10 August Rewarding property management performance August 10, 2016 By Reef Admin Allowances, General 0 Incentive programs for property managers are a great way to reward exceptional employees for reaching work goals, achieving milestones or simply doing a good job. REEF CEO Bryan Wilcox explains. As I travel around NSW and meet with members of REEF and REINSW, it’s been refreshing to find that many real estate agencies are at last embracing the idea of rewarding their property managers for achieving goals that are over and above base expectations. From fairly traditional programs to those encompassing every aspect of the property management relationship, there seems to be no end to the range of incentives that employers are offering to their property managers for delivering increased revenues and growing the employers’ property management asset. Some of the incentive programs I’ve seen include the payment of part of the letting fee or management fee. Others deliver bonuses for increasing rents or achieving a certain number of leases in excess of a specified target. Others still include incentives for converting a management into a sale or vice versa, rewards for new management leads, or incentives for minimising arrears. Many programs are based on a pooled reward system, where the property management team as a whole is rewarded for exceeding their collective target. Unlike sales, where results are rewarded primarily on an individual basis, the success of most property management teams requires a collaborative approach; team members rely on each other for overall success, so it makes sense to reward the whole team rather than the individuals. Property management incentive programs have a proven track record of success. They motivate employees and increase the overall performance of the agency, and they show employees that the employer values their work. 5 key elements of an effective property management incentive program 1. KEEP IT SIMPLE – Make sure it’s easy to understand Many disputes between employers and employees are the product of a misunderstanding about how the incentive is to be calculated and paid. Therefore the incentive program should be easy to explain, easy to calculate and clear about when it is payable. It should give consideration to the relevant PAYG and superannuation obligations that arise from the incentive payment and this should be made clear to employees. Including employees in the development of the incentive program can help to ensure they value the rewards and see them as worth the effort. Employers should value employee input and put an appropriate incentive structure in place accordingly. Clearly, employees who see the incentives as worth the effort will be more motivated to work hard to obtain them. Importantly, to comply with obligations imposed by the Award, the agreed incentive program must be in writing. Employers may also want to provide for a process where the program can be reviewed and adjusted after it has been in place for 12-18 months. 2. MAKE IT MEANINGFUL – Actions must have a direct impact on results There’s no point having an incentive program in place if it fails to add to the value of the property management asset or increase property management revenues. Equally, the incentives payable should be offset by any corresponding loss of managements or income during the period. In other words, the program should reward employees for net increases only. 3. MAKE IT FAIR – Make incentive programs fair across the agency Over the years, I’ve seen many incentive programs where the sales team receive a larger reward than the property management team for bringing in a new management. It just doesn’t make sense. If the incentive program is to be seen as credible by all employees, then it should be applied fairly across the agency in order to incentivise everyone to build the business. 4. MAKE IT OBJECTIVE – No subjective opinions The property management team are more likely to embrace and respond to an incentive program where the rewards are clearly defined and are not subject to application in a random or indiscriminate way. 5. MAKE IT MEASURABLE – Share progress against goals frequently The best incentive programs are the ones where progress can be measured on a daily or weekly basis. The property management team are more likely to stay engaged if they can see how their performance is progressing. A simple scoreboard or dashboard where they can view their performance in real time will allow them to accurately assess their own performance and have realistic expectations about the potential rewards they may receive. This article was first published in the REINSW Real Estate Journal (July-August 2016 edition). Related New REEF Management Committee elected The Australian Electoral Commission recently conducted elections for the 2017-18 REEF Committee of Management. Congratulations to those members elected to the Committee. Guesswork, be gone! People Management System updates Members will benefit from the recent review and comprehensive update of the templates, policies, forms and other documents available via REEF's award-winning People Management System. Performance Matters Running a real estate business requires courage, commitment, and determination. It's hard but rewarding - even in the face of tough managerial issues that are difficult to resolve. Real Estate Industry Award: Out with the old, in with the new After a long battle, the Fair Work Commission has now finalised the four-year award review and the new Real Estate Industry Award will commence on 2 April 2018. Here's what you need to know before the changes kick in. How should I manage an underperforming employee? Most businesses will experience a difficult, uncooperative or underperforming employee at some stage. You have to deal with them, but how? Election results: New Committee of Management announced REEF is pleased to announce the results of the election for the Committee of Management. Here's who has been elected to represent your workplace interests for the coming two-year term. Comments are closed.