a better way to provide performance feedback

yes, we included a form. but we almost didn’t.

by marc rosenberg
cpa firm staff: managing your #1 asset

“feedback is the breakfast of champions.” – ken blanchard

“average players want to be left alone. good players want to be coached. great players want to be told the truth.” – doc rivers, nba basketball coach

more: training? cpe? they’re not the same | six tips for setting compensation | staff crave advancement and challenge | what leadership looks and feels at cpa firms | eleven things that good mentors do | give the recognition your staff needs | the importance of great bosses | how remote work is impacting accounting firms | make work flexibility work for everyone | why staff leave cpa firms … and how to stop them | how to solve the big disconnect in talent management | what relevance means for staffing in accounting | how accounting staffing has changed
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this post is divided into two sections:

• the progressive view of providing performance feedback, which a minority of firms today practice. whenever something new to the field of practice management appears in a major way, many firms are slow to embrace it. examples: proactive selling, going paperless, adopting the cloud and managing a cpa firm like a real business.
• the traditional view of providing performance feedback, which a majority of firms still practice today. if asked why the traditional practice continues, partners often respond, “that’s the way we’ve always done it. it ain’t perfect, but we are reasonably satisfied with it.”

progressive performance feedback

continuous feedback trumps annual reviews every day!

as veteran observers of how cpa management has evolved over the past 30 years, we’ve been fascinated to see how practices developed years ago are rediscovered. it’s as if these things are being invented for the first time.

case in point: the norm in virtually all organizations for providing performance feedback is the dreaded annual performance appraisal. yet firms have known for decades that continuous feedback is much more effective than an annual appraisal.

• continuous feedback means that when a project is completed, the staff are given immediate feedback on their performance instead of making them wait until the annual appraisal session. this way the feedback is fresh and can be used by the staff immediately to improve their performance on their very next project.

marc rosenberg remembers his experience with ernst & young, his first job out of college, like it was yesterday. he was paid a handsome salary at a prestigious firm to be trained on the job for practically his entire first year! every project he worked on – not most, but all – ended in a meeting with his supervisor regarding his performance. this of course was in addition to the detailed “review notes” he received every time he turned in work.

• an annual performance review is an event that takes place once a year, often combined with the process of giving staff salary increases. in many cases, firms that give annual reviews don’t provide much feedback after jobs. it’s quite possible that the first time staff hear feedback on jobs they completed months ago is during the annual review.

finally, firms are acknowledging that annual reviews suck.

rajeev behera wrote in reflektive on november 17, 2015:

“it’s no secret that annual reviews don’t accomplish what they are intended to do – develop staff and improve performance and productivity.”

here are the problems with annual reviews:

1. neither the staff nor the supervisor looks forward to them. annual reviews create a lot of anxiety for both parties. reviews put staff on the defensive when they receive feedback instead of making them receptive to it.
2. the formality of annual reviews adds to the anxiety. usually the supervisor gives the staff person a date for the review, often days or weeks in advance. this can make both parties nervous wrecks until the day of the review arrives.
3. some supervisors convene reviews over lunch, the worst possible place for them. restaurants are crowded, noisy places totally lacking the privacy needed for sensitive conversations. supervisors may hope that the celebratory aspect of meeting in a restaurant will reduce the anxiety, but it only adds to it.
4. because reviews are done once a year, time will inevitably be spent discussing old jobs as well as recent projects. no one can remember anything about the old jobs, which makes for an anxious and unproductive discussion.
5. because supervisors know there will be an annual review, they may hold off giving feedback on an ongoing basis. so staff often hear criticism for the first time during the annual appraisal. the review can turn into a “here’s what you’ve done wrong” session.

often there is an anxiety-provoking order to the appraisal session: first the “good things,” followed by the “bad things.” staff can’t really listen to the good things because they’re waiting for the other shoe to drop.

