The Morale of the Real Estate Sales Associate in the Current Economy - Essay Example

Lewis Real Running head: JOB REDESIGN/ WORKPLACE REWARDS ASSESSMENT Lewis Real E Investment Consultant Management Assessing the Moraleof the Real Estate Sales Associate in the Current Economy Name of Client Name of University Name of Class Lewis Real 2 Lewis Real Estate Investment Consultant Management : Assessing the Morale of the Real Estate Sales Associate in the Current Economy The current economy is creating a problem within the world of the real estate business that is causing issues with those who make their living in sales. However, there is still a need for those who perform this service despite the low level of current sales. While a great number of real estate agents are jumping ship, others are sticking it out with agencies and attempting to ride out the storm that has been created from the severe slow-down of the housing economy. However, with some ingenuity and some shuffling of focus and responsibilities, those who choose to remain in the business can find alternative avenues on which to remain a real estate agent. The current economy has changed the way in which real estate agents conduct their business. No longer is the route easy to get to a sale. The 2006 survey of occupations developed by the United States indicates that the number of real estate agents operating in the country were approximately 430,000. In approaching the sale of a piece of property, the real estate agent acts as the party who assumes the responsibility of acting between the buyer and the seller in order to facilitate the sale. While most often the agent will be acting with the best interest of the seller, occasionally the agent acts as a buyers agent in order to ensure that the price is the lowest possible and that the buyer has received the best possible deal. When acting for the seller, the agent will market the property and ensure that all the issues that are involved in the sale are appropriately handled. In this economy, the agent now faces difficulties from most aspects of the sale. Finding people who wish to sell their home is not an issue, but finding buyers has become a challenge. Lewis Real 3 As people are losing their jobs, creating a less than viable population who can afford to buy a house, selling a house is a difficult process. According to Hubble Smith (2009), the way in which the banking industry has begun to drag its feet when making approvals on loans is causing further difficulties for people who have the means and the opportunity to take advantage of the buyer’s market. With these various difficulties in play for the real estate agents and brokers across the United States, the motivation to continue as an agent is becoming difficult to maintain as a lack of sales lowers income and creates economic disasters for these professionals. The job of a real estate agent provides a great deal of opportunity for self-management. The agent is responsible first to themselves as they are in control of the way in which their sales can be promoted and accomplished. The agent will not make money if self-management of their responsibilities is not attended. Rarely is the job a matter of dictated responsibilities from a superior, but rather a series of choices made by the agent that either will or will not successfully accomplish the goals of the sale and of the sellers. Intrinsic motivation is created when “a prompt to action that comes from within the individual and is not prompted by outside influence” (Christianson, Baum, and Basshaugen, 2005, p. 595) is used in the performance of the duties required within the occupation. The motivation of the agent is designed to be intrinsic as the goals of the agent to make money is developed through the personal need to survive within the industry. An agent is motivated by personal needs to meet goals and to succeed, otherwise that agent is not found successful within the agency and will most likely be released. The agency desires its agents to be successful, however, it is well known that the competitive nature of the industry will always allow for the next person to come along and succeed where the last one has failed. Lewis Real 4 Bonus programs and reward incentives are one of the ways in which an agency will support the agent in his or her goals. The initial way in which an agent gets paid is in the commission split that is determined by the office in regard to how much the agent will receive and how much the agency will receive. In a poor economy, the agency may have to alter its commission program. However, the way in which commission is most often determined is based on the performance of the individual agent. The split will be determined on the basis of a 50/50 split, which may increase for the agent should the agent excel in sales (Real Estate, 2004, p. 161). The ability to offer agent an attractive incentive in the split will encourage the agent to work for the agency. However, if the agency does not have a stable base of operating capital, then the services that the agent needs to facilitate their work will not be provided. There are other ways in which an agency may provide incentives to an agent. Profit sharing, for example, is one such incentive that can provide an opportunity for the company to participate in the creation of a retirement plan for the agent. However, the use of bonus programs creates a problem for both the agent and the agency. As the agency finds itself affected by the economy, sometimes the commission split must be adjusted to accommodate the operational costs. When this happens, as is being experienced in agencies across the United States, a bonus plan that is designed to create incentives that can boost the commissions that are being earned will be put into practice. This can cause difficulties when the economy does not support the achievement of those goals. The commission on the meager sales are reduced and the agent has a difficult time in obtaining their own personal goals, let alone those of the agency. While an advantage of this can be to begin the process of weeding out the less productive agents, it can also lead to good agents jumping ship. Lewis Real 5 Goals within the company are intended to keep the agents on target with the sales needs of the agency and to push the agents toward meeting higher levels of sales. The intent of the goals are to create a system that is just within reach so that agents are not easily meeting the goals and are encouraged to work harder to meet those