How Accountability Drives Higher Performance
March 16, 2020
“Accountability”... it’s a word that people either love or hate, depending on whether they are expecting it or it’s expected of them. For architecture and engineering (A/E) firms — and really any type of professional services firm — it’s a concept that everyone should embrace, as it can drive significantly better business results.
Putting Your KPIs to Work
Something we are often asked by A/E firms is, “Tracking key performance indicators is great, but what does that information do for us?” The answer is something they don’t always want to hear: it does nothing for you unless you choose to use it to influence behavior within your firm.” You have to set goals for people and require that they work toward achieving them. Otherwise those KPI numbers are just numbers.
In most cases, the response to this answer is something like, “Oh, I don’t know if we want to do that. I could see that being very divisive, and we value our positive work environment and relationships. We don’t want anyone to feel like they’re failing.” Unfortunately, the reality is that by ensuring your low performers don’t feel any pressure, you’re removing the incentive for your high performers to keep working hard. Before long, you have everyone naturally gravitating toward the least amount of work they can do and still keep their job.
Accountability is Not the Opposite of “Nice”
In describing their work environment, many A/E firms will use some variation of the word nice. “We have a really nice culture.” Then, when the concept of accountability comes up, they see it as the opposite of nice. But in our experience, you’re really not being nice by ignoring high performers or allowing low performers’ careers to stagnate.
And while distributing small end-of-year bonuses relatively evenly to all staff members may feel nice, you aren’t doing them or your firm any favors with that approach either. In fact, it tends to leave a great deal of profit on the table and much more substantial bonuses unpaid as a result.
"In an industry where good employees are hard to find and retain, KPI-based incentives make staffing easier."
Reward Plans and Incentive Plans (and Which Drives Better Performance)
As A/E firm owners know, there are two general types of bonus plans. We’ll call them “reward plans” and “incentive plans.” Reward plans are the small “thank you” described above. “We had a good year. You were a part of it. Here’s a little something for you.” The problem here is that team members know who works hard to help the company be in a position to provide rewards and who doesn’t. And, of course, it can be demoralizing (to say the least) to see people who don’t produce still get a reward.
More beneficial, though tougher to execute, is the incentive plan. Here, management is very clear about what each team member is expected to do and what additional compensation they’ll get if they achieve those objectives (as well as what will occur if they don’t achieve them). This incentivizes good behavior and disincentivizes bad behavior, and consequently drives better overall firm performance.
Now, of course, it’s not easy to define and fairly assign the objective measurements that will be used to assess a person’s work. This requires a full understanding of each employee’s role and the level of responsibility they have for firm success. And “objective” is key. Decisions on whether or not a person should be given an incentive bonus can’t be made based on whether or not they made their supervisor happy. True, there will always be a subjective element in this type of process, but it shouldn’t be the primary element.
An Epiphany on Effective Performance Reviews
Something that we realized at Aptera, and that A/E firm principals understand when they start to introduce accountability, is that being more objective in assessing team member performance has the added benefit of making the review process significantly less stressful. It’s much easier to say, and much easier for employees to hear, “The goals we set previously and the current numbers show your work could be improved here…” rather than “I feel like you could do a better job here…”
Plus, in an industry where good employees are hard to find and retain, KPI-based incentives make staffing easier. Productive team members tend to stay because they are rewarded for their hard work, underperformers tend to move on, and candidates considering their options are enticed by a culture where effort is recognized.
A Top-Down Approach to Accountability
As with any change in the way a firm operates, the only effective way to introduce accountability is from the top down. This can be a little jarring to high-level managers, as they may feel they’ve come up through the ranks and earned the right to not have anyone looking over their shoulder. But the willingness of principals to have their performance assessed based on key metrics makes a very powerful statement and helps create buy-in throughout the firm.
Ideally, the concept of accountability, and the individual incentives that drive it, should be rolled out over a period of a few years using a system like Factor A/E that makes it easy to break down KPIs into subsets that can be assigned to individuals. This gradual rollout allows people to get used to the idea and gives low-performing team members time to either up their game or look for other employment. And while departures can mean that remaining team members have to pick up the slack until new employees can be hired, this also creates an opportunity for hard workers to really shine.
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