Accounting Firm Instructional Improvement and Productivity Plan

Introduction: The Productivity and Motivation Challenge

An accounting firm is a service-based business, and the surest way to acquire profitability lies in maintaining high efficiency among its personnel. The key issue guiding our firm's strategy is the goal to increase the efficiency of our workforce, as well as to stimulate greater productivity and motivation, without sacrificing the quality of our product, incurring higher costs, or damaging employee morale. Employees who lack a strong sense of personal commitment and accountability simply do not possess the understanding or motivation to achieve their highest potential productivity. Studies have directly correlated increased productivity with heightened motivation. An employee without this internal drive will not work very hard, jeopardizing productivity while undermining other vital areas, such as customer service and quality of work. The goal of this plan is to increase overall profitability, and the central accountability challenge is to devise a system that motivates staff to increase productivity without sacrificing work quality.

According to James Lindner, in his article "Understanding Employee Motivation," most contemporary authors and experts define motivation as "the psychological process that gives behavior purpose and direction" (Lindner, 2002). Others define it as the way in which someone behaves in order to achieve unmet needs, and as an internal drive undertaken to satisfy an unsatisfied need. In the business world, motivation underlies an "inner force that drives individuals to accomplish personal and organizational goals." We assume that encouraging employees to meet those goals directly corresponds to an increase in productivity and efficiency.

Yet measuring an intangible like motivation can prove challenging when a firm requires proof that productivity is on the rise. Lindner captures the essence of the difficulty in stating, "whereas once employees might have been motivated by money, these days, motivation (and therefore productivity) are linked to a series of complex factors" (Lindner, 2002). Indicators and assessments can often help determine whether a productivity or morale program is actually effective. This paper examines the tangible measures available — such as performance indicators — and then analyzes the causes of underachievement and low motivation. The study also includes actions that might resolve these problems by introducing motivational theory and discussing the outcomes of such an approach.

Any kind of performance indicator or assessment involves something that can be measured and recorded. Because of the difficulty in measuring or recording motivation directly, the numeric measurements employed in this study assess employee productivity via an index, using a survey to evaluate an employee's work habits and ability to handle the workload, and to determine whether the employee is engaged in continuing professional development through training and continuing education.

This is a weekly numeric assessment based on an index. Results are ranked from the lowest chargeable hours through the highest and posted in the mailroom. A monthly chargeable-hours review for each employee provides the easiest, fairest, and most reliable method to rate motivation. This review may be conducted in-house. To guarantee the validity of the assessment, the firm should hire an outside consulting firm on an annual basis to perform a peer review based on available paperwork.

Performance Indicators and Assessments

At a service-oriented company such as a CPA firm, most personnel fill out time cards to bill specific time to clients. Studying these time cards to determine productivity levels can reveal interesting and vital information to the firm's management. For example, the data will show whether employees are spending too much time on a particular client or activity and explain why this is so. Management can also learn whether employees are fulfilling their daily quota of work. This assessment can be conducted using a linear scale and may incorporate the following performance indicators:

This method takes into account a variety of factors that, when considered independently, might skew findings. Some employees may be assigned more difficult tasks than others, resulting in a low paper productivity that does not accurately reflect the actual level and quality of work. On the other hand, others might demonstrate a high level of productivity but at the cost of work quality. By incorporating these multiple performance measures, this evaluation should be more reliable, valid, and equitable.

The downside of using the time card as a measurement device is that employees are human and might tend to stretch the truth. This assessment assumes that the information on the time card is accurate and not merely an attempt to pad hours for billing purposes. However, one must consider the possibility that an employee who bills an hour to a specific client might actually be unproductive for half of that time. This human factor makes the second component of the measurement — employee and supervisor communication — critically important. The consequence of this assessment is that the productivity index of every employee is posted in the office for all to see.

Using a bell-curve analysis of the time card results to design either a binary or tiered classification survey with employees, one practical way to troubleshoot low motivation and ascertain a true measurement of productivity is to speak directly with the employee and the immediate supervisor about how the employee feels about his or her work. This survey generates a numeric score from both the employee and the supervisor based on a scheme in which 1 = always, 2 = often, 3 = sometimes, 4 = seldom, and 5 = never.

When the numeric score is low (average of 1–2), the employee receives a ranking of Satisfactory. When the score is high (average of 3–5), it results in a Needs Improvement ranking, which requires the supervisor and the employee to develop an action plan to bring performance up to a Satisfactory level. The survey questions include the following:

This assessment provides the employee with an opportunity to discuss problems regarding work and workload, and allows the supervisor to determine the cause of any decline in productivity. When communicating with employees, management should avoid posing yes-or-no questions. Instead of asking, "How's your workload?" — which might elicit a brief "Fine" — the line of inquiry must actively engage the employee in a discussion about workload challenges. Questions like "Do you believe further training or education might be useful?" can open the door to designing effective strategies that increase productivity. Even for the most skilled employee, continuing education offers a viable tool to boost motivation.

Although all certified public accountants are required by the state board to complete a certain number of courses each year to keep their skills current, the greater the interest an employee takes in training or education, the more motivated and capable the firm can assume he or she is. Employees who seek to advance their careers and help advance the company are generally more willing to attend training seminars and take on extra coursework. Conversely, those who simply do not care will do the bare minimum and go home. By measuring continuing professional self-development, the company can determine each employee's motivational level and learn what inspires employees to undergo training and improve their performance. Better-skilled employees also lead to better-quality work and increased productivity.

