The performance review process in the big 4 is where the rubber meets the road. It’s where everything regarding your career is determined. It determines whether you will get promoted, whether you get a good raise, a good bonus or whether you will be coached out of the firm. This is also where new partners are determined. It’s essentially the end goal of a career in the big 4. If you’ve always dreamed about working at the big 4 and having a great career in the big 4, then you should be thinking of your approach for big 4 performance review season.
Performance review involves having your performance for the year analyzed and recorded officially with human resources. This is an essential part of any corporate job because lawsuits and legal issues can arise from not having performance reviews and providing feedback to employees.
The official performance review process is really just for documentation for HR purposes to have a consistent review file. A review file for HR to track your performance, for you track your performance and for determining compensation. Additionally, if the big 4 want to get rid of people, the performance review process is typically where that process starts.
I wanted to cover this process since annual performance season is upon us in the big 4.
Logistics of the Big 4 Performance Review Process review process
First off, there’s the official performance review. This typically aligns with the big 4 firm’s fiscal calendar. There are typically two review points. One at the end of the fiscal year for the firm you work at and one in the middle of the fiscal year. The big 4 typically send out emails about how the process works, and they tell you the timeline to submit your performance review requests. They also provide the timeline for when you can expect them back. They also provide a time of when the group review meeting is. Only group leadership is invited to those meetings. Performance is reviewed on a group basis. Groups are aligned by market, line of service and industry. For example, if you work in financial services consulting in London, UK, then you would be assessed against other individuals in the London Consulting Financial Services practice. You would not be assessed against other groups.
The performance review process begins with you initiating a request to your supervisor to review your work. You have to summarize the work that you did during that time period. Depending on the firm that you work for you will have at least two review periods a year, the midyear and the end of the year.
After you submitted your request, the person reviewing you for that engagement will rate you on your skills and contributions to the team. Typically, there is a skill rating system. Some firms just have generic feedback where your feedback is provide in a more generic form rather than on a formal skill assessment. The feedback is usually provided around business skills like your ability to complete technical work, your ability to communicate, your ability to delegate, your ability to understand your responsibilities, your ability to perform work by yourself with little guidance, or your relationships with your clients. After you receive your ratings for all your client engagements, they are typically submitted to your coach or mentor at the big 4.
That mentor then presents your file to the leaders of your group.
If you want more guidance on how to write the best performance review and prepare for the big 4 performance review process, then you need to make sure to subscribe to our podcast but we also we have a patreon page where we have released an additional podcast on how to have the best performance review at the big 4.
Now that we’ve covered how the process works let’s go into a little deeper analysis.
The Process Is Not Transparent Nor Is It Objective
One thing that confuses a lot of people during the big 4 review process is that they think the process is completely objective and transparent. This isn’t completely true. So much of it is subjective and happens behind the scenes and is determined by personal relationships. Very little is determined based on a person’s ability to work hard and be a technically strong accountant.
Another thing to say about big four accounting firms review process is that it should never be a surprise each year when it comes time for performance review as to what your review will be.
You should always know ahead of time how your performance is going to be rated. If you don’t know what your review will be ahead of time, then you are leaving your review up to fate.
Decisions are made behind the scenes
The real decisions are made behind the scenes before the performance review season is really in full force. Partners know what ratings they are going to give people for the most part, but it is not always up to the partners to determine how review ratings will be distributed.
Sometimes rating distributions are determined by firm leadership in conjunction with HR. Firm leadership will provide guidelines to HR on how to rate individuals. HR then receives that information from leadership and provides that to partners in the each group. Partners are told how many people can get the top ratings that year and how many people need to get the lowest ratings.
You can lose your jobs as part of the big 4 accounting firms performance review process
If the firm or group is performing poorly, the leaders of that group are also told how many of those lowest rating people need to be fired or removed.
This is becoming a lot more common in the big four accounting firms recently because they overhired at the associate level. This isn’t just one firm either. Multiple firms overhired, so I’ve been seeing a lot of downsizing across the board at the big four where the lower tier associates are more likely to get documented out of the firm.
In the past, that wasn’t the case. In past years even if you were a bad performer, they kept you around because more bodies meant more revenue. However, the big 4 see that clients don’t value associates anymore.
They value technology.
This is because the lowest of the low at the big four don’t have many skills that can be utilized by clients right away. Associates have to learn before they can contribute. I think this is why accounting curricula at colleges around the world will change to include technologies like data and analytics similar to the the master’s progam that KPMG is developing with multiple universities. Big 4 candidates will be expected to know about alteryx, salesforce and tableau right out of the gate.
You don’t come into the big four knowing how to read a ledger or how to prepare a return, and the big 4 aren’t always willing to help.
Oftentimes, you step in the door of the door at the big 4 with people that don’t want to train you.
They rather utilize software to perform their work. Associates used to be able to contribute right away by making copies with a copy machine, they could fax documents to other offices or clients, or they could be utilized to tick and tie physical workpapers, but a lot of that has been removed the technology.
To get rid of associates that they don’t need, the largest accounting firms try to bucket as many associates as possible into this lower tier of performance ratings.
With that being said, partners know who can get the highest rating and who can get the lowest rating and that’s determined before the review meetings that we referenced earlier.
Just because you get a good review doesn’t mean you will be a top performer
Based on that determination as the leadership level, your performance review will fit into those predetermined buckets. Your final rating might not match your individual review ratings.
For example if even if you get a good review from somebody you work with, there might be enough room for you to be an outstanding or top performer in your group.
People might really like working with you, but there’s not room for everybody to get top performer in your group. You might just get an average type of rating for a number of reasons.
One reason they might not give out top ratings in your group is because of compensation. If they give you the top rating, then they might have to give you the top compensation package or a really large bonus. This is because the HR handbook for a lot of these firms requires top compensation to go to top performers.
In order to keep compensation costs fixed, they will bucket you into middle of the pack or a lower tier.
You have to be careful of partners and markets in the big four that aren’t performing well or that have lost of the client because there’s more tendency for people to go into those lower buckets. If your partners aren’t real active in selling work, then they’re not going to generate that much revenue which means they won’t be allocated additional compensation for bonuses or salary increases. Partners are selfish during review time, and any increases in compensation go to them first.
Then they allocate compensation to the staff. So, you don’t really want to work in a group where your partners are not that active in selling work or maintaining good client relationships. Even if you are a great performer in a low performing group, you might not get a good rating or good compensation.
A key part of the performance review process is going to a group that is doing well. If the group is doing well, then you can receive more compensation.
This is where you have to keep your ear to the ground on emerging trends.
You have to pay attention to our podcast and our website because there are industries that are growing like blockchain and cyber security. There are certain parts of the tax groups with U.S. tax reform that are also growing quickly.
You want to trend work in these groups because these groups are going to get additional compensation and you’re more likely to receive a better review.
The reason you’re going to receive a better review in those groups is because there is so much work to be done that if you just help by removing a small amount of work from someone’s to do list then that is enough to give you a high review.
Alternatively if you think about a group with no work or the same type of work year-over-year, it’s hard to stand out because there isn’t much work to go around. With the little work that you do get in that type of group you really have to overperform in order to stand out.
If you want more guidance on how to write the best performance review and prepare for the big 4 performance review process, then you need to make sure to subscribe to our podcast but we also we have a patreon page where we have released an additional podcast on how to have the best performance review at the big 4. We are also going to have content such as performance review checklists and guidance on how to set goals each year. Have questions about the performance review process? Ask questions in the comments.