6. for quite some time, a pronounced shortage of staff has plagued cpa firms. this has had a negative impact on many aspects of firm operations, including performance feedback. the person giving the review, usually a partner or manager, is fearful that if they give negative feedback, staff will leave the firm. firms reason that they would rather retain an average or mediocre staff person than risk losing them. as a result, there is a tendency to water down the review and skim over anything that could be perceived as negative.

the case for trashing the annual performance review

here is a great article by ed mendlowitz. ed merged his small firm into withum, an east coast cpa firm powerhouse, and has
since become a prolific writer and thought leader on practice management. when we see something written by ed, we always look forward to reading it.

excerpts from “the art of accounting: annual staff evaluations” in accounting today:

i have never felt annual staff evaluations are effective. they are forced meetings that lay on complaints for past failures, many of which are not remembered or are vague memories at best. i think these annual meetings are a waste of time. instead, i have been very successful with immediate and periodic evaluations, coupled with regular mentoring sessions.

when someone does something wrong, i point out right away what it is and how it should have been done. if possible, i discuss what might have been the reason for the incorrect work. i also try to catch people doing something good and tell them – immediately.

i also schedule quarterly meetings to discuss performance, growth, satisfaction and goals and what can be done to improve in those areas. i have never liked measuring performance with metrics. it makes it too clinical and doesn’t provide accurate measures.

a good manager recognizes who the good people are through supervision, oversight, mentoring and interaction. the periodically scheduled mentoring sessions provide time to work on these issues. annual evaluations provide no opportunity for this.

“the one minute manager” by blanchard and johnson

“the one minute manager” is an allegory about a bright young man in search of the most effective manager. he hears about the ceo of a company in a nearby town and goes to interview him.

the ceo tells him that he is a one minute manager – someone who takes very little time to get very big results from people.

the ceo says simply, “people who feel good about themselves produce good results.”

the man interviews three people who report to the ceo. he learns the following three secrets:

1. one-minute goal setting. clarify responsibilities and what the subordinate is accountable for. it should take no more than a minute to discuss each goal.
2. one-minute praisings. give crystal-clear feedback to subordinates on how they are doing. tell people up front that you are going to do it. praise people immediately. be specific. shake hands or touch people in a way that makes them feel good about their success. this should take no more than a minute.

help your people reach their full potential. catch them doing something right!

3. one-minute reprimand. give staff crystal-clear feedback on what they did wrong. be specific. give the feedback in a style that communicates unhappiness with the behavior; don’t attack them personally. touch them in a way that reassures them that you think well of them and that they are valued employees. this should take no more than a minute.

other philosophies of “the one-minute manager”:

1. the best minute you spend is the one invested in people.
2. feedback is the breakfast of champions.
3. everyone is a potential winner. some people are disguised as losers. don’t let their appearance fool you.
4. you will be successful with the one-minute reprimand when you really care about the welfare of the person you are reprimanding.

warning

after reading the last few sections, you may be pumping your fist in the air, shouting, “down with annual performance appraisals.”

not so fast. the decision to cut back or eliminate annual reviews must be directly and tenaciously accompanied by two techniques:

1. a major commitment to providing continuous feedback on a routine basis. unless this is done, firms will end up providing little feedback to staff, which would be disastrous.
2. a transformation of the annual performance review process. for decades, these reviews have been historical, looking back on a year’s worth of performance. but if effective, continuous feedback is provided, the annual review should become a forward-looking process. the firm shares with employees where they stand with the firm and what they have to do to advance.

performance evaluation form

date
person reviewed
supervisor doing the review
client
hours worked on the job

accounting and tax skills

	excellent	met expectations	needs improvement
knowledge of audit and accounting
knowledge of tax
workpaper preparation
review techniques
was the person’s work thorough when submitted?

overall comments: ________________________________________________________

_______________________________________________________________________________

general skills

	excellent	met expectations	needs improvement
organization and planning
accuracy of work
ability to work independently
adhered to the time budget
met deadlines
overall attitude; conscientiousness
communication skills
effectiveness as a supervisor

overall comments: ________________________________________________________

_______________________________________________________________________________

what the person needs to work on and needs more experience in:

__________________________________________________________________________

__________________________________________________________________________

comments by the employee reviewed:

