Building a Bonus Program to Entice, Incentivize and Reward Your Self-Storage Managers

Quality managers are essential to every self-storage operation, and enticing them to work for you can be accomplished in several ways. Employees are attracted to high wages, good benefits, an inspiring company culture and more. In our industry, however, a great bonus program can play a key role.

There’s really no bad way to offer your team income beyond their regular paycheck, but some bonus plans can yield a more positive result for individual team members and the company as a whole. What you need is a program that’ll encourage employees to perform their absolute best. Sometimes it’ll take a few attempts before you find one that’s right for your specific operation. Following is some insight from strategies that have worked well for my company.

Cost vs. Benefit

While it might seem like you’re losing money when you pay your self-storage team a bonus, the many benefits outweigh the cost. Put simply, bonuses motivate staff. Employees benefit because it puts more money in their pocket, which makes them feel rewarded for their hard work. It allows them to feel like they’re truly part of the team, and they take on an ownership attitude.

As a result, your staff will work harder and stay in the job longer. The facility they manage will experience higher occupancy and ancillary sales and lower delinquency. A bonus plan also discourages them from offering rental discounts, waiving late fees and giving away inventory, which can only improve your revenue.

Offering a bonus can also aid in recruitment. Finding quality employees is a huge challenge these days; plus, turnover is expensive. For both reasons, it’s vital to offer an enticing compensation package. Bonuses should play just as important a role as salary, paid-time off, health insurance and any other benefits you offer.

Building Your Program

What does a fair bonus program look like in the self-storage industry? First, it must be realistic. The most frustrating thing you can do to your team is set goals thar are impossible or take too long to achieve. Bonuses must be attainable.

Some self-storage owners offer a payout for every new lease or base their program on net unit rentals, but this can be very inconsistent. Besides, it’s the manager’s job to rent units, period. At my company, we’ve found that paying a percentage of total monthly revenue is not only fair, it rewards managers for all aspects of the job. They benefit by collecting rent, miscellaneous income, auction proceeds, and fees such as those for lateness, paper invoicing, 24-hour access, etc.

Our incentive is paid on a sliding scale based on economic occupancy. Essentially, it’s set up like profit sharing. Taxes are taken off the top, and ancillaries and tenant insurance aren’t included. Instead, we pay commission on all point-of-sale items and tenant-insurance premiums.

Timing is also important. We’ve found that monthly bonuses are the most effective. Quarterly and yearly bonuses may seem out of reach and managers might lose sight of their goals. That doesn’t mean you should rule them out entirely. A year-end perk is always a great surprise for employees and a nice way to say “thank you” for a job well done.

Here are few more things to keep in mind:

Missing the Target

There will be times when your self-storage managers don’t reach their goals or receive a bonus. Every facility has bad months. To keep them from feeling discouraged, urge them to look at year-over-year numbers and pay attention to their trends. For example, August is typically slow because the kids go back to school; but rentals are generally up in January when customers make good on New Year’s resolutions. Tax returns often lead to rental spikes in February and March. Focusing on this big picture can help your team stay motivated.

We also ask our managers to share their ideas on how to improve the operation and generate more revenue. Do we need to run a special on a particular unit size? Do we need to make property upgrades? Our staff is extremely knowledgeable about their properties. We listen and respond so we can help them reach their goals.

There are many ways to inspire self-storage managers, and bonuses are a great way to do it. Involve and listen to them and their ideas. Share your business goals with them along with the facility’s expenses. Most only look at the revenue side, but they should also know about the costs of operation. Seeing the whole picture and their role within it will encourage them to work harder. All of us want to feel appreciated for our work. If you have a fantastic staff, reward them!

Stephanie Tharpe is the president of A+ Management Group LP, overseeing facilities in Florida, Georgia and Tennessee. She’s also a partner and senior vice president of operations for A+ Storage of TN LLC. Since 2013, she has served as president, vice president and chair of events and education on the board of directors for the Tennessee Self Storage Association, which named her “Manager of the Year” in 2012. Stephanie is also a presenter at industry shows, and a moderator for Self-Storage Talk, the industry’s largest online community. To reach her, call 615.288.2162 or email [email protected].