Performance is defined in the Merriam-Webster Dictionary as a) the execution of an action, or b) something accomplished. The question is: Are people accomplishing the right things in firms today?Charge hours have been the primary measure of performance in many firms. However, the profession is moving from an effort-based to a results-based economy, and charge hours may be only one of many gauges the firm pilot must watch as he flies the plane.

While charge hours can be a measure, they are not the only measure that should be used in a firm. In order to ensure performance, many firms have implemented performance evaluation systems; however, the biggest complaint heard from partners is that there is too much paperwork and it takes too much high-level time to administer such systems. The bottom line is that most partners prefer serving clients rather than managing people.

In many firms, the tendency is to make the performance management system too complex and attempt to measure everything, rather than priorities. The following characteristics define a successful performance evaluation system:

1. Simple and easy to understand.

2. Quarterly interaction between the manager and the employee.

3. Focus on the future rather than the past.

4. The employee must be responsible for administering the system.

There is a good chance that your immediate reaction is that this type of system goes against conventional wisdom and what many firms have done in the past. Too often, performance evaluations have been tied to annual salary increases and conducted annually, where employees are rated by multiple managers and partners. The comments lack specificity and are not relative to improvement and personal growth.

Frequently, the other missing link is how the employee's performance plan integrates with the firm's strategic plan. If the firm doesn't have a strategic plan or if the plan is not communicated and well understood outside the partner group, you have an immediate problem that must be addressed if you hope to attract and retain quality people.

Let's evaluate each of the four criteria of good performance evaluation systems.

1. Simplicity is good. Great managers do not like bureaucratic forms and irrelevant terms. They are often more concerned with how to say what needs to be said to the employee. Many older systems focus on compliance, rather than coaching and development.

2. Annual meetings miss the details. Quarterly meetings are manageable in most firms if you have a system and people know and trust the system. Frequent interaction is positive and reduces the risk of misunderstanding or misinterpreting expectations.

We recommend that employees complete an accountability review form with a focus on progress over the past 90 days. This provides them with the confidence to take on bigger goals or demonstrates if they are not meeting their own and the firm's expectations.

The form that we use is one page and focuses on successes over the past 90 days, further progress required and specific steps to be taken in the future. This changes the employee's attention toward the future rather than focusing on the past.

3. Focus on the future is a key element in any system. Good managers use the accountability review to evaluate employees' mode of operation and requirements.

People are motivated differently. While conventional wisdom says you must treat everyone the same, great managers do not. They know what motivates each person and make sure employees design their personal 90-day game plans to fit the employee's situation and integrate the employee's plan into the firm's strategic plan. Significance is important to employees today, and they want to know how they are contributing to the firm's overall success. Self-assessment is a powerful tool and the employee does this by completing both the accountability review and their 90-day game plans. Management must simply review and insure that the self-assessment is accurate and that the employee is focusing on priority goals that integrate with the firm's strategic plan.

4. The employee should be responsible for maintaining their performance evaluation system. They should also schedule the quarterly meetings with their supervisor. The supervisor's responsibility is to understand the firm's strategic game plan and conduct the meeting with honest and consistent feedback.

Utilizing such a system will allow the firm to focus on the right outcomes, on employees' strengths rather than their weaknesses, and build powerful teams. The quarterly sessions allow the manager to learn about the employee's strengths, goals and requirements from the employee's perception. Use of testing, such as the Kolbe Index, will also allow managers to start with a focus on the employee's strengths from the start of employment, rather than learning the strengths over the first year.

If not chargeable time, then what are the outcomes a firm should be focusing on? Chargeable time is just one of the outcomes, and not all employees will have chargeable time as their primary outcome. Outcomes can be broken into four primary categories:

1. Financial.

2. Processes.

3. Client satisfaction.

4. Development (training and learning).

With the advent of a labor shortage, firms have started placing increased emphasis on the development of people, client satisfaction and unique firm processes. Do employees follow firm standards and procedures? Are clients satisfied and willing to buy additional services from the employee? Does the employee continue to develop personally, as well as develop other employees?

The firm performance system should support the firm's strategic plan and individual employees' (including partners') personal 90-day game plans. This is called accountability and it all starts at the top.

L. Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.

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