Performance Management. Merit Rating. Four words to strike fear into any professional worried about their potential future with their firm. Your merit rating is far more important than just the ‘will I get a decent pay rise or bonus this year?’ question. Your merit rating determines how the firm will treat you and invest in you going forward.

Let’s give you some examples of how your low merit rating REALLY affects you:

Anyone who has been given a low merit rating – in the ‘under-performing’ category will almost certainly find themselves having some tough conversations about their performance going forward and what is expected of them. There will be some awkward conversations with HR and staff managers, with hoops you will need to jump through to keep your job. Yep, keep your job – it’s that serious. A merit rating in the ‘under-performing’ category is the first step in the disciplinary process to exit under performers. Some firms will give you the opportunity to ‘buck up your ideas’, others will just quickly and quietly compromise you out of the firm. No warning, no ceremony, no time to say good bye, or go back to your desk – and a rather legal document to read and sign which probably puts a gagging clause on you, and stops you talking to any of your now ex-clients. The bigger the firm – or the more pressure it is under to shed headcount – the more likely you will be exited via a compromise agreement. If you think this all sounds rather brutal – you are right. It is. But be under no illusion, it happens in professional service firms, and the bigger the firm the more likely you will know someone who it has happened to.

If your firm tolerates people with an ‘under-performing’ merit rating, your career is now effectively over at this firm. Over? Your really mean over? Yep, pretty much over. You need a very enlightened firm or partner to let you move to a different role – no-one wants to inherit a ‘loser’ on their team. The prime time assignments which you could really show case your talents (which your firm haven’t seen yet) wouldn’t be coming your way. If you have a juicy assignment who are you going to give it to, the star or the under-performer? Projects that you could have once guaranteed being booked on, now go to the firm’s newest and brightest member of the team, to cut their teeth on. Reputation and credibility is everything in a professional services firm – both externally with clients but also internally with partners and assignment managers. Once you’ve been given a bad name, such as a low merit rating, it tends to stick in a professional services firm. That bad name eats away at your chargeable time until you find yourself scrabbling around for work.

One of the best things you can do is actually exit your firm on your own terms. A low merit rating and the subsequent treatment is enough to destroy anyone’s self esteem and confidence. Going to a smaller or bigger firm or heading out of practice may actually save your career and give you the impetus to find the right role and environment to show case your talents properly.

How do I know this? I’ve been there twice, and both times been in a much better place after making the move and being in an environment and culture that worked for me, rather than trying to mould myself to fit the company’s values and standards and ways of doing things. I’ve also seen others struggle for years at a firm, and then really blossom when they make the move to another firm or into practice.

Who else has seen this happen?

In my next post, I will look at the impact of receiving a high merit rating.

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