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Appraisals: managing talent in your practice

3rd Oct 2008
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Earlier this year Tax UK offered a prize of £10,000 worth of practice development consultancy to a forward-looking accountancy practice. The winner was SJO Associates, run by Sarah-Jane Sinnott. Sarah-Jane will blog as the consultancy takes shape. In tandem Lesley Stalker of TAX UK will tell you how to adapt Sarah-Jane's experience to your practice. In the second instalment of series, Lesley Stalker of TAX UK examines the practicalities and the benefits of appraising your practice staff.

One of the hardest things for anyone running a business is finding good people. Good people who are competent, intelligent, loyal and dependable. People who want to grow with your business as it expands.

In fact, talent management – the current buzzword for this very traditional concept of finding good people and keeping them - is currently one of the biggest single issues facing most organisations, regardless of size. Across all sectors, there simply isn’t a big enough pool of really good people, so organisations need to work harder to attract them in the first place and then keep them. And things are no different in the accountancy profession, which is also suffering the same skills shortage. So, one of the foundations to put in place if you are a firm with ambitions to expand, is an effective appraisal system.

This is an area that can be neglected by smaller firms – due to a lack of time and resources together with a misguided belief they are too small to need formal processes. Why do we need an appraisal system if we only have one or two employees? Well, even if you only have one employee they still need to be motivated and involved.

This is an area we are focusing on quite early on in the TAX UK practice development programme with SJO Associates. As the managing partner of an ambitious and growing practice, Sarah Jane Sinnott cannot be everywhere simultaneously. She needs to be able to rely 100% on her staff – whatever level they are at within the organisation. And motivating the team, through an effective appraisals system, is the key to this.

Although many organisations find it practical to engage an external consultant to help them through the process, it is possible to develop an appraisal system in-house. The first step in creating an effective appraisals system is ensuring your team both understands and shares your strategic goals as documented in the firm’s business plan. You need to ask yourself the question: What do employees need to be doing in order to contribute to achieving the key objectives? And how does this translate into working behaviours? The appraisal system should be written with these specific outcomes in mind.

Why should all accountancy firms use an appraisal system?
In addition to highlighting and encouraging better performance, a good appraisal system fulfils a number of key talent management requirements. Firstly it provides a path for career progression – and this is really important in both smaller and larger firms. The relationship between employer and employee is symbiotic – as much as you need them to do a good job, part of their motivation is the need to feel they can develop professionally.

Secondly, an appraisal system minimises two very practical risks - losing good staff and retaining poor performers. Rather than having to put up with poor work, which is the all too common scenario, you as an employer can do something positive about it.

Thirdly and crucially, an appraisal system supports the development of a common approach – or culture - by all members of the firm in terms of “the way we do things here”. If everybody is being appraised in the same way and this is linked with your business plan, then you have a common, objective approach which saves management time. In particular, having an objective appraisal process means that if someone is behaving in a way that is undesirable, or doesn’t fit in with your culture, you have a positive and objective, consistent and fair approach with which to deal with it.

How do you develop an appraisal system?
One of the things I would stress is the importance of highlighting the core performance capabilities you need from employees in your firm in order to achieve your business plan goals. For example, at TAX UK, the ones we use are Client Awareness and Service, Team Working, Attention to Quality, Technical Skills, People Being Results Focused and Self-Managing, Initiative and Performance Management. Then, when employees are required to manage others, capabilities like Relationship Building, Organisational and Commercial Awareness plus Leadership and Influence become important.

So, whilst the appraisal system can be used to measure the stage people are at in each of these capabilities, it can also highlight the areas in which they need mentoring, coaching or additional training. Depending on their level within the organisation, staff will be expected to achieve different levels in different areas. They are required to spend time preparing for their appraisal and to give their opinion of their level of performance, citing appropriate evidence to substantiate their opinion. There are questions included in the preparation process which help them to substantiate their opinion, for instance, considering Client Awareness and Service, some of the questions we ask are: Can you give an example of a client who is really happy with your work? How would you know? How do you manage your workload so you can meet all your client’s needs, both in your contact with internal clients and external clients?

The benchmarking of actual behaviours and results requires various minimum levels to be identified according to the role performed by the staff member – for instance someone managing a team will, as a very minimum, need to be “responding positively to requests for help and support.” So the staff member would need to provide examples to illustrate how well this behaviour was being achieved, and discuss them during the appraisal meeting.

As important as actually developing this framework is allocating some time for staff to reflect on their performance and complete the paperwork. Having motivated and well-developed staff is crucial to achieving growth goals so it is important not to expect staff to prepare for appraisals at home. The final point to bear in mind when implementing an appraisal system is the need to be reflective. Appraising staff properly requires open dialogue and honesty – it cannot be a one way street!

Lesley Stalker is a practice development specialist and managing director of TAX UK, the virtual tax partner service.

Read Sara Jane's blog

Read Lesley's first article how to do a SWOT analysis of your practice.


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By kerr_ap
09th Oct 2008 16:09

Investors in People
It was with interest I read this article and the links it has (although not mentioned) to Investors in People (IIP). The IIP Standard is a framework of business improvement thorough people, following a simple process of Plan, Do and Review.

It looks at areas such as employee involvement, the review process and how individual objectives can link into team and company objectives. This in turn motivates staff into doing the best they can for the good of the business and how their actions can contribute to it's success. The business is a team effort and without staff to deliver a quality service, the business will most likely fail.

It then follows that where you have staff who are happy and motivated in their job that they will then feel a sense of greater loyalty to their employer, thus increasing levels of retention and hopefully attracting a good calibre of employee who wishes to work with you. IIP also looks at training and development and reward and recognition - further key areas in retaining staff.

I should mention that I work for IIP Scotland and thus have more than a passing interest in IIP. However, having perhaps been a sceptic when I initially joined, I have seen the benefits of working with IIP first hand and truly believe it provides a comprehensive framework for any business to thrive through the involvement of their people.

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