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Principals rewarding bad staff

26 June 2013 Stacey Moseley

Property managers are being rewarded for bad service by their principals, one leading small business professional has said.

According to Chris Rolls, managing director of Rental Express, the average property management remuneration scenario does not encourage great performance, but instead rewards bad service.

Speaking to a large number of principals at the PPM National Property Management Conference held on the Gold Coast last weekend, Mr Rolls compared the common property management pay structure to a child who completes their homework after school.

“When I was in primary school I’d come home and do my homework, and when I was done, I was rewarded and allowed outside to play with the other kids in my street,” he said.


“I had to show my work was done to the best of my ability and then I could play. I wasn’t just let outside no matter what I did with my homework.

“The current situation with pay from property managers breeds this idea that as long as you get some work done then that is fine, no matter what service you give.

“There is no incentive to work harder for the business.”

Mr Rolls suggested a way to combat this issue is for principals to consider paying their staff in, what he calls, a revenue split scenario. 

“In our office, the property managers each run a portfolio of about 120-150 properties,” he explained to the room.

“We determine how much their portfolio generates per year and give the property manager between 26 and 29 per cent of the revenue.”

According to Mr Rolls, after introducing this incentive two things will happen.

“Good property managers love it. Their pay will actually go up and for you, the principal, you won’t mind because they will be more likely to increase your business and drop the rate properties are walking out the back door,” he said.

“However, the bad property managers will complain because their income will go down. This is a great motivation for them to try harder.”

Mr Rolls warned that in order to implement the incentive scheme properly, it is best to trial it on a number of your top property managers.

“When the other property managers see how much better off they are on the incentive income scheme, they will want to be on it too,” he said.

Principals rewarding bad staff
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