A growing number of businesses that have traditionally tracked time, such as accounting firms, have decided to do away with this practice for good.
Value-pricing is gaining traction, technology advancements are constantly improving efficiencies, and more and more workers are moving outside traditional 9-5 hours or do not work in an office at all. These are just some of the factors that mean time-tracking is no longer the only way to track the performance of employees and keep tabs on efficiencies.
To determine how well staff meet expectations, you need to turn your attention away from the input, and assess output.
Tracking team performance with OKRs
An effective way of focusing and monitoring team performance is the OKR (Objectives & Key Results) method. This involves breaking yearly goals down into shorter-term objectives and key results, and setting individual goals for every team member that relate to these.
One of the major advantages of using OKRs is that they demonstrate how everything one team member does connects to the work of other employees, teams, and the overall goals of the practice. When everyone knows how their work is contributing to the bigger picture, it increases engagement, motivation, and determination.
OKRs begin with the business goals that cover multiple aspects of your business—revenue, staff retention, number of clients and their satisfaction, and whatever else you need to achieve to reach your ultimate goals. It will help to think about each aim using the S.M.A.R.T. method—make them specific, measurable, achievable, relevant, and time-specific.
When you look at quarterly objectives for your practice, you can then start to think about key results you will need to attain in order to hit each one of them.
OKR stands for Objectives & Key Results. Your objectives are goals, which tell you where to go. And each objective has a few key results, which indicate how you’ll get there.
Rules for your OKRs
You must set them annually and quarterly.
Don’t have too many: Five objectives and four key results for each is your maximum per quarter (though we recommend three objectives)
Make them challenging: you should expect to finish hitting 80% of your targets.
A key result must have a number. This way you can objectively say whether you’ve achieved it or not (scoring at the end of the quarter, using a scale of 0-1)
For example, your business-wide yearly goal might be to double profits, but your quarterly goal is to double revenue month on month, three months in a row. Two key results could be to increase revenue by bringing in a number of new clients, or increase the value of current clients by X%. So two actions could be to improve your client onboarding velocity and implement at least one fixed fee advisory service.
You may have a client onboarding specialist, who would then have individual OKRs to reduce the average time it takes them to onboard a client by two days, and to increase the number of clients they have in the onboarding phase by X%. Meanwhile, your business development manager might have an individual OKR to increase the value of advisory services contributing to monthly recurring revenue by 10%.
What to do with low and high performers?
Consistent low performers who do not meet your expectations can drag your whole team down. Every effort should be made to help them develop, but sometimes, further action will need to be taken. In this case, you should keep things formal using a performance improvement plan (PIP), where you specify occurrences of their low performance, and lay out an action plan to improve this together. Include a timeline outlining milestones that must be met.
High performers, on the other hand, must be retained. You need to do everything in you power to do this—expose them to new challenges, help them to grow further, reward them for their efforts, let them contribute toward the management and strategic direction of your firm, and provide them with opportunities to grow within your practice.
Effective staff retention starts by developing an Employee Retention Plan (EVP). Constantly revisit this and ensure that your business is providing value relating to the key success drivers that are most important to your highest performing staff members.
This article comes from The Talent Playbook, which you can download for free. It includes worksheets and activities to help you recruit, train & retain a world-class team.