__________________________________________________________________________

__________________________________________________________________________

signature of the person reviewed:___________________________________

signature of the supervisor: __________________________________________

traditional performance feedback: the abcs

throughout the year

1. review the jobs in advance with the staff.
2. define standards of performance.
3. clarify expectations:
   • technical
   • time budget
   • deadlines
4. provide immediate feedback when each job concludes.
5. summarize the feedback using the firm’s evaluation form.
6. build feedback time into the time budget.
7. the routing sheet should include a checkbox for providing immediate feedback before the job is considered complete.

preparing for the annual review session

1. give advance notice of the date of the session. make a specific appointment.
2. make arrangements for the review session to be convened in a quiet, private room with no interruptions. do not convene review sessions in public places such as restaurants.
3. the reviewer should not make an appointment for after the review session that could cause the session to end prematurely.
4. the staff person should complete a self-evaluation form and share it with the reviewer before the review session. says stephen covey (of “seven habits of highly effective people” fame): “it is much more ennobling to the human spirit to let people judge themselves than to judge them.”
5. the reviewer should obtain feedback from all supervisors who worked with the staff person and should use this feedback in the review session.
6. reviewers should be trained and effective at conducting performance reviews.

the review session itself

1. ideally, continuous feedback has been provided to the staff person throughout the year. this makes the annual review session much more effective because instead of dredging up ages-old jobs that no one remembers, the session focuses on the future, where the person stands with the firm and what is needed to advance.
2. make sure that the message and tone of the session are consistent with the individual’s performance. in particular, don’t let the person walk away from the session feeling “i did well” when, in fact, the firm feels the person is a below-average or marginal performer. this creates a labor law exposure if the person is eventually dismissed despite personnel records indicating acceptable performance.
3. the annual review session is neither the beginning nor the end to anything. clarify what is expected of the staff person going forward, define the job description, and create formal, written performance goals for the person.
4. when making general remarks, be prepared to give specific examples.
5. stick with observed behavior; avoid hearsay.
6. don’t allow interruptions. conduct the session in a quiet, private environment.
7. provide enough time; don’t let outside obligations end the session prematurely.
8. the reviewer should do lots of listening. an appraisal session is not something that happens to an employee, but rather with an employee.
9. end on an upbeat note.

annual performance review form

this is a form that for some reason, firms just love to play with and change frequently. a new person who starts heading up the review function is often under the misguided assumption that the best thing to do, right from the beginning, is to change the review form.

we considered omitting a sample appraisal form, given our lack of faith in annual performance appraisals. but we weren’t prepared to face the wrath of those expecting such a form in a post about managing staff.

so the form below is a compendium of some of the better forms we have seen over the years. we always urge firms to keep the form as short as possible. here goes!

annual performance review form (sample)

date: ______________

name of person being reviewed: _____________________________

name of reviewer: ____________________________________________

hire date: ________________        present position:  ________________________

technical knowledge

	excellent	met expectations	needs improvement	no basis for judgment
auditing and accounting
tax
financial statement and footnote preparation
recognition and resolution of problem areas
understanding of the clients’ business
workpaper organization
technology skills

engagement management

	excellent	met expectations	needs improvement	no basis for judgment
has good client relations; gains their acceptance
identifies opportunities for cross-selling
meets time budgets
meets deadlines
bills promptly
bills aggressively; avoids needless writeoffs
plans engagements well
exercises good judgment
is able to work independently

practice development

	excellent	met expectations	needs improvement	no basis for judgment
practice development activity
business origination
keeping superiors informed

soft skills

	excellent	met expectations	needs improvement	no basis for judgment
supervises and trains staff effectively
has good communication skills
shows enthusiasm for the work and the job
is dependable and reliable
has a team orientation

overall evaluation:

[  ]  excellent       [  ]  met expectations       [  ]  needs improvement

 

suggestions for improvement (be specific): ___________________________

____________________________________________________________________________

what the person should work on during the next year: ______________

____________________________________________________________________________

goal setting. attach a sheet with a short number of high-impact goals for the year. all goals should be smart (specific, measurable, attainable, realistic and time-bounded). note: staff should draft their goals before the review session.

posted on november 17, 2024