By Pamela Alton
Should a self-storage manager get a bonus? That depends on whom you ask. Of course, every manager is going to say "Yes," and most owners will say, "Only if the manager deserves it!”
By definition, a bonus is something provided in addition to what is expected or strictly due, such as money or other equivalent given in addition to an employee’s usual compensation. A bonus is like respect—it should be earned, not demanded or expected. A bonus is not part of a manager's wage. It is a reward for doing a good job, for achieving or exceeding a goal.
Not all bonus programs are alike, and there is no one-size-fits-all approach. There are a number of factors to consider when designing a program. This article addresses bonus types and considerations for each.
Bonuses can be based on a number of criteria:
- Number of lease signings
- Facility occupancy levels or income
- Collections success or low delinquency levels
- Meeting or exceeding budget projections
- Renting units at full price (no discounts or concessions)
- Property improvement
- Sales of ancillary products and services
- Outstanding performance during a mystery call or shop
Bonuses can also be paid in different ways, such as annually, quarterly or monthly. Besides money, they can be given in the form of vacations or trips, gift cards, or other luxuries such as flat-screen TVs or video cameras. There's no black and white when it comes to a bonus program. Like the facilities they run, managers differ from location to location, and what motivates one does not necessarily motivate another.
Some owners like to use a per-lease bonus, mostly because it's easy to calculate. The manager rents X amount of units, the per-rental bonus is paid at X dollars, which equals so much per month. Does it motivate the manager? Probably not.
Isn’t renting units what a manager is already getting paid to do? Why reward him for something that's already part of his job? If you're opening a new facility, then maybe a per-lease bonus could be part of an overall bonus package. With a new facility, you have hundreds of units to rent. But at some point, there will be fewer units to rent, and the rental bonus should dry up.