Full Description
Partner compensation and how partners share profits is central to the cohesive fabric of any professional partnership. While one adage says that "there are as many profit-sharing systems as there are partnerships", there has recently been the emergence of a global practice about what "merit" means and how risk and reward are shared among partners in professional service firms.
In The Partner Remuneration Handbook, Michael Roch and Ray D'Cruz provide guidance for senior partners, managing partners, partnership boards, remuneration committees and others involved in the partner compensation process (department heads, CFOs, HRDs), on designing effective profit-sharing systems, reaching fair reward decisions efficiently and implementing motivating contribution management processes.
Filled with practical insights, this book draws on principles of partnership, motivation and incentives in human capital management, and executive compensation in closely held businesses. Looking beyond the numbers, the authors balance the big picture with a detailed how-to for any professional partnership irrespective of geography, size and maturity.
This title encompasses three core elements:
Exploring the different partner reward systems found in most professional firms.
Showing how partnerships define and discuss partner contribution commitments that further the firm's overall strategic, operational and financial objectives.
Providing decision-making guidance about marrying reward to performance and on Remuneration Committee governance.
It also addresses a myriad of special topics, such as rewarding partners in management roles, and provides a proven approach for how firm leaders can take partners with them on the journey of evolving their partner compensation system.
Contents
Preface 5
Acknowledgements 7
Part I. Introduction
1. Trends shaping partner reward 9
2. The three partner remuneration elements in context 13
Part II. Reward structures in professional partnerships
3. The seven primary partner reward systems 27
4. Formula systems: cost sharing, 'eat what you kill' and fixed allocation 31
5. Merit systems: financially driven versus holistic meritocracies 51
6. Lockstep systems and their variations 81
7. A partner's profit- sharing waterfall: drawings, bonuses and distributions 103
8. Corporations operating as partnerships, internal markets and talent ecosystems 115
Part III. Managing partner contribution
9. The future of partner contribution management 125
10. Motivating achievement-orientated partners 133
11. Using partner contribution frameworks to align partner contribution with firm strategy 145
12. Aligning personal objectives with partner contribution expectations 155
13. Using measures, metrics and KPIs 167
14. Partner accountability through ongoing conversations and informal check-ins 185
15. Self-assessments, ratings and other design considerations for formal partner reviews 191
16. Conducting effective partner review conversations 203
17. Addressing underperformance 211
18. Using technology for better partner contribution management 221
19. Analytics: using quantitative and qualitative data for evidence-based decisions 231
20. The role of HR and business services in partner contribution management 237
Part IV. Partner reward governance and decision making
21. Key elements of effective reward governance 245
22. Remuneration committee basics: when to have one, its remit and its members 247
23. Managing to an annual calendar 263
24. Reward round preparation, heuristics and decision aids 271
25. Reaching reward conclusions while avoiding biases 281
26. Transparency in reward communications: nuances of open and closed compensation systems 289
27. Appeals: benefits, drawbacks and process considerations 297
Part V. Special issues
28. Collaboration among partners 303
29. Rewarding partners in management roles 313
30. Diversity, equity and inclusion 329
31. Partner reward in international partnerships 337
32. Engaging partners in remuneration policy changes 353
33. Well-being and mental health 367
Part VI. The way ahead
34. Ten principles for partner remuneration systems in ambitious professional services firms 375
About the authors 381
About Globe Law and Business 383
