Abstract: Compensation based on fees collected can energize a firm. Would your staff members be more enthusiastic if they had the power to set their own salaries? One five-person Texas firm decided that staff would thrive under an incentive compensation system. At the same time the firm gives staff responsibility for their own pay levels, it also strives to assist clients in taking greater control over their own business futures. The firm has used entrepreneurial spirit to create a new framework to alter the way it approaches client service and the kinds of services it performs. This innovative approach can serve as a model for firms seeking to help staff and clients expand business. STAFF INCENTIVES Austin-based Bargsley & Associates has a flat management structure. We two partners, two staff CPAs and a receptionist. The computers are the clerical staff, says partner Tom Bargsley. The firm has always sought experienced staff accountants because its clients are mainly closely held businesses with limited staff themselves who are unwilling to take part in teaching junior accountants how to work with a They want answers; they're not interested in training, says Bargsley. The staff CPAs--who both been with the firm for five years--each once owned their own practices, but while they enjoyed working with clients, they disliked the administrative hassle of running a firm. The firm gives the staff CPAs a percentage of fees collected because decided to give them unlimited opportunity for growth, says Bargsley. Each client is assigned a primary in-charge accountant, and that accountant gets substantial revenue for the management, care and feeding of the client. Staff members have an incentive to grow the Plus, we don't collection problems. It is a dynamic that has changed the way we work and the way we think about For example, staff members given this entrepreneurial opportunity are more likely to seek new clients as well as additional ways to serve existing clients. When they succeed at bringing in new business, it not only raises the staff member's salary but also hikes the firm's net income, since there are few overhead offsets to the added business. The staff CPAs continue to receive benefits as before, but they do not an established base pay; their entire salary is made up of incentive fees for the clients they handle. The CPAs, says Bargsley, love this system because removing the barrier of salary, we also removed the limit to what they can make--and salaries increased in each of the five years the system has been used because of added business from both new and existing clients. We given them the opportunity to share in some of the firm's cash flow if they take the responsibility. The staff members' years of experience and background running their own firms helped in the, success of this innovation. For firms creating their own incentive compensation programs, Bargsley recommends working to develop entrepreneurial skills by offering the program on a portion of engagements. This slow beginning will help the firm and staff get used to the program and motivate staff members to take greater control over their salaries and assignments. The program can be rolled out across the firm or among a few firm members who already exhibited entrepreneurial skills and can act as mentors, Bargsley suggests. The program can be as flexible as the firm chooses. If firm members want to cut back on hours because of personal reasons, they automatically receive lower salaries based on the fewer fees collected for the services they perform during their shortened hours. The system has helped hone the staff's client selection skills, since they focus on businesses that are more likely to offer continuing challenges and service opportunities. Clients also value having high-level staff dedicated to their businesses. …
Publication Year: 1998
Publication Date: 1998-12-01
Language: en
Type: article
Access and Citation
Cited By Count: 1
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot