During the busy seasons, CPA firm staff and supervisors are focused on their clients. For the best employees, the volume of work never distracts from the quality. But in crunch time, anyone can develop bad habits that can bleed over into regular operations. The future success of any CPA firm depends on nurturing best practices both individually and organizationally; identifying these as well as those bad habits is one of the goals of the performance evaluation. Performance evaluation time is an opportunity to revisit the overall objectives of the firm. Which activities are advancing those objectives, and which are standing in the way of progress? This is a time to stop, take a breath, and assess how well the contributions of the staff are adding to positive growth.
There is no one-size-fits-all approach for staff performance evaluations. The most effective tend to reveal what’s working and what isn’t – and plan for the future. It is important that firm leadership identify key themes of low performance across staff, but making this the focus of the evaluation period could have unintended consequences; reviews could begin to feel punitive, isolating high-performing employees by making their efforts feel unappreciated. If recurring themes of underperformance are uncovered, this could indicate that the firm may need to make changes to training or other support that the firm is providing to its staff.
Successful evaluations typically have a positive tone. They involve a meaningful, balanced conversation between staff and management regarding all aspects of past performance relative to their peers and their future career development. Past performance is used to identify key themes, lessons, and indicators for future development. In situations where staff performance falls on the low side, it is important to understand the contributing factors. This relies upon an open and honest dialogue, and requires the employee to feel free to express themselves without reservation. When successfully completed, an evaluation results in a specific performance plan to address low performance, or one to perpetuate already high performance.
Traditionally, CPA firms engage in formal, semiannual documented staff performance evaluations (mid-year and year-end). Staff, however, often crave more “real-time” feedback. As result, firms are increasingly encouraging supervisors to provide “on-the-job” feedback during the course of projects and not wait until evaluation time. As a best practice, firms are often requiring supervisors to document feedback at the close of projects while staff performance is still “fresh” in their minds. This allows supervisors to provide feedback to staff that they can use to take immediate action to correct or improve their performance, which benefits both parties. This approach is often successful, and some larger CPA firms are moving away from the traditional performance evaluation approach as a result.
Feedback is only one element of the evaluation process in a traditional approach, however. The evaluation process involves having:
- Established performance evaluation criteria based on the CPA firm’s objectives. Generally, performance criteria are defined for each staff level based on the CPA firm’s objectives. These criteria are then used by the staff at the beginning of the year to set individual goals upon which the staff will be measured. During the performance evaluation, the staff will generally self-assess their performance against the criteria using a scale (generally a 5-point scale). The CPA firm will use this same criteria and scale to arrive at an overall score for the staff member relative to their peers.
- Feedback from supervisors. For a fair and transparent process, documented feedback must exist and be the sole foundation for the review (not opinions or hearsay). Feedback must be balanced between high and low performance, provide examples of specific observed performance behaviors, and recommend actions for future development.
- Counselor preparation and representation. In larger CPA firms, where firm leadership does not necessarily work directly with all staff, counselors play a critical role in the evaluation process. Counselors are responsible for reviewing diligently and following up with supervisors on feedback provided for the counselors’ assigned staff, identifying key performance themes, engaging in meaningful, open, and objective conversations with their assigned staff regarding performance and future development, and accurately representing their assigned staff before firm leadership for overall rating relative to their peers.
When appropriately designed, the staff performance evaluation process can benefit both the CPA firm and its staff. Given the pressures and deadlines inherent in CPA work, staff want recognition and transparency with respect to their performance. They expect constructive assessments of their career development. They also want to understand how they are contributing to the future success of the firm. If a CPA firm’s staff performance evaluation process can provide these answers, then the firm can give itself a huge boost toward achieving positive staff engagement and productivity, minimize staff turnover, and continue strides toward meeting the firm’s objectives.