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knowledge to advance to the next level?
• Does the individual put forth the appropriate effort (work ethic)?
• Does the individual work to build new knowledge (client-specific, in-
dustry, or technical skills)?
• Does the individual contribute to firm intellectual property or help de-
velop new service lines?
• Does the individual develop meaningful, effective relationships with
client counterparts?
• Does the individual work to sell new business or expand business with
existing clients?
• Is the individual capable of appropriately structuring and managing
work independently or working in teams?
• Does the individual manage subordinates and teams well?
• Does the individual establish effective working relationships with peers
and managers?

The CD-ROM that accompanies this book provides a sample appraisal
form for a consulting-oriented professional services organization.
Because of the effort for appraisals and most firms™ planning cycles, an an-
nual appraisal cycle is generally most appropriate. Many firms also perform a
quarterly or half-year appraisal for new hires to ensure that they get off to
a good start. Staff with performance issues may need to have intracycle ap-
praisals completed as well to ensure that they are raising the level of their
production appropriately.
The firm must also make a choice about how many appraisals it wants to
complete simultaneously. Some firms work on rolling appraisal schedules,
which coincide with the anniversary of the individual™s hire date. Other
firms complete all staff appraisals during the period of a few weeks, once
per year. This schedule is particularly appropriate for firms with seasonal
business patterns. A drop-off in billable activity at the end of the year can
make the ideal time to complete the appraisal cycle. Usually an annual ap-
praisal cycle is most productive; rolling appraisals can be disruptive and are
more difficult to organize.
The appraisal process should also define which professionals should be in-
terviewed for the appraisal. Some firms limit interviews and input to man-
agers or partners for whom the appraisee has worked, and other firms employ
230 Attracting and Retaining the Best Professionals

a “360-degree feedback” process, which interviews peers and subordinates as
well. While the 360-degree approach is more time consuming, it often un-
earths additional useful information for appraiser and appraisee. Another con-
sideration is whether client feedback should be incorporated. While this can
be a tricky area, often clients appreciate being made part of the evaluation
process and will have insights not found inside the firm. Clients of long-
standing relationship to the firm and with direct experience with the ap-
praisee™s work product are the best targets for such data gathering.
To facilitate the appraisal process, professional staff may be asked to com-
plete a self-appraisal as the first step of the overall appraisal. This is a useful
practice because it forces appraisees to take a candid look at their perfor-
mance and improvement needs. It can also reveal any self-awareness issues if
there are large gaps between the appraisees™ evaluations and the feedback
from the organization. Generally, appraisees fill out the same forms that the
appraiser completes.
Administrative staff should be included in the appraisal process as well.
The appraisal areas for administrative staff are, however, different from
those of professional staff.
Because of the large amount of effort that goes into each individual ap-
praisal, the workload should be shared across the firm professionals. Thus,
the appraiser for a given individual may be someone only one to two levels
above that individual (e.g., a principal evaluating a manager or a manager
evaluating a consultant). This approach has the added benefit of providing
training for the appraiser and provides an additional perspective on the pro-
cess because most firm professionals will be both appraisers and appraisees
in a given cycle.

Creating Performance Plans
While a host of management books with advice and guidance on effectively
managing your workforce are available, the effective management of em-
ployees can often be overcomplicated by the pundits. The firm managers
should pick a management philosophy that matches their personality and ca-
pabilities. However, in most cases, creating a high-performance team boils
down to four things:

1. Setting (and documenting) clear objectives and expectations of supe-
rior performance.
2. Developing a joint plan that lays out execution of those objectives and
expectations over a period (usually quarterly or annually).
3. Measuring progress against those objectives and expectations on a
monthly or quarterly basis and at annual review time.
4. Providing feedback to employees after analyzing the measures in step 3.
Career Tracks, Compensation, and Professional Development

Feedback can occur in one of four ways, depending on the situation:

1. Good feedback: Give positive reinforcing feedback to the individual.
2. Bad feedback, but employee has potential: The firm manager must as-
sist the individual who has potential to get back on track. This may en-
tail weekly meetings to help mentor the individual.
3. Repeated bad feedback: After repeated attempts to help the person or
after concluding the person is not capable, make the employee take re-
sponsibility by putting him or her on a performance improvement plan
where he or she is accountable to achieve some short-term objectives
in a short time (e.g., 45 days) or risk being terminated.
4. Bad feedback and employee has failed his or her performance improve-
ment plan: It is the firm™s responsibility to terminate the employee or
move him or her into a position that requires fewer skills.

