Industrywide, most executives’ incentives were tied to corporate performance (41.1 percent), while most on-site property managers and maintenance staff were rated on business unit performance (60.9 percent and 61.5 percent, respectively). Leasing staff were most frequently offered incentives tied to their individual performances (51.8 percent).
Along with such incentives, a strong benefits package can help retain valuable employees. Though such plans vary widely across the industry, certain benefits, such as health care, must be offered by a company in order to be competitive in the marketplace.
“Health care is still a very important benefit because it’s getting so expensive for individuals,” says Carlisle’s Barerra. More than three-quarters (78.6 percent) of companies surveyed used the preferred provider organization model, and 44.3 chose the health maintenance organization or EPO model. The top benefits offered by the majority of companies are medical, dental, 401(k) and profit sharing, life and disability insurance, and paid vacation and sick leave.
She adds that there’s an increased interest in retirement plans, even among younger employees. “People are more sophisticated now, and employees right out of college are planning for retirement.”
At Berkshire, for example, new employees are enrolled in the plan 30 days after starting work, rather than 60 to 90 days. And there’s a safe harbor plan, which only 10 percent of companies surveyed offer. “We consider our 401(k) plan a draw,” Stravinski says. “And that’s important to us since we’re in acquisition mode.”
THE BOTTOM LINE The annual survey provides valuable information for human resources executives as the multifamily industry continues to grow and become more competitive with other sectors of the economy. “I give high praise to this survey,” Stravinski says. “It’s very comprehensive and detailed, providing information in a way that’s actionable.”
Margot Carmichael Lester is a freelance writer in Carrboro, N.C.
C-LEVEL SALARIES
Performance-based pay yields increases for higher-ups.
It was a good year for COOs and top property management executives, who experienced the largest increases in median total compensation, according to the 2007 National Apartment Survey on Corporate/Regional Positions, sponsored by NMHC and developed by Watson Wyatt Data Services.
Much of the compensation increases reflect the move toward performance-based pay, according to John Challenger, CEO of the global outplacement firm Challenger, Gray & Christmas in Chicago. “We continue to make C-level officers more accountable. The big options [that] executives were given a decade ago was an attempt, but they weren’t tied to an index or peer companies and competitors. Now many companies use an increasingly complex set of indicators to rule out factors that don’t really measure an executive’s performance.”
Aligning pay with performance is key in the increasingly competitive multifamily industry. “If you want to be successful as an organization and continue to employ good people, you better perform as an organization,” asserts Daniel Stravinski, senior vice president of human resources for Boston-based Berkshire Property Advisors. “To attract and retain the best people, you’ve got to offer the growth that goes along with being a high-performance organization, but also [the] rewards.”
Fun Factor
Lane Co. implements a new metric. Atlanta-based Lane Co., a multifamily developer and manager, has added a new criterion to its performance evaluations: fun. “If you have passion and enjoy what you’re doing, you’re probably having fun,” says Bill Garrett, Lane’s vice president of associate services.
The company added the metric as part of a plan to align its values (service, integrity, teamwork, respect, financial responsibility, and fun) with its performance evaluations. “If it’s important enough to include as one of the company’s values, it’s important to evaluate,” Garrett says.
The company measures the fun factor, which went into effect in July, through two main outlets: passion and entrepreneurial spirit. The former is evaluated on how much the employee enjoys the work and whether he exhibits a pleasant demeanor on the job and shows desire for success. The latter is based on whether the employee exhibits behavior consistent with the mission, vision, and values of the company and makes the work environment enjoyable.
But it’s not all fun and games. The new metric provides a serious measurement. “This lets associates evaluate whether they are doing something that’s right for them,” Garrett says. “The performance evaluation also tells employers if they have the right people in the right positions, and whether they have the passion for the job.”