A solid bonus and incentive program can entice your self-storage managers to be more successful, which can lead to better occupancy and revenue for your facility. Determining what kind of program to offer is the tricky part. Many owners have experimented with different approaches, such as pay-per-lease bonuses, step bonuses for stores in lease-up, and bonuses on specific items such as truck rental or collections. Incentives can also be tied to certain timeframes, such as quarters or year-over-year.
Unfortunately, there’s no one-size-fits-all program. What works for one storage business may not work for another. That said, here are a few general principles to keep in mind when building your staff bonus and incentive plan.
Paying a monthly bonus works best. First, it gives managers something they can plan for and anticipate. Second, if you pay bonuses quarterly or annually, it’s not as real or immediate, and it becomes harder to motivate employees to achieve their goals.
Similarly, the bonus should be easy to calculate—ideally, in less than five minutes at the end of the month. If it requires a master’s degree in accounting to figure out, it won’t be believable by your team and they’ll never focus on it.
Manager bonuses should be tied to budgeted income from all sources, not specific items such as the number of new leases or truck rentals. If you offer a bonus based on a single service or item, this becomes the area in which the team will focus. Also, begin each month fresh. This keeps everyone focused on the same goals: all income from all sources to reach and exceed budget projections.
When structuring your bonus program, it should be:
- Specific: Target a specific area in which you’d like to see improvement.
- Measurable: Quantify or at least suggest an indicator of progress.
- Realistic: State what results can realistically be achieved given the available resources.
- Time-related: Specify when the result(s) should be achieved.
Staying on Target
My company has created a report to easily track each employee’s goals. The excel spreadsheet is called TARGETS, which stands for “Tracking and Reaching Goals Equals Total Success.” It takes a manager about 90 seconds or less to complete the form at the end of each day. The spreadsheet automatically calculates net gain, traffic-conversion ratios and box sales per lease. It includes a line for each day and automatically totals each column for a month-to-date cumulative number. Here’s how it works:
Each day, the manager checks his TARGETS workbook to see where he is for that month. He’ll look at move-ins, move-outs, delinquency, income, merchandise sales and traffic counts. This gives him a goal to meet in each category.
Once the store has hit the threshold of 90 percent of its budget for the month, the bonus amount appears at the top of the page. At the 90 percent mark, the manager will earn 90 percent of his bonus. That bonus grows as the manager increases income for the month, up to a maximum amount. This is a great incentive for sales as well as keeping delinquency in check. In addition, managers will feel they’re being rewarded and appreciated for their hard work each month.
The report is automated to turn from red to green once each category is within the company’s goal amount. The bonus pool for the team is right at the top of the page to keep everyone focused on the total. These amounts are budgeted and predetermined as to what percentage each manager will receive. For a large property, this could be divided among four or five managers. A small store might have one manager and a part-time or relief manager who earns 2.5 percent of the bonus for each day worked.
In addition to money, managers respond well to other types of incentives. For example, my company hosts an award ceremony at the beginning of the year. We get together for training, bonding, sharing and to see who “shined” over the previous year. Our “Annual Awards of Excellence Banquet” is an exciting event at which high-performing managers are recognized for their efforts with a plaque and $100. Awards are given in categories such as “Most Leases,” “Lowest Delinquents” and “Most Improvement.” Not only is this a great way for managers to be acknowledged for their hard work, it can inspire newer managers and offer them a mentor if they’re struggling in certain areas.
Whatever bonus and incentive program you employ, planning and goal-setting will be the heart of its success. It’s critical to your facility performance to recognize and reward your managers. Doing so will show your appreciation, keep employees happy, and ensure everyone is working toward the same goal—being the best storage operator in your market.
Anne Ballard is president of training, marketing and developmental services for Universal Storage Group and the founder of Universal Management Co. She's a former president and current board member of the Georgia Self Storage Association and has served on the national Self Storage Association’s board of directors. She’s also participated in the planning, design and operation of numerous storage facilities. For more information, call 770.801.1888; visit www.universalstoragegroup.com.