This assessment is based on a set of education and training commitments upon which the supervisor and the employee mutually agree. The outcome is binary: the employee either met or did not meet the commitments. Meeting all commitments earns the employee a monetary bonus.

All businesses are concerned that a significant gap may exist between their potential and actual levels of productivity, due to problems such as poor organization or inefficient management of time and resources. By evaluating the abilities of their employees, companies can assign each person to the areas in which they excel, and can increase productivity by identifying and removing impediments. An accounting firm is a competitive service-based business in which profitability requires high employee efficiency. Our firm's strategy is to increase the productivity and motivation of our workforce without sacrificing quality, incurring unnecessary costs, or damaging employee morale.

After reviewing the results from the performance indicators, we have identified the following predictors of employee motivation:

Predictors of Employee Motivation

Job security significantly impacts productivity and morale in current economic conditions. In an environment of continuing layoffs and low levels of job creation, the possibility of losing their jobs frightens workers, especially if the company's business prospects have diminished or co-workers have been laid off. Our company has never laid off accountants, which increases employees' sense of job security. However, a vulnerable segment of employees — specifically, foreign nationals who begin employment on F-1 status — have felt more insecure, as they depend on the company to sponsor a working visa or permanent residency based on a determination that their service is valuable.

Many employees take pride in their profession and the work they perform. Managerial attitude can bolster motivation in three ways: support for employees' professional decisions, praise for outstanding work, and demonstrated interest in employees' personal lives.

A lack of diversification in responsibilities causes employees to become bored with performing the same tasks repeatedly. Employees also feel motivated when they perform challenging work they perceive as worthwhile and intellectually demanding. Awareness that they work on complex transactions that require intellectual prowess boosts employees' self-esteem and their work productivity.

Nothing defeats morale more than inadequate pay and inflexible working hours. If monetary rewards do not meet employees' expectations, or if working hours are rigid, employees will migrate to companies that they perceive reward them better. Our company has instituted flexible working hours, which employees appreciate. In addition, the company compensates accountants on the basis of billable hours — the fewer hours they work, the less they receive.

While the discussion above shows several ways to increase employee motivation, there are additional organizational factors that affect work productivity. One such factor is staffing. By evaluating the abilities of their employees, companies can assign employees to projects that best suit their professional backgrounds and personalities. For example, managers can increase productivity by assigning the right number of employees to each project, thereby avoiding over- or understaffing. Managers should also be sensitive to personality conflicts between employees, and where such conflicts are known, they should avoid assigning those individuals to the same team.

Increasing productivity involves a careful study of both employees' work performance and managerial decisions — a daunting process in which individuals may feel unfairly singled out or victimized. While this process can be uncomfortable, it is appropriate when responsibility for low productivity clearly lies with certain individuals. If, however, it is not obvious who is responsible, the best approach is to consider not only individual responsibility but also larger systemic factors. The problem may stem from poor management of people, inadequate allocation of resources, or an entrenched office culture of underachievement, in which case the company should consider whether incentives or corrective measures are the right remedy. If such a culture exists, the company may need to educate employees on how to allocate their time and resources more wisely.

Conclusion and Recommendations

The importance of e-business auditing capability is growing rapidly. Electronic business transactions were estimated to have grown from $100 billion in 1999 to $7.3 trillion in 2004, representing roughly 66% of GDP at that time (Auditing E-business). The benefit will flow to those firms that are able to audit e-business, and that requires converting the organization to a computer-based platform. The use of electronic data processing in accounting is not new — punch card tabulators were used as far back as the 1930s for large-scale government and business applications, and smaller companies began moving to electronic machines in the 1980s with the advent of affordable computers. The transition is therefore a continuation of a long-standing trend, not a revolutionary departure.

In summary, it is clear that technical knowledge is necessary but not sufficient. Organizations also need employees with strong interpersonal and operational skills, including communication, time management, IT proficiency, and project management. The analysis presented in this paper demonstrates that in-house restructuring — supported by a robust performance indicator system, a motivationally informed management culture, and investment in continuing professional development — represents the most cost-effective and morale-preserving path to improved productivity for an accounting firm.

If an organization is determined to pursue this path, the recommended approach is to develop a plan covering the next two quarters. During this period, employees who require training should be taken out in groups — one from each major client-handling team — so that team operations are not disrupted. These employees should then be trained by experts on all relevant aspects of accounting: regulatory changes, common errors, and best practices. The sessions should be less like formal instruction and more like structured discussions, allowing experienced practitioners to share practical knowledge that is not found in textbooks. An alternative approach is to take all employees requiring training to an offsite location during a holiday period and conduct an intensive program at one time, which is faster and allows the firm to address training needs comprehensively in a single effort.

Following the training program, the firm should assess whether the exercise has led to measurable improvement. If employees fail to demonstrate improvement despite investment in training, the firm may need to consider whether those individuals are suited to their roles. Ultimately, organizations facing persistent productivity challenges should give serious consideration to adopting paperless technology or, if resources are insufficient, exploring a partnership or subsidiary arrangement with a larger firm. The trajectory of the accounting profession is clearly moving in the direction of technology-enabled, flexible, data-driven operations, and firms that fail to adapt risk losing both clients and competitive relevance.