You may have read or heard me talk about the research that led to my P4 Practice Management Principles (see Investment Advisor’s November 2011 cover story “Let It Grow”). What led me to conduct that research—and discover the P4 Principles—was the realization that half my clients were hiring good employees and turning them into great employees, while the other half were hiring great employees and making them mediocre at best.
Ironically, we were able to quickly and easily compare the historical performance of each employee because we don’t do performance reviews with the employees in our client firms any more. That’s because we found that once we established effective communications based on solid working relationships with our employees, we didn’t have anything to talk about in the annual reviews. Instead, we simply have our owner-advisors conduct a “360 Performance Assessment” on every employee every year, which tells us everything we need to know about how each employee is doing, in a data format that can be sliced and diced in myriad ways to spot trends and gauge overall firm performance.
It’s the best way we’ve found to communicate an advisory firm owners’ expectations to their employees. We highly recommend it to help firms—and employees— quickly get a handle on what they’re doing well, and what they need to work on.
Our Performance Assessments (which you can download for free on our website) rate employees from 1 to 5 in each of 9 key areas that we’ve determined contribute to building successful advisory practices. As you’ll see, they focus more on how employees do their jobs rather than on what they do.