 KEY PRINCIPLES FOR EFFECTIVE EVALUATIONS

KEY PRINCIPLES The evaluation process needs to be a catalyst for positive change. The primary purpose of the evaluation process is to help partners and managers become high performing leaders. 2

KEY PRINCIPLES The process should provide honest feedback regarding needed improvement. To encourage consistency, guidelines on the rating system need to be set and followed. Evaluators need to openly interact with each other rather than being allowed to complete the evaluation process while sitting at their desks. 3

KEY PRINCIPLES There should be group discussion about strengths and areas for improvement. Wherever possible, the same process should be used for all leaders in the firm (although it may need to be modified to fit the managing partner, COO, etc.). 4

 RECOMMENDED PARTNER/ MANAGER EVALUATION PROCESS

HIGH PERFORMANCE DEFINED In order to be a high performing leader, an individual must excel in four of the following six areas and be good in the remaining two. A high performing leader is never a “one trick pony.” Performance Areas 1. Financial Performance 2. Client Management 3. Business Development 4. Team Development 5. Personal Effectiveness 6. Leadership 6

RATING SCALE Measurement Scale Rating World Class Performance 9 or 10 Excellent Performance 7 or 8 Good Performance 5 or 6 Marginal Performance 3 or 4 Poor Performance 1 or 2 7

PARTNER/MANAGER EVALUATION 1. Financial Performance Strong personal revenue production – always at or above budget Strong department revenue production – always at or above budget Strong realization on revenue time Timely and effective billing without reminders Proactive in collecting outstanding AR Good track record of submitting daily timesheets Rating Strengths Areas for Improvement 8

PARTNER/MANAGER EVALUATION 2. Client Management Proven ability to provide consistently great client service Proactive in reaching out to clients – a true trusted advisor Clients consistently rave about the quality of service they receive Proven ability to grow the average revenue per client Proven ability to transfer clients to others Willingness to remove D-level clients Rating Strengths Areas for Improvement 9

PARTNER/MANAGER EVALUATION 3. Business Development Consistently strong personal marketing efforts Above average personal marketing results Consistent ability to cross-sell firm services Commitment to firm (office) marketing efforts Consistent ability to generate additional revenue from existing clients Continually building strong relationships with the business community Rating Strengths Areas for Improvement 10

PARTNER/MANAGER EVALUATION 4. Team Development Effective delegation of work to team members Willingness to provide meaningful coaching and mentoring Proven ability to develop leaders within the firm Consistently high scores on bottom-up evaluations Proven ability to recruit and retain key team members Proven ability to provide effective career planning for subordinates Rating Strengths Areas for Improvement 11

PARTNER/MANAGER EVALUATION 5. Personal Effectiveness Willingness to get outside personal comfort zone and use strengths to benefit the firm Proven ability to create and build skills each year Proven ability to be self-accountable to commitments Best effort in becoming continuously more valuable Strong technical expertise in a particular area or industry Willingness to live performance standards and be a good example to others Rating Strengths Areas for Improvement 12

PARTNER/MANAGER EVALUATION 6. Leadership Willingness to put the firm first Proven ability to speak up on important firm matters in a constructive way Ability to commit to firm/office decisions Willingness to set and accomplish stretch goals Ability to support fellow partners and discuss issues or concerns directly with them Commitment to the strategic direction of the firm Rating Strengths Areas for Improvement 13

EVALUATION PROCESS The evaluation team should consist of three individuals who work closely with the partner/manager. Initially, each member of the evaluation team independently assigns a numerical score to each performance category. The managing partner’s role is to help ensure consistency in scoring/evaluation.

EVALUATION PROCESS Numerical score descriptions must be applied consistently to each partner/manager. The goal is to avoid inflated scoring and to obtain a high level of comparability across the firm.

World Class Performance Leader possesses dominating strengths. A strength represents consistent near perfect performance in that activity. Tiger Woods isn’t perfect in every aspect of the game of golf but is consistent and near perfect. Warren Buffett isn’t perfect but is consistent and results driven. World class really means the individual is one of the very best in our profession in the area being rated.

Excellent Performance Leader possesses one or more distinguishing strengths. Remember, a strength represents consistent near perfect performance in that activity. Look around; who do you see possessing a strength that you believe excels through a combination of talent, knowledge, skill, and choice? Based on this benchmark, does the leader achieve excellence in that performance category?

Good Performance Leader possesses one or more strengths, but maybe not demonstrate them consistently. Remember, a strength represents consistent near perfect performance in that activity. Look around; who do you see possessing a strength that you believe excels occasionally, but some weakness or combination of weaknesses overwhelms the leader’s strength(s) from time to time?

Marginal Performance Leader lacks strengths in this area. Remember, a strength represents consistent near perfect performance in that activity. The leader lacks expected strengths within a performance category and observed weaknesses prevail. The leader would be expected to develop a corrective action plan to improve.

Poor Performance Leader lacks strengths and consistently demonstrates weakness in this area. The leader lacks expected strengths within a performance category and observed repeat weaknesses prevail. This rating could occur after the leader has had an opportunity to improve and fails.

EVALUATION PROCESS After the numerical score has been assigned, the evaluation team will brainstorm the individual’s strengths first, then weaknesses, for each performance category. The comments will then be summarized and documented on the scorecard.

EVALUATION PROCESS After the brainstorming session, each evaluation team member may reconsider his or her numerical rating for any of the six categories. The average numerical ratings for each performance category are then totaled for a final score.

EVALUATION PROCESS A total score of 40 would normally indicate the individual being evaluated achieves excellence in at least four categories and good in at least two categories. The objective is that each equity partner will perform at this level.

PARTNER/MANAGER EVALUATION FORM 24

PARTNER/MANAGER EVALUATION FORM 25

OBSERVATIONS AND ENCOURAGEMENT Few among us will have distinguishing strengths in every performance category. Manage around your weaknesses. Work to get a little better every day, design a support system, and use your strengths to overwhelm your weaknesses.

OBSERVATIONS AND ENCOURAGEMENT Identify those traits where you excel and build them into distinguishing strengths. Reinforce with practice and learning. We have identified six performance categories that every leader should build strengths in to excel. Continual improvement by all of us isn’t just a good thing, it’s our obligation to our partners and to the firm.