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Retaining Top Personnel ORIENTATION |
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 The Cost of Turnover Orientation Motivation Coaching and Mentoring Training Goal Setting Performance Assessment Resignation and Termination More Resources: Retaining Top Personnel Code of Ethics: Retaining Top Personnel |
"Your Policy Manual—Do You Have One?" by William T. Maloney Jr., Real Estate Today, February 1986, p. 30-31. Reproduced with permission of the copyright owner. Further reproduction or distribution without permission is prohibited. Your Policy Manual—Do You Have One? Whatever name you select—policy, reference, guideline, advisory—you, your company, and your salespeople need a manual. By William T. Maloney Jr. Jacksonville, Florida You may ask, “Why do I need a policy and guideline manual?” Perhaps you don’t if you intend to “go it alone.” As a one man-band, you needn’t be concerned about office and sales personnel. Set your personal goals and you’ll do fine. But those of you who soon will be staffing a brand-new office do need a manual. My own experience provides a couple of reasons. My real estate apprentice years were spent with a variety of companies—small, medium, and large. During that time, I was puzzled, often annoyed, by the time-consuming arguments that took place between certain salespeople and management. May would say she discovered the prospective seller at a church bazaar. John would pound the desk and claim he’d unearthed the prospect at his golf club. Then Joe would intervene and say he’d actually developed the seller’s interest during a poker game, but he’d be a good guy and split the commission three ways. See the confusion? Admittedly, one company I was with did provide an “Operations Guidebook”—a four-page mimeographed document that spelled out what the company expected in the way of sales performance. It designated floor hours and outlined commission rates based on a formula with 14 calculations that only the broker understood. And, like the weather, this company’s “Golden Rule” book was subject to change. During one of the many closed-door hassles between the broker and some salespeople, I resolved that if the opportunity ever arose to run my own business, the first thing I would do would be to create a policy manual. On becoming an owner-broker, I did just that. I read real estate books and listened to cassette tapes trying to formulate a guidebook that would meet my company’s needs. It was disappointing to learn that there was very little literature on the subject, and I soon realized I’d have to draw from those apprenticeship years. Fees and Commissions Probably the most important subjects for consideration in the policy manual are brokerage fees and sales commissions. If such information is clearly explained in your manual, you can eliminate time-consuming commission disbursement sessions. Special attention should be given to disbursements—an area that can make or break your retention of salespeople. Many former salespeople are brokers/owners today because no rewards or incentives were given to them as they began to show marked improvement in sales achievements. So develop a program that dangles a “golden carrot” yet provides the proverbial “cracking buggy whip.” Keep them by rewarding them. Don’t forget that they’re independent agents. While we’re on the subject of salesperson retention, I’d like to share some other thoughts with you. As a form of written policy, get salespeople involved in various aspects of your operation. Their involvement helps develop a company esprit de corps. For example, we find that getting the salespeople involved with recruiting is very successful. Our plan provides additional income to salespeople who help train, motivate, and retain good, qualified people. The program is based on a percentage override of the recruited salesperson’s dollar earnings. The individual responsible for the new recruit will advance in percentage override as the recruit becomes successful. Various platforms of sales performance are established for four levels of overrides. The plan encourages and inspires all salespeople to introduce career-minded individuals to the company and provides stabilized growth earnings to salespeople who are involved. Our vertical inventive plan (V.I.P.) has had an excellent response.* The Basics Setting “policy” is simply developing the principles on which any course of action is based and using good judgment in the management of one’s affairs with guidelines that lead or direct. Think of developing your manual in the same way you would write down your personal goals. You know all the small goals necessary to reach your major goal. The same thinking is applied in formulating policy and guidelines for your company manual. Standard Procedures Let’s look at some basic topics you should cover in the manual. Establish a set of rules on how the office is to be run. The subtopics might include business conduct and dress, keys and where they are located, procedures for long-distance calls, salesperson responsibilities for office hours, sales meetings, postage costs, office equipment and supplies, messages, items chargeable to salespeople, requirements for auto insurance, and referral fees. In other words, clearly state, in writing, a definite posture for the basic operations of the office. Support Staff You’ll probably hire a secretary or