The 10 Percent Attrition Model
The 10 percent attrition model is focused on improving the average perfor-
mance of the firm professionals by creating attrition in the poorest perform-
ing 10 percent of staff every year. In this model, the firm releases the bottom
10 percent of the workforce annually. This process ensures that the firm is
constantly upgrading the team. It also helps the workers falling in the bottom
10 percent. This model is applicable to mid-size and large professional ser-
vices firms. After a few cycles, the firm professionals will be a stable, high-
quality group, and the attrition model may no longer apply; however, we have
found this situation to be the exception. Although there are costs to any type
of employee turnover, the costs of an ineffective, poorly performing team far
outweigh the impact of turning out the poor performers.
To accomplish this attrition, during each review cycle, the firm manage-
ment team should rank professional staff according to their relative perfor-
mance. One method is to adopt the A, B, C, D model, which equates A to the
top 10 percent of performers, B to the middle 60 percent, C to the next 20
percent, and D to the bottom 10 percent. Adhering to a 10 percent attrition
model, particularly for the struggling firm, is effective because the cost of D
staffers is significant.
The obvious costs include compensating employees who are not producing
value for the organization. However, this is only a small portion of the cost to
the department. D players traditionally command a disproportionate amount
of management attention because of either personal issues or performance
problems. The management attention could be used for driving projects for-
ward and otherwise ensuring the firm™s success.
Further, management or teammates have to cover for the nonperformance
of the D-ranked staff members. Finally, and most corrosive, D performers
232 Attracting and Retaining the Best Professionals

tend to drive away the A and B players, who ask, “ Why am I getting paid
the same amount for producing twice as much work?” Management atten-
tion should be spent on caring for and developing A and B players and on
reducing their attrition to zero. The forced attrition model and an em-
ployee swap analysis are powerful tools for managing a world-class profes-
sional services firm.

Training Programs for Professional Development
Training programs for professional staff can be a powerful tool for improving
both staff performance and for staff satisfaction.
The hallmarks of a good training program are:

• Relevance: The training should provide skills directly useful to the pro-
fessional in the execution of the major portion of their responsibilities,
for example, legal research training for entry-level attorneys or project
management training for managers.
• Timeliness: The best training is timely as well, and is delivered to staff
at the point in their career where they have enough experience for the
training to be relevant but early enough that they can reap the benefits
of it.
• Linkage to promotion objectives: Training often takes a back seat to bill-
ability objectives, client work, and other unavoidable business emergen-
cies. However, because training is an effective and important way of
improving staff performance, the firm must find ways to promote and
enforce objectives. One way to ensure that this happens is by tying stan-
dard training classes to promotion objectives.

Professional staff value training because they enjoy the challenge of
learning new skills, and they recognize that keeping skills current (particu-
larly for professionals in areas with rapidly changing skills required, such as
technology) ensures interesting future assignments and helps guarantee job
To facilitate the delivery of this benefit, each position identified for the
organization (as outlined previously in this chapter) should have a specific
training regimen. This regimen should include both recommended and re-
quired training for each level. Promotion should be made contingent, in part,
on completing the required training. Firm management can work to establish
a training program and can help with conducting training, tracking comple-
tion and certification, as well as identifying outside providers for delivery of
the training. This should be done in conjunction with the professional staff,
who can be helpful in identifying the training that would be both interesting
and useful for their role.
Career Tracks, Compensation, and Professional Development

