Frequently, we meet with executives to discuss the challenges that they face in the day-to-day operation of their firms.  By far, the topics that are raised most often are how to enforce compliance with firm policies and procedures and how to successfully attract and retain talent.  

It’s All About the Culture
Many professional services firms embrace a collegial mentality; one where it is assumed that everyone is performing their best, fulfilling their responsibilities, and contributing to the firm meeting its goals.  However, in most firms this culture has negative results including a lack of accountability and focus. This leads to overall stagnation and decline, not exactly what you need to grow.

With no system of accountability the culture of the organization tends to mutate into something undesirable. It’s this type of culture that can be the very thing that prevents an organization from winning the war for talent. The best and brightest talent will migrate to a firm that will recognize and reward their initiative.  Those employees who stay will shape to the social norm where behavior reinforces the status quo.  Attempts to change the strategic direction and improve profitability will fail because of this entrenched culture.

Why is Accountability so Important? 
When employees are held accountable it encourages them to take ownership and pride in their work.  Suddenly, you have people that feel a personal investment in the firm. Performance levels increase, and expected results can be achieved.  On the other hand, a lack of accountability leads to policies and procedures being ignored and respect and trust tend to diminish, leading to dysfunctional teams.  A pay-for-performance program reinforces expectations, separating the high performers from the low performers and adding accountability.

Performance That Leads to Pay
In action, a pay-for-performance program rallies employees around the strategic goals of the organization.  It encourages and rewards the desirable behaviors defined by the firm. The firm can measure success objectively and provide an increase in earning potential for employees.  Implementing a pay-for-performance program can accelerate growth by focusing energy on and rewarding actions that improve profitability by increasing revenues, reducing costs, and increasing efficiencies.

A well-designed pay-for-performance program doesn’t need to be overly complex and administratively burdensome.  However, it’s critically important to design a plan that rewards actions and behaviors that support the strategic goals of the firm, including the identification of metrics to measure progress.   

Changing culture is never easy, but it can make a huge contribution to the success of your organization. Implementing a meaningful pay-for-performance program is a key component to adding accountability to any organization.

About the Authors: 

Scott Hursh, CPA, CCIFP, CDA is Managing Principal of the Architectural and Engineering Group at Stambaugh Ness, PC, CPAs / Business and Technology Advisors, a national firm based in York, PA. 

Kristi Weierbach, Ph.D, SPHR, SHRM-SCP, FPC, is Director of Workforce Advisory Services at Stambaugh Ness. 

Join Kristi and Scott at this year’s THRIVE 2017 where they will take a closer look at this topic in their session, Strategic Compensation: how to Optimize Pay-for-Performance in Your Firm.

Stambaugh Ness is a Platinum sponsor of PSMJ's THRIVE 2017, which takes place October 3-5 in Denver. Are you ready for two high-energy days of inspiration, networking, and fun? THRIVE 2017 is your chance to learn, to network, and to get an eye-opening perspective on what the world’s most successful A/E/C firms are doing right now to thrive. This unique annual event attracts senior-level executives from a wide range of A/E/C organizations located around the world. Registration is now open!