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November 9, 2007

5 Min Read
Staff Compensation

A topic that frequently comes up in conversations with self-storage owners and operators is staff compensation and incentive programs. Everyone is looking for the norm in these areas, but it seems as though there isnt one. Compensation ranges from sparse to extravagant and everything in between. Labor is one of the biggest expenses there is in the storage industry, so its worthy of careful consideration in your operating plan. Below are some things to think about.


Who is operating your multi-million dollar investment? While controlling labor dollars is critical, you should budget for the quality of employee you want to represent your business. Im a firm believer that you should pay well and set expectations high for your staff. Offer a salary that allows for a decent standard of living. If your employees are always in financial dire straits because they are not making enough money to live, then they are not going to focus on your success. Get to know your employees and find out what motivates them.


Use enticements to get staff to go the extra mile. Incentive plans, contests and bonuses are all helpful when attempting to reach specific site goals.

Make the incentive match the level of the objective. A goal should be challenging but attainable with extra effort on the part of staff. Remember, you are already paying employees for the standard daily work; your bonus or incentive plan should reward them for additional site success. A bonus or incentive tied to everyday results is just paying more for the same job and will come to be expected. On the other hand, staff wont even try if they think a goal is completely out of reach.


Be creative in your compensation package. While cash is king, the chance to win trips or fabulous prizes always stimulates excitement. Find out what your staff is into and make the rewards fit them.

Are they into NASCAR, football or the symphony? Tickets to local events are always a hit. Electronics, gadgets and gizmos like mp3 players motivate some people. Even a short one- or two-night getaway to a nice local resort, or a day at the spa or local theme park make for a nice diversion. You can also tie the reward to an educational event like an industry tradeshow, conference or seminar.


Buy employees the skills they need. If a manager has nine out of 10 of the skills you want, its easy to get him up to speed on the area in which his is weak. Foot the bill for a computer class or marketing seminar to show you believe in his abilities and are willing to invest in his professional knowledge. Require that he take notes and report back to you on what he learned. This will help refresh his experience, solidify what he learned, and encourage him to share new or revitalized ideas with you. It will also make him better at operating your facility.

Fiscal Perks

Encourage personal financial responsibility in your staff. Offer a 401k plan or other savings opportunities to help employees take control of their economic future. Invite an investment professional in to talk with them and assist with starting a retirement or savings plan. If youre awarding a holiday or other merit-based bonus, consider giving part as a contribution to their IRA or savings account.

Employee Honesty

Are your employees compensating themselves? Be aware of staff that may be having financial issues. Keep an ear to the ground when it comes to personal money-related situations.

The reality is storage is a cash business, and staff usually has fairly open access to funds. Its easy for a good employee to get into a predicament by thinking he can use your money to solve his troubles. If you hear the grumbling of difficulty, try to approach it head on.

Key cautionary flags include:

  • Divorce or family problems 

  • Medical issues 

  • Purchases inconsistent with income 

  • Unusual behavior or changes in quality of work 

  • People hanging out at the site during work hours 

  • Changes in credits, fee waives or discounts, specifically for cash transactions 

A thorough and regular auditing program will go a long way toward keeping people honest. Good managers like to be audited because it validates the high-quality work they are doing.

Annual Merit Increases

Make annual performance reviews a part of your business. While not all owners enjoy taking the time to complete a well-thought-out, written evaluation of employees, the team deserves it. Do it within 30 days of an employees anniversary date, and be honest. If youre managing people correctly, the annual review will not hold any surprises. Spend enough time thinking about each evaluation and staff member to give a thorough and heartfelt appraisal.

Be sincere, and try to offer more positives than negatives. Outline strengths and weaknesses and set goals. Let the dialogue be two-sidedthis is a chance for a true conversation for the benefit of your business. A good annual review will help realign the staff. In addition, most people expect an increase in pay at this time, so decide what you intend in that regard beforehand.

Take time to think about and plan for one of the largest expenses you will have in operating your facility. Understand what will get you the most bang for your buck and the highest success for your facility and staff. 

Linnea Appleby is president of PDQ Management Solutions Inc., a Sarasota, Fla.-based company that provides full-service facility management, consulting, start-up services, auditing, management training and more. For information, call 941.377.3151; visit www.pdqmanagementsolutions.com

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