Because training, particularly training conducted by outside providers,
invariably involves significant time and expense for the company, firm man-
agement may want to consider asking employees to make a reciprocal com-
mitment to the organization. In exchange for the training, staff may sign a
training certificate. This certificate outlines the training program and the
cost for each piece. Employees should sign an agreement stating that they
will reimburse the company for training costs if they leave the company vol-
untarily within 12 months after they complete the course. This acknowledg-
ment accomplishes two things. First, it demonstrates to employees the actual
dollar amounts invested by the department in their training. Second, it re-
duces the risk of investing in employees who depart the company as soon as
they receive the training, lowering attrition in the firm.
As employees receive training, their market value increases, and they will
likely graduate from one job to the next. To keep the staff interested and en-
gaged, they must be provided opportunities to move ahead, use the new skills
they have learned, and continue to learn new professional skills. If the com-
pany does not provide its team with these opportunities, the best employees
will find an employer who will. Providing training, development, and a chance
to use new skills generates a tremendous amount of loyalty and goodwill.
In some cases, the team member may be trained out of the company. After
employees complete a training regimen and improve their skills, their value
increases. At some point, the organization may not be able to provide them
with the on-the-job responsibility that they would command in the open
market and they may elect to move on. This is a natural outcome of having
qualified employees and, while employee retention is critical, should not be
cause for alarm.
We have heard good managers characterize it thus: “The department
should be more like a college than a prison. We miss our best team members
when they elect to move on, but if we cannot provide them opportunities to
grow, then they must seek them on the open market.” Allowing employees to
leave on good terms also means that they may return eventually.
Providing rigorous training and development opportunities will entail
some short-term expense for the firm, but it will be a crucial factor in the de-
partment™s ability to retain the “A” players. Firms that fail to train, develop,
and challenge their staff will retain only those who cannot find employment
For smaller firms with limited training budgets, creative approaches may
be required to achieve professional development goals. Self-study, training
provided by outside firms, or teaming with other small firms are some ways
that this can be accomplished.
For firms of all types, voluntary training can be helpful, particularly for
skills that are useful but fall outside the normal on-the-job experiences of the
professional staff. One technology services company, seeking to improve the
decision-making capabilities of its management employees, embarked on a
234 Attracting and Retaining the Best Professionals

“book club.” The manager group signed up for readings and group discussions
of a selection of landmark books on the topic of decision science. This was a
low-effort, low-cost, high-impact way of accomplishing training that could not
be accomplished as part of the day-to-day execution of the business.
Another often-overlooked source of training is simple networking and in-
volvement in outside industry groups. Professionals can get significant advice
and new viewpoints from discussing issues they are facing in the management
of their firm or delivery of their service with others in the same or similar
businesses. Professional networking groups that facilitate such meetings are
easy to locate for a given geography and profession and can generate a large
return on the time invested in them.
Certain professions or roles may have specific certifications that are help-
ful (or essential). The technology services business is rife with certifications;
the fields of law, accounting, real estate, and architecture have a variety of
professional certifications that are required or are helpful. As with training,
the firm may elect to link the achievement or retention of certain certifica-
tions to promotion and advancement.
Finally, firms of a certain size may elect to create a department or group
dedicated to professional training. Firms with more than 100 professionals
may consider having at least one resource dedicated to internal training.
Other factors determining the need for dedicated internal training resources
include highly specific skills or knowledge needed to deliver firm services
and high attrition rates resulting in large numbers of new staff over a long
period of time.

Management Coaching
Much of the day-to-day professional development in a services firm comes
from direct manager feedback to staff, delivered on an ongoing basis. This
informal, real-time feedback is an important kind of training for staff; there-
fore, managers should be aware of the best ways to work with their teams in
providing feedback.
Robert S. Bailey of the Center for Creative Leadership has developed a
framework for guiding manager feedback styles for employees based on their
current performance. The framework highlights that the management style
most appropriate for underperforming employees is different for moderate-
performing employees and again different for high-performing employees.3
The matrix, adapted here from The Architect™s Handbook of Professional
Practice, is shown in Exhibit 10.3. The distribution of employee performance
falls roughly on a normal curve, placing employees in one of four quadrants.
The most appropriate management style for each employee type is outlined in
each quadrant.
A final management coaching issue for professional staff to be aware of is
the challenges created for staff as they transition from individual producer
Career Tracks, Compensation, and Professional Development

Coaching Encouraging
Appropriate behaviors Appropriate behaviors


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