Employee Incentives In Gym Management

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  • Employee Incentives In Gym Management

There are so many things that have to work together to make any business successful. But if the employees can work together as a self-supporting team you are winning the most difficult part of the battle. Any business that works with memberships and requires selling and customer service needs a tightly knit team that’s stronger than the sum of its individual parts.

In gym management for the independent gym owner there are a specific set of concerns because of issues like staff turnover and the need for sales by staff to current members. In this post I’d like to talk about how gym business owners can use profit sharing as a financial motivator that keeps teams working together and happy.

If you have fitness trainers on staff you are probably used to apportioning commissions that help to top up your membership and round out staff salaries. The drawback of individual incentives and bonus schemes is that they can create an overly competitive environment if they aren’t balanced with more team-oriented remuneration. One powerful way to balance that out and create better team dynamics is through a profit sharing scheme.

Profit Sharing For Gym Managers

Profit sharing is the bonus system that is based on collective performance. It’s a great help to small and growing businesses because it reminds the staff that they are part of a team. The cohesiveness of your team can be tested during those high-pressure times when you most need the business to work smoothly, at the peak times of the year or when you have launched a new service or location.

The entire concept of profit sharing relies on one extremely obvious premise: You have to actually be making a profit for it to be shared. It’s a chicken and egg sort of thing; you have to get going before you can start. There’s no point in announcing a profit sharing scheme and then saying that it might take some years to appear. However, if you have good and bad years the addition of a profit sharing structure for your employees might just make the difference between surging ahead and struggling by.

Everything that reinforces the connection to the team is good for the business and a balance between individual recognition and collective validation can go a long way. If you have a holistic approach to staff development you can encourage a sense of value for personally striving for excellence in the short term and long term as well as to value the team for the big picture of creating success.Profit Sharing

Profit Sharing For Vested Team Building

You will have to decide who will be eligible to vest in the program. The rules should be clear and in writing. The U.S. Department of Labor has a comprehensive fact page regarding the basics of what you need to operate a profit sharing scheme. Setting up and administering such a scheme is difficult enough that you will need to speak with your legal and financial advisor, to make sure that you get it right.

The fairest approach is to award shares in proportion to pay level and to prorate for partial periods of participation. This helps smooth operation and prevents massive bailouts after year’s end. With the high level of turnover that we experience in this industry, the last thing you need is a structure that sends all of your staff out the door at the same time. Even worse, if year’s end coincides with the busy season, you could have them cashing out right when you need them most. So prorating makes business sense in the long run.

In Summary

What is a fitness business, if not a team? I can’t overstate the importance of creating that sense of connection to the team and the satisfaction of having team victories. The gym business has a notoriously high turnover rate and it might seem counter intuitive to prorate bonuses and allow accessibility. It’s the same as the attitude of allowing members comfort when they decide to terminate memberships; if it’s a positive experience then those who leave will be more inclined to promote you and possibly return, those who remain have one less reason to be weary. Providing employee incentives like profit sharing are a great way to lead and nurture your team. Spreading positive sentiment, as any fitness professional should know, adds muscle to your team.

Bibliography

Fagan, Lawrence. Building The Team That Sells Effectively. February 24, 2014. https://blog.gyminsight.com/2450-building-the-team-that-sells-effectively/ (accessed December 20, 2014).

Spolsky, Joel. Fog Creek Compensation. August 30, 2000. http://www.joelonsoftware.com/articles/fog0000000038.html (accessed February 19, 2015).

US Department of Labor. Profit Sharing Plans for Small Businesses. http://www.dol.gov/ebsa/publications/profitsharing.html (accessed February 19, 2015).

Vanden Bos, Peter. How to Build a Profit Sharing Plan. April 19, 2010. http://www.inc.com/guides/2010/04/profit-sharing-plan.html (accessed February 19, 2015).

2 Comments

Kru Strength + Fitness
July 3, 2015 / Reply

We’ve been considering something like this at our gym, but it seems like it would return very little, be a headache to keep track of, and add to the frustrations of our trainers. Do you have proof that profit-sharing really works?

Tom Carter
October 6, 2015 / Reply

I hate this concept. My owner decided to pay me like this on top of a salary. The problem is we don’t project profit for another 98 months. It was a newly taken over to try to turn it around from a previous bad owner. So I feel like I am the lowest paid GM in the world.


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