THE FOLLOWING performance evaluation illustrates how one company’s value system (PILLAR) is linked to its performance-evaluation criteria. Be sure that your evaluation questions are linked to your own company’s busi- ness strategy and unique value system. Evaluation of: Evaluation period: Your position: ❏ Client service ❏ Administrative staff Instructions: The purpose of performance evaluation is to acknowledge areas of strong performance, provide reinforcement, and discuss areas for development. Evaluators are encouraged to: ! Reinforce areas of strength by commending good performance ! Identify areas needing development and provide specific examples ! Establish a measurable goal for primary areas of performance where improvement or additional experience is needed During my work with this individual, I have found that he or she (please comment in each area): 208 WORKSHEET 5 Upstream Evaluation T HE P ILLAR Passion for Excellence Integrity Lifetime Learning Leading by Example A Balanced Life Respect for Others Passion for Excellence Integrity Lifetime Learning Leading by Example A Balanced Life Respect for Others Source: © Moss Adams LLP PASSION FOR EXCELLENCE Is technically proficient, provides good advice, and is able to answer my technical questions. ❏ Consistently ❏ Usually ❏ Sometimes ❏ Rarely ❏ Not rated Evaluator’s comments: Demonstrates a passion for excellence in his or her work. ❏ Consistently ❏ Usually ❏ Sometimes ❏ Rarely ❏ Not rated Evaluator’s comments: Provides noticeably superior service to our clients. ❏ Consistently ❏ Usually ❏ Sometimes ❏ Rarely ❏ Not rated Evaluator’s comments: INTEGRITY Recognizes the full range of our clients’ needs and recommends value- added services that improve their business results. ❏ Often ❏ Occasionally ❏ Seldom ❏ Never ❏ Not rated Evaluator’s comments: Delegates challenging work that is appropriate for my level of experience. ❏ Delegates work appropriately ❏ Delegates assignments that are too easy ❏ Delegates assignments that are too difficult ❏ Not rated Evaluator’s comments: Includes me in meetings with clients. ❏ Often ❏ Occasionally ❏ Seldom ❏ Never ❏ Not rated Evaluator’s comments: U PSTREAM E VALUATION 209 210 A PPENDIX LIFETIME LEARNING Helps me to develop my skills by providing opportunities for growth and challenge. ❏ Often ❏ Occasionally ❏ Seldom ❏ Never ❏ Not rated Evaluator’s comments: LEADING BY EXAMPLE Conducts productive and timely performance evaluation meetings. (Please check “Not rated” if this person is not responsible for giving you written evaluations.) ❏ Consistently ❏ Usually ❏ Sometimes ❏ Rarely ❏ Not rated Evaluator’s comments: Makes time to be accessible when I have suggestions, questions, or prob- lems. ❏ Consistently ❏ Usually ❏ Sometimes ❏ Rarely ❏ Not rated Evaluator’s comments: Listens attentively and is interested in my opinions and thoughts. ❏ Listens intently ❏ Is usually attentive ❏ Often does not hear what I am saying ❏ Not rated Evaluator’s comments: Gives me recognition for my contributions and efforts. ❏ Often ❏ Occasionally ❏ Seldom ❏ Never ❏ Not rated Evaluator’s comments: A BALANCED LIFE Understands that it is important for staff members to maintain balance in our lives. Source: © Moss Adams LLP ❏ Consistently ❏ Usually ❏ Sometimes ❏ Rarely ❏ Not rated Evaluator’s comments: RESPECT FOR OTHERS Treats people with respect. ❏ Consistently ❏ Usually ❏ Sometimes ❏ Rarely ❏ Not rated Evaluator’s comments: What do you most like about working with this individual? Do you have any suggestions for improving your working relationship? U PSTREAM E VALUATION 211 THE FOLLOWING TABLE is an excerpt from the 2003 FPA Compensation and Staffing Study. It illustrates how to interpret and use the data tables the study provides for each job title. Whatever analysis or salary survey you employ to review your business should consider the same questions outlined here, so that you can be sure you’re using the data appropriately and effectively. 212 WORKSHEET 6 How to Use Compensation Benchmarking and Salary-Survey Data PARAPLANNER Primary Function K A technical position responsible for the detail work in developing modular or compre- hensive financial plans for clients in support of a relationship manager. Limited client contact except in meetings, data gathering and follow-up. Number of positions reported: 267 % who are owners: 0.4 Median % ownership: 25.0 < $250,000 $250,000– $500,000– >$1,000,000 $500,000 $1,000,000 Positions reported, by firm revenue 10.5% 13.9% 24.3% 51.3% Salary + Commission Ownership Salary Only Incentive Only Distribution Combination No Data Compensation method 43.1% 45.7% 0.0% 0.0% 6.0% 5.2% Lower Upper Compensation information: Quartile Median Quartile Base compensation $32,500 $38,000 $45,759 % reporting bonus 48.9% Bonus $1,309 $3,000 $5,043 Median bonus, % median salary 7.9% % reporting commissions 4.9% Commissions $5,000 $10,000 $21,000 % reporting ownership distribution 0.4% Ownership distribution $670 $670 $670 Total compensation $35,000 $40,000 $50,000 Factors impacting compensation: Variance as a % of median base compensation Lower Upper Quartile Median Quartile Experience (in years) 3 5 8 Variance in salary by work experience 89% 105% 139% Tenure (in years) 1 3 5.75 Variance in salary by tenure 105% 97% 123% How many firms of similar size employ someone in this role? Start the discussion with the median base salary. Does the position typically receive a bonus? What will the bonus be in your organization? How does it compare? How will the total com- pensation compare? Source: © Moss Adams LLP Based on the simple analysis described above, establish a range of base compensation for the employee and then determine the final compensation inside the range based on the characteristics of that individual. PARAPLANNER (continued) CFP CFP certificate holder 14.6% Variance in salary if CFP certificant 111% $250,000– Population of local market <$250,000 $1,000,000 $1,000,000 + No Data % of positions reported by population 18.4% 23.3% 54.3% 4.0% Variance in salary by population 83% 95% 105% Most common secondary functions No Secondary O N, Q Other % reporting secondary function 49.8% 13.1% 6.4% 30.7% Variance in salary by secondary function As a % of median base compensation 100% 101% 89% As a % of total compensation 100% 106% 94% Full- vs. part-time: Full-Time Part-Time No Data % of positions reported 83.5% 15.7% 0.7% Lower Upper Quartile Median Quartile Annual salary for part-time $19,500 $25,000 $30,000 What impact does the location of your firm, the employee’s level of experience, and his/her secondary functions typically have on base pay for this position? H OW TO U SE C OMPENSATION B ENCHMARKING AND S ALARY -S URVEY D ATA 213 RECORD YOUR DOLLAR BALANCES in the dollars column ($). Remember that total assets need to equal total liabilities and equity. Divide all dollar balances by total assets to arrive at the percentages (%). Dollars and Common Size Percentages ($) (%) 1 Cash 2 Marketable securities 3 Accounts receivable—net 4 All other current assets 5 Total current assets (sum 1 to 4) 6 Property 7 Furniture, fixtures, and equipment 8 Other fixed assets 9 Total gross fixed assets (sum 6 to 8) 10 Less accumulated depreciation 11 Total net fixed assets (9 minus 10) 12 Other long-term assets 13 Total assets (sum 5, 11, and 12) 214 WORKSHEET 7 Balance Sheet Source: © Moss Adams LLP Dollars and Common Size Percentages ($) (%) LIABILITIES AND EQUITY 14 Notes payable 15 Taxes payable 16 Accounts payable 17 Accruals 18 Current portion of long-term debt 19 All other current liabilities 20 Total current liabilities (sum 14 to 19) 21 Long-term debt 22 Other noncurrent liabilities 23 Total long-term liabilities (sum 21 and 22) 24 Total liabilities ( sum 20 and 23) 25 Equity (net worth) 26 Total liabilities and equity (sum 24 and 25) B ALANCE S HEET 215 RECORD YOUR DOLLAR EXPENSES in the dollars column ($). Divide all dollar expenses by the total revenue to arrive at the percentages (%). 216 WORKSHEET 8 Income Statement Dollar and Common Size Percentages ($) (%) 1 Asset-management fees 2 Planning and consulting fees 3 Securities commissions—current 4 Securities trails 5 Insurance commissions —new or first year 6 Insurance renewals 7 Other revenue 8 Total revenue (sum 1 to 8) 100% 9 Nonowner professional salaries 10 Commissions paid and other direct expenses 11 Owners’ draws or base compensation 12 Total direct expense (sum 9, 10, 11) 13 Gross profit (8 minus 12 ) 14 Advertising, public relations, and marketing 15 Auto expenses 16 Charitable contributions Source: © Moss Adams LLP Dollar and Common Size Percentages ($) (%) 17 Client appreciation 18 Depreciation and amortization 19 Dues (clubs) 20 Dues (professional) 21 Employee benefits 22 Equipment leases and purchases 23 Insurance 24 Office expense 25 Other salaries 26 Payroll taxes 27 Professional services 28 Rent 29 Repairs and maintenance 30 Software and hardware expense 31 Tax and licenses 32 Training and continuing education 33 Travel and entertainment 34 Utilities, phone, fax, and online service 35 All other expenses 36 Total overhead (sum 14 to 35) 37 Operating profit (13 minus 36) I NCOME S TATEMENT 217 . liabilities (sum 21 and 22) 24 Total liabilities ( sum 20 and 23) 25 Equity (net worth) 26 Total liabilities and equity (sum 24 and 25) B ALANCE S HEET. >$1,000,000 $500,000 $1,000,000 Positions reported, by firm revenue 10.5% 13.9% 24. 3% 51.3% Salary + Commission Ownership Salary Only Incentive Only Distribution