"This is how young managers learn leadership - quickly and effectively."

undconsorten supported KPMG Germany for two years in developing and introducing an innovative and comprehensive HR concept under the motto "Strengthening leadership. Promoting strengths" to develop and introduce an innovative and comprehensive personnel concept. The result is a new management structure in which young managers take on more disciplinary responsibility. In this interview, KPMG CEO Frank Grube explains why it makes sense to replace ratings with qualified feedback in order to promote employee development. And how it is possible to retain them in an aggressive market environment and reduce staff turnover.

undconsorten supported KPMG Germany for two years in developing and introducing an innovative and comprehensive HR concept under the motto "Strengthening leadership. Promoting strengths" to develop and introduce an innovative and comprehensive personnel concept. The result is a new management structure in which young managers take on more disciplinary responsibility. In this interview, KPMG CEO Frank Grube explains why it makes sense to replace ratings with qualified feedback in order to promote employee development. And how it is possible to retain them in an aggressive market environment and reduce staff turnover.

What motivated you to rethink leadership and development at KPMG?

Our main goal was to offer all employees attractive opportunities to develop. This gave rise to the question of how we can provide them with effective and targeted support in their development. Do we focus more on the potential for improvement? Or do we focus on the specific strengths that each individual has? We found this approach more convincing.

What are the key points of the new HR concept?

We are shifting the disciplinary management responsibility for employees, which previously lay exclusively with the very senior managers, to the managers and senior managers and want to involve them as early as possible and empower them to develop employees. In this way, we are placing management on a broader footing. The new roles taken on by HR coaches and HR partners are particularly important here: The coaches primarily support our younger managers. The HR partners are senior contacts for management and development issues who play a central, guiding role in the development process of all employees - for example, when they moderate the development conferences.

Auditors work with a sharp pencil. How does the new management concept pay off for KPMG?

Of course, figures are very relevant in the Big Four. That's why we first calculated the business case and asked ourselves what costs our previous management concept was causing. On this basis, we determined how high the average expenditure for the desired management cascade is likely to be. As a result, we are now slightly higher. However, we expect a significant improvement in the quality of leadership and other positive effects: Employee loyalty to KPMG and a reduction in staff turnover despite an aggressive market environment.

Partner-driven organisations are often very conservative. How did you convince your 700 partners and directors?

In order to anchor the concept in the company, we quickly went from the Executive Board to the management teams, explained the content and asked whether we had overlooked anything important. Partners and directors were informed in large dialogue formats with the involvement of the Management Board. We answered questions and facilitated critical discussions in dialogue rounds and workshops. Ultimately, the new HR concept entails a major change in our management culture.

One of the cornerstones of the concept is the decision not to evaluate the individual performance of employees in the form of ratings. Has this been well received by employees?

Firstly, it is important to realise that in the past, ratings had a direct influence on variable remuneration. Performance was assessed on a scale of 1 to 5. In the employee appraisals, we usually spent a long time discussing just the number and the actual feedback and dialogue about personal development were neglected. Now every employee receives qualified project feedback from their operational managers on the project - on the technical skills learnt on the assignment and on their specific strengths and development areas, with a clear focus on strengths. The line manager must then answer six simple closed questions to reflect on the employee's performance and possible next career steps, for example on their particular performance contributions or how they rank in their peer group.

Isn't there a risk that this could lead to shadow ratings?

In an organisation with a strong focus on numbers, there is certainly a risk that alternative assessment models could develop. So far, however, we have been able to avoid this at KPMG. And we will continue to keep a very close eye on this in the future.

The new concept focusses on employee development. What changes have there been for individuals?

The personnel concept for young employees below the manager group has now been in place for a good year and a half. During this period, there have been two remuneration rounds in which the senior managers have discussed and individually determined salary increases and bonuses for their employees. In addition, specific development steps and measures for the next twelve months were set out in writing at development conferences. It is now crucial that we manage to implement the elements of the development plan on a day-to-day basis. The group of managers and senior managers is experiencing the change from two perspectives: On the one hand, they are involved in employee management as technical and, in some cases, disciplinary supervisors and naturally have to provide feedback on projects as responsible managers. On the other hand, they themselves are managed by directors and partners. The management culture is therefore characterised both by the way in which they deal with their employees and by the managers' expectations of their disciplinary superiors and partners. The main change for partners and directors is that they have handed over some of their disciplinary management responsibility, namely that for junior employees, to middle management. They continue to play an important role in their role as partners and as disciplinary superiors for managers, i.e. they decide on development and remuneration for this target group.

Looking back on the developments of the past two and a half years, what are the biggest successes of the new HR concept?

One clear success is how the managers fulfil their role as disciplinary superiors, how they approach employee appraisals and remuneration reviews with a high sense of responsibility and how the organisation gives us very positive feedback on this. All stakeholders confirm that we have been able to improve a lot here: the employees themselves, the HR partners and also our works councils.

KPMGis itself a professional services firm. In your opinion, what added value does an external consultant bring to a project like the HR concept?

I like to compare it to football: just as there are a good 80 million national team coaches in Germany, there are at least as many HR experts as partners and directors in every professional services firm. However, this also means that an experienced consultant is needed to provide an external perspective, act as a coach and hold up a mirror to those responsible in the company with their experience.

HR is often accused of being too far removed from the business. How does the HR concept actually benefit the business?

Because we get to know the skills and strengths of our employees very well at an early stage, we can promote their development in a more targeted manner and at the same time train them much more broadly - for example, by assigning employees to different business areas as part of rotation programmes. This qualified versatility is increasingly in demand. For the past three to four years, we have noticed that, in the course of digitalisation, our clients particularly value consultants who think outside the box as business people and managers, but also as dialogue partners, and who are familiar with different topics and approaches to solutions.

You have now handed over the management of HR and took over responsibility for the Tax and Law services on the Executive Board at the beginning of October. How are you and the management team implementing the HR concept in this area?

The HR concept must be the benchmark for best practice in both services. We hope that this will lead to a further reduction in staff turnover. And we also want to achieve a targeted and comprehensive development of our employees.

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Dr. Jens Müller-Oerlinghausen
Dr. Jens Müller-Oerlinghausen
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