goals. These desired achievements can be very successful in giving competitive sales associates a level of excellence in which to aspire. However, as the economy has taken its toll on sales, morale has been affected and many agents have begun to seek other opportunities. For the agents who remain, financial incentives are more limited because of the lower level of sales that are possible. Therefore, it is important for the agency to become more creative in creating sales incentives that can be used in place of financial incentives so that good producers can benefit even when the economy creates a decline in revenue. A real estate office should have made contacts and relationships with a great number of other industries. Therefore, a barter system of services and goods could be established so that agents can find additional compensation even when the economy has limited the way in which commission can be achieved. Creating opportunities for agents to take advantage of negotiated perks could provide the incentive that is needed for an agency to continue operating until the crunch has subsided. Gym memberships, hotel stays, spa services, travel opportunities, discounts on large ticket items such as cars, and other incentives can be negotiated by the management staff so that the employee who can navigate the lowered income can have other reasons to wait out the crunch. As the economy hits the bank accounts of all levels of income, even basic needs like food and gas can be found to have value as an incentive. Gift cards and arrangements can be made with businesses based on relationships and tradable services, whether it be marketing for the Lewis Real 6 businesses within the homes that are for sale, or other considerations that would have tradable value. Creating a staff that feels appreciated, that understands how the economy has affected the way in which the economy has impacted the operations of the business, and giving rewards as liberally as is feasible, will all support the needs of the company. Keeping a positive flow of information so that poor assumptions do not cloud the issues at hand will provide a source of control and managed morale for the business. According to Scabelund (2005), when an employee understand the Big Picture for the company and understands how their performance impacts the bottom line, an understanding and a trust can be developed between the agent and the agency that can promote loyalty (p. 9). A sense of purpose can be a fulfilling experience when the agent feels that their efforts not only support themselves, but support the efforts of the company to stay afloat. Most often, real estate agents will be found to have a specific personality that relates to the competition of sales. During the first part of the twentieth century, buying shifted from the model of the consumer representing the rational decision maker to the model that the consumer is “an irrational, emotional buyer buffeted by inchoate desires, instincts and impulses” (Brown, 2008, p. 63). The sales person has had to become the purveyor of fulfillment that can motivate an individual to buy based, not only on sound decisions, but on the emotional needs that the purchase will solve for the buyer. A sales person needs to know how to play on the real and the imagined world of the buyer in order to create a connection between the buyer and the product, or in the case of real estate, the property. Problems that are not rationally solved through the purchase can be associated for they buyer so that he or she may feel that those problems will be Lewis Real 7 solved. In this way, the agent must be a master of psychological manipulation to motivate the buyer. The agents that are most successful at this manipulation fall into Barbara Moses’ (2000) category of independent thinkers or entrepreneurs as they run their position as an independent business that is contracted to the agency. This makes building loyalty through incentives that are not strictly financial a difficult prospect. However, through the use of honesty in revealing the state of affairs for the company, and in creating a loyalty that is mutual as the company provides for the agent a sense that they will be taken care of when the market turns in their favor, finding alternative sources of rewards and encouragements will bring about positive changes within the business. The real estate market has suffered greatly as the economy has dropped into a recession and is in danger of falling into a depression. The agents who can ride out the storm will be agitated and worried, while many others will simply fall out of the ranks. Creating a positive growth illusion for the employees will help to support survival as emotional reactions to poor performances by either the agency or the agent can be handled with a sense of calm and work towards recovery. As things must fall to the side in order to support core needs, the agency must consider the way in which the effects of the diminished nature of the business will affect morale. In order to support good performers during the fallout of the crisis while supporting the needs of the operational budget of the agency, good choices that have a sense that all will benefit eventually if loyalty remains, while providing alternative rewards that are developed through relationships with other businesses, will promote good will and help promote survival of the company. Lewis Real 8 References Brown, E. H. (2008). The corporate eye: Photography and the rationalization of American commercial culture, 1884-1929. Studies in industry and society. Baltimore: Johns Hopkins University Press. Christiansen, C., Baum, C. M., & Bass-Haugen, J. (2005). Occupational therapy: Performance, participation, and well-being. Thorofare, NJ: Slack. Moses, B. (November, 2000). 6 degrees of motivation. Black Enterprise. 31(4), pp. 155. Real Estate Brokerage Managers Council (Chicago, Ill.). (2004). Real estate office management. Chicago: Council of Real Estate Brokerage Managers. Scabelund, J. (November, 2005). “I just work here”: Creating a front line that improves your bottom line. The Monthly Newsletter for America’s Health Care Financial Managers. Aspen Publishers, Inc. Smith, H. (11 May 2009). Are banks making short sales a long process?. Rismedia: The leader in real estate information systems. Retrieved on 11 May 2009 from http://rismedia.com/2009-05-10/are-banks-making-short-sales-a-long-process/#more- 36223 United States. (2006). Occupational outlook handbook 2006-2007. New York: McGraw-Hill. Read More