Source: theHRDIRECTOR
Date: March 2006
Author: Irena Cowan, Head of Human Resources, BDO Stoy Hayward

BDO Stoy Hayward is the UK member firm of BDO international, the world’s fifth largest accounting network with 600 offices in 100 countries. They specialise in helping businesses to achieve their goals, whether they are young companies or multi-nationals. Irena Cowan, head of human resources at BDO Stoy Hayward, explains their approach to performance management in a climate of rapid change and expansion.

Over the past year, we have experienced unprecedented success. Our national turnover has grown from £187.6m in 2004 to £227.7m in 2005, representing an increase of 21.4%. In addition, another of BDO Stoy Hayward’s great success stories lies in the continuing growth of the BDO International global network, which generated fee income of £3bn in 2005.

Over recent years, the firm has experienced significant headcount growth through the merger of offices from the former national association and a number of external acquisitions. Managing the growth and change process has been challenging. As with any change programme, there have been cultural differences between us and some of the firms we have integrated with. We have provided important information for partners and employees new to the firm to introduce
them to our HR processes, reward mechanisms and performance management processes.

"the firm also uses upward feedback mechanisms"

BDO Stoy Hayward has a well established performance management system and this has helped to ensure that standards and performance expectations are met across the firm. Our performance management processes link into our core values and our competency framework (‘Skills at Work’) and form an integral part of the BDO Stoy Hayward culture.

Our core values are:
• Honesty and Integrity – openness, being trustworthy and straightforward in working relationships;
• Taking Personal Responsibility – treating each other as equals; and recognising individual strengths;
• Strong and Personal Client Relationships – understanding people as well as business; and building longstanding, trusting relationships;
• Mutual Respect – respect and consideration; sharing and supporting each other to deliver our best.

This was feedback from one senior person we recruited:
“Within BDO Stoy Hayward, I believe that we live and breathe the core values of the firm and that we treat people and clients fairly and with respect.”
Our ‘Skills at Work’ framework sets out the competencies and behaviours required to do a great job. The four key skills categories are:

• Servicing Our Clients
• Personal Effectiveness
• Leading and Managing
• Growing Our Business

Performance management starts with the firm’s business strategy and financial plans. Overall business strategy is then translated into individual objectives, and performance is assessed as part of the appraisal process. There are two formal appraisals each year and one of these includes feedback from an on-line 360 degree feedback process which, again, is linked to our values and ‘Skills at Work’.

Another key part of performance management in the firm is the ‘job appraisal’ process undertaken by our trainees as part of continuing professional development. A job appraisal is carried out at the end of each job or project, and provides the trainee with timely feedback on their development areas as they progress towards qualification. Merit ratings provide a clear indication of performance, and each trainee is assigned a counselling manager to discuss their job appraisals and on-going development needs.

To complement these processes the firm also uses upward feedback mechanisms. Typically this will involve facilitated discussion groups to collect and understand the opinions of one group of employees, in direct relation to another. Findings will then be presented back and discussed further with both groups.
This has proved particularly useful for different groups and hierarchical levels within the same business group or office location, as a mechanism for improving working practices and enhancing work relationships.

“regular ‘consistency’ meetings”

Ensuring consistency of standards across the business is a challenge for most organisations. As part of the pay review process, the HR team undertakes regular ‘consistency’ meetings to help ensure a common approach is taken across business streams and across geographical locations. These discussions also focus on providing management information on pay trends and market data to ensure that reward decisions are based on a sound economic rationale. This helps to ensure fair reward for good performance and supports the firm in engagement and retention of its key employees.

Whilst our performance management systems continue to improve, we recognise that there are areas to develop further. These include the quality of objective setting, the consistency of measurement and performance management outputs across the firm.

"Almost nine in ten of our people said they believed in the values and principles of the firm"

Development planning is also an integral part of our performance management system. Employees are encouraged to address their personal development needs and plan actions to meet them. In 2004, 78% of our employees believed there were opportunities for personal growth and development.

The success of these mechanisms is highlighted by consistently positive feedback from the firm’s employee opinion survey, ‘PULSE’. An excellent response rate demonstrates that employees want to express their views and feel that the firm listens to, and acts on, those views. The survey is administered by a global survey provider, and consistently BDO Stoy Hayward out-performs all of the provider’s comparator norm groups both in performance management and the majority of other categories.

It’s been an exciting time for the firm and for the HR team. We won the ‘Accountancy Age Employer of the Year Award’ in both 2004 and 2005, a performance
unrivalled by any other firm. In 2005 BDO Stoy Hayward was also awarded ‘Best Large Firm’ by Accountancy Age magazine. We were delighted to be listed as one of the UK’s top employers in The Sunday Times’ ‘100 Best Companies to Work For’ survey. Almost nine in ten of our people said they believed in the values and principles of the firm. As one employee commented: ‘One of the main reasons I joined BDO Stoy Hayward was because I liked what you were doing on values’.