June 2009 Leadership Forum

In fulfilling our commitment to continuous improvement in CPA firm management, CPA Leadership Institute has created the Leadership Forum , a panel of the most prominent thought leaders in the profession. Each month we ask them to respond to a question dealing with CPA firm management and leadership.

This month's question is: Do the performance based compensation systems of most firms really motivate partners? Staff? If not, what is wrong with these systems?

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August J. Aquila	Aquila Global Advisors	www.aquilaadvisors.com aaquila@aquilaadvisors.com
In order for a pay for performance compensation system to REALLY work firms need to incorporate into the system three key elements... More

Larry Bildstein	The Whetstone Group	www.thewhetstonegroup.com larry@thewhetstonegroup.com
Performance based business development compensation systems do not work. I'm talking about…up to 10% of new work fees... More

Angie Grissom	The Rainmaker Consulting Group	www.therainmakeracademy.com angie@therainmakeracademy.com
Just make certain that: The goals that are being measured are actually attainable and there are not too many of them… More

Rita Keller	Keller Advisors, LLC	www.ritakeller.com rkeller@ritakeller.com
I believe that performance based compensation systems do motivate if they are actually followed. More

Jay N. Nisberg	Jay Nisberg and Associates	jaynisberg@snet.net
The following is a response by Dr. Nisberg to question previously asked but not reported on. The response is so pertinent, we want to be sure our readers see it. Do most? No. Do many? Yes. The biggest problem with performance reviews is the attachment of the compensation discussion with the performance discussion… More

Rich Rinehart	Grant Partners, LLC	www.grantptrs.com rrinehart@grantptrs.com
If performance based compensation systems are working properly then they measure the behaviors which when rewarded, propel a firm forward successfully. More

Joel Sinkin	Accounting Transition Advisors	www.transitionadvisors.com jsinkin@transitionadvisors.com
For many firms, the personalities and dynamics of their firms work very well in performance based compensation systems and still others do not. More

Doug Thompson	CPAmerica International	www.cpamerica.org dthompson@cpamerica.org
"Most" is the key word in this question. From my experience, no because… More

Joseph Tarasco	Accountants Advisory Group	www.accountantsadvisory.com joe@accountantsadvisory.com
Arriving at partner and staff compensation amounts and developing formulas, structures, and programs are a common problem and one of the most controversial in many accounting firms. More

Troy Waugh	FiveStar3, LLC	www.waughco.com twaugh@waughco.com
Some compensation systems motivate partners to undertake activities that benefit the partner at the expense of the firm. More

Sandra Wiley	Boomer Consulting, Inc.	www.boomer.com Sandra.Wiley@boomer.com
Many firms are still under the assumption that the only performance is the billable hour and that is what their compensation models are based on. More

Jennifer Wilson	ConvergeneCoaching LLC	www.convergencecoaching.com
Yes, if they are implemented correctly. Most firms make mistakes in implementing these systems including: Not being specific enough about the performance expected... More

Richard Berkowitz	Berkowitz Dick Pollack & Brant	http://www.bdpb.com/
Objective performance is not adequately defined; specific levels of performance are not specified or required… More

Harvey Goldstein	SingerLewak LLP	http://www.singerlewak.com/
Does it motivate...probably not. More

John C. Malone	Malone & Bailey, PC	http://www.malone-bailey.com/
They can. Ours (eat-what-you-kill model emphasizing service and collections, and de-emphasizing admin.) certainly does. I love it! More

Marc Parkinson	Petrinovich Pugh and Jones LLP	www.ppandco.com
…a lot of the ones I have heard about don't. A lot do… More

John Sensiba	Ireland San Filippo, LLP	www.isfllp.com
I don't think that they do. Many are still too heavily weighted on the "book of business" mentality... More

The Leadership Forum Report