Whether you are an employer or a candidate, you may have recruitment or human resources questions you need answered by an expert!
This month, we welcome well–known industry authorities, Fiona Blayney and Melissa Karatjas, to the experts ‘chair’.
Whether you are an employer or a candidate, you may have recruitment or human resources questions you need answered by an expert! This month, we welcome well–known industry authorities, Fiona Blayney and Melissa Karatjas, to the experts ‘chair’. You can email your questions to editor@sold–magazine.com.au and Fiona & Melissa will respond to them next issue.
In recent times, there has been a great deal of discussion in the industry about salaries, performance bonuses and equity options; so we asked Fiona to give her thoughts on the ‘hot topic’ of incentivising staff for optimal performance. And it just happens to be a topic that Fiona is very passionate about!
How do we create incentive programmes that actually incentivise our team?
Let’s get right back to basics, what is an incentive scheme? Incentive schemes have been in existence with businesses around the globe, almost since the dawn of time in some form or another. Whether it was the shearer, completing his quota of sheep for the day with the incentive to finish earlier, or the CEO of a major bank receiving “bonuses” based on profit, in one way or another “incentives” have been in place for 100’s of years. A key challenge for many businesses is “what do we incentivise people for?’ Real estate is no different. It is actually easier than we think; you should incentivise people in a way that gets them to focus on particular goals. If we take a moment to consider the sales team, we have in effect been doing this for years. A sales agent typically gets paid on listings and sales. We do this as we want a sales agent to focus on these two key tasks – list and sell. List more, sell more, earn more. Not a difficult formula!
In other areas of real estate, business owners have struggled with how to structure incentives and in many cases, complicating the matter, by incentivising people for a vision rather than a task. Here are the 5 steps to getting it right.
Step 1– Focus
List all of the tasks that you would ideally like your team member to focus on. This is generally not the full job description; but perhaps 3, 5, 7 things you would like the team member to keep as ‘non negotiable’ for their function.
Step 2 – Measurement
To what level are you expecting the individual to perform? These must be clearly measurable, without any grey areas. Measurement must be tangible and not open for interpretation.
Step 3 – Payment
How much do we pay? Consider what you would be prepared to pay the individual if they were to meet your expectations in all areas of measurement? What would that be worth to you? From here calculate this back on a monthly basis, and a per measurement basis.
Businesses will provide both financial and nonfinancial rewards. Non financial rewards can include training, gifts or experiences; and may be presented to a team or an individual.
It is essential to remember, that an incentive must actually be enticing, so be sure not to table a figure that may seem OK on a yearly basis, but on a monthly or individual measurement, just insulting (that would have the opposite effect).
Step – 4 Language
In the context of real estate, be that Administration, Sales or Property Management, we encounter varying types of incentives, these can be financial and non financial, and we hear terms being used such as; bonus, KPI payment, incentive, our preference is – performance payment.
Why a performance payment? “Performance Payments”, as a concept, clearly spell out by virtue of the name alone what they are, they are payments for your performance. In short, perform and get paid, don’t perform don’t get paid!
Step 5 – Performance
If you already have everything in place up until Step 4, and do not know where you are going wrong, here may be the light bulb moment. Where businesses are paying via performance, there is a performance management plan. The business monitors performance in the key focus areas throughout the month, working on improvement, and calculating results at the end of the period. So here is the big secret… payment is only made when someone performs to the measurable standards.
The incentive schemes of old, have become an expected part of salary structures in many offices, thus losing the purpose for which they were intended. If you are finding this to be the case in your business, it is time to refocus yourself and your team, and start paying on performance.