receptionist for the front office. You may also have a staff bookkeeper or accountant, an office manager, a sales trainer, or even a special “closing and contracts” person, depending on your company’s size and needs. Establishing policies for pay periods, paid holidays, sick leave, and the like provides a clear direction from the onset for your office support personnel. A special note: establish as a part of your office personnel policy a probation period—usually from three to six months—for hired staff. Each person hired should sign a form acknowledging that he understands that full employee status will be awarded only after the satisfactory probation period has been completed. In most states, the employee’s acknowledgement of probationary period relieves the employer from having to pay unemployment taxes to an ex-employee who leaves within a specified period. Each person also should be given a written job description so there are no misconceptions about the duties required. Advertising Strategy You may also want to produce some guidelines for your advertising philosophy. Media costs and information on placement are very important. This investment may or may not require the participation of salespeople. Many companies split costs in some areas and other ride herd on a fixed budget. Formulating advertising policy requires thinking about two distinct methods of advertising. First, there is direct, measurable advertising, and second, what I call institutional advertising. Because the latter in non-measurable, it is very difficult to determine the success or failure of the media used. Therefore, you must establish firm guidelines as to what, why, where, when, and how you spend your advertising dollar, or you’ll be “advertising poor.” Proceed in this area initially on a conservative, written basis. Remember, you are preparing an open statement as to how you will advertise, not defining a budget. Specifically, it’s advisable to establish guides as to how many classified ads will be placed in your local newspaper and on which days. This form of advertising can be measured successfully, and you can make policy revisions as needed. Your company yard signs—and who assumes responsibility once they are place on the property—also come under measurable advertising. As for the non-measurable (or institutional) advertising, be careful with statements in the manual about responsibility for payment. Let me offer a suggestion about “Just Listed” cards, “New Neighbor” cards, and other similar items that are used on an individual basis. The company can pay for the cards and let the salesperson pay the postage, or restrict the number of cards for which the company is responsible. Postage can become very expensive for this non-measurable advertising. Independent-Contractor Status Probably the most important element in your policy manual will be the “Independent-Contractor Agreement” accompanied by a “Statement of Acknowledgement.” Our profession is unique in that there are few, if any, hired salesperson employees. The people expected to produce profitable sales results are rewarded on a commission basis for their endeavors. Because the salespeople reflect the company, their activities must be conducted within the framework of the company’s business philosophy. Therefore, mutual promises and agreements should be spelled out in considerable detail. No single standard company/salesperson agreement can be used for such a wide variety of brokerage companies. Hence, a qualified real estate attorney should create an agreement particularly suited to your company’s individual requirements. However, be aware that the courts in some states are treating policy manuals as binding contracts between employer and employee; this issue should be discussed thoroughly and carefully with your legal counsel. Your Company Reference All the subjects contained in a good policy manual are obviously too numerous to cover within one magazine article—floor-time inquiries, listing procedure, sales incentives, personal conduct, multiple-listing services, office equipment, attorneys, insurance, vacations, sick leave, holidays, mortgages, contracts, advertising regulations, and so on. The most important message here is not what your manual includes but rather the importance of creating one. Having your company’s policies and procedures completely formulated in writing will simplify your day-to-day operation, improve morale, and in the long run, increase your profits. REALTOR Maloney is president of Riverside Realty Group, Inc. and co-author of Real Estate Broker’s Guidebook. *CAUTION: This additional income may create tax problems for the broker if the salespeople are statutory non-employees under the three-point TEFRA rules. Under the TEFRA, “substantially all” of the salesperson’s remuneration must be related to output—i.e. sales. The income from V.I.P. does not qualify because it would not, for most cases, be related to output. The status of a non-employee salesperson receiving such income could be jeopardized if, for example, his regular sales volume was low and the V.I.P. income was, in fact, a substantial portion of his income. "Your Policy Manual—Do You Have One?" by William T. Maloney Jr., Real Estate Today, February 1986, p. 30-31. Reproduced with permission of the copyright owner. Further reproduction or distribution without permission is prohibited. |
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