Performance Is Everything

Preface

Performance Is Everything is our second book about compensation for professional services firms. Our first book, Compensation as a Strategic Asset: The New Paradigm, attempted to capture in one place the current state of compensation plans used by CPA firms throughout North America and summarized our knowledge about how they were working. It also offered an introduction to implementing a pay-for-performance system. The two books are meant to complement each other. A great deal of practical information in the first book is not repeated in this second book, but it is still very relevant.

After we started writing this book, we realized it would be impossible to write about compensation without looking at the firm as a whole. Over the years, many articles have been written about owner and employee compensation, but compensation problems still exist in most firms. Our research shows that over half of owners in firms today are dissatisfied with the current compensation system, and most owners do not have written goals tied to bonus compensation.

Performance Is Everything comes from our current thinking based on our work over the past five years with firms that were facing compensation challenges. As we worked with more clients, it became clear that firms need not only to choose the right compensation plan for their practices (and not just copy another firm’s plan) but to develop an overall system that encompasses and links performance management and compensation. It also became ...