• Chiara Toselli

Solving HR’s Top Performance Management Challenges in Professional Services Industry

Employees in professional services industry are hard workers - they work long hours to make sure they can provide the perfect deliverable for their clients. Below we offer some solutions to the top performance management challenges HR can face in the professional service industry.

Performance Management Challenges in the Professional Services Industries

Problem 1: The nature of the operating model

Traditional annual performance reviews just don't work in professional services industry. Often employees in these industries do not work with their direct managers. Rather, employees work on multiple different projects and teams with multiple different managers. This makes it nearly impossible to accurately remember who did what at the end of the year. Managers and peers need to be able to document employee performance throughout the project!

Solution: Implement continuous, 360 degree feedback and have a tool that documents the feedback

Truly continuous, 360 feedback should be implemented - team/project managers and peers should be giving feedback to the employee frequently. Annual reviews just don’t cut it.


Having a feedback tool that is truly continuous and truly 360 (like Pavestep) can ensure that employees' performance is being documented in real-time. Remember that performance reviews are just the aggregation of all the feedback an employee should have received through that review cycle. While documenting real-time feedback may seem more cumbersome at the start of implementation, it is a time-saving process in the long run!


Problem 2: Assessing employee’s work/contribution in a meaningful way

Employee Skill profile
An example of an employee's skill profile on Pavestep

Many employees in professional service firms do not have "traditional" metrics. What is your "KPI" or "OKR" as a consultant - number of hours worked or number of pages produced? These are not meaningful if you are a consultant.


While OKR- and KPI-driven performance management works for many types of organizations, it isn't ideal for some types of professional service firms. Rather, these employees need a system that is more competency/skill-based, using effective feedback to develop and motivate them.



Solution: Implement continuous feedback

Similar to the previous solution, continuous feedback on core competencies (such as leadership, communication, etc) is needed to develop and motivate employees. We recommend training all employees on how to give and share feedback - if feedback is the basis for measuring employee performance when traditional metrics are impossible to use, the feedback better be more than "great job".

Check out our past article on employee feedback examples. Make note of the verbs and sentence structure. 

Feedback quality, not just quantity, matters.

Problem 3: High competition for talent

There is a war for top talent. Professional service firms cannot simply retain employees based on their brand names and hefty bonuses. These firms need to do more - they need to be able to develop and motivate employees and create meaningful relationships. These are top drivers of employee retention.


Solution: Invest in a performance management solution that is geared toward your industry

A great performance management system can help develop and motivate employees through real-time, continuous feedback. The ability for employees to request feedback is also important as many employees in the profession services industry have the desire to achieve and push for more.

At Pavestep, our performance management solution was made for professional service firms. We enable truly continuous, 360 degree feedback. We also run effective feedback workshops. Feel free to reach out to learn more. 

Are you the professional service industry? What other performance management challenges does HR face?