate, enlighten and empower your professionals on an individual level—and in a way that supports the overall goals and strategic direction of your firm.

Lisa Tierney, CLSC, is a certified life strategies coach and the founder of Tierney Coaching & Consulting, Inc. Lisa works predominantly with CPA professionals, assisting accountants in growing their practice, developing leadership abilities, effectively managing their relationships and finding graceful exists around succession planning. She is a sought-after speaker and facilitator of workshops and partner retreats. She can be reached at Lisa@CPAMarketingConsultant.com.

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