This article details the incentive program for most General Managers (G.M.) of limited-service lodging properties managed by AHMC. The program is intended to motivate a G.M. by allowing a G.M. to share in the results of his or her efforts if certain criteria are met relating to his or her own performance and the financial results of his or her hotel.

Payment 

Payment for the incentive program is computed in the following manner, subject to the features described:

A. One half of one percent (0.5%) of Total Revenues in excess of ninety (90.0%) of Last Year's Total Revenues if one hundred percent(100%) of Last Year's Income Before management Fees and Fixed Charges is achieved. 

In no event is the amount paid for this item allowed to decrease the current year Income Before Management Fees and Fixed Charges to an amount less than the previous year's.

B. One percent (1.0%) of Income Before Management Fees and Fixed Charges in excess of ninety (90.0%) of Last Year's Income Before Management Fees and Fixed Charges up to one hundred and five (105.0%) of Last Year's Income Before Management Fees and Fixed Charges.

C. Two percent (2.0%) of Income Before Management Fees and Fixed Charges in excess of one hundred and five (105.0%) of Last Year's Income Before Management Fees and Fixed Charges.

D. An additional year-end bonus of ten percent (10.0%) of annual base salary is paid if the property's Income Before Management Fees and Fixed Charges exceeds the annual budget or the proforma used by the owner to finance the property, which ever is the higher goal (after deducting previously earned bonuses noted in A,B and C above) by ten percent (10.0%).

Features of the Program All of the following features apply to this program:

1. This is an annual program paid quarterly.

2. The maximum earned bonus is sixty percent (60.0%) of his or her year-to-date base salary.

3. The program's calculations are based on his or her Year-to-Date results and is paid quarterly on a separate paycheck less previous payments under the program about thirty days after statements are complete.

4. Twenty percent (20.0%) of each quarter's payments is withheld and used as described below or paid with the fourth quarter's payment.

5. If the program's calculations in any quarter result in a negative payment the previously mentioned withholding is applied against it. No participant in the program is required to pay back an amount greater than the sum of the year's withholding.

6. Newly assigned General Managers are eligible to participate as of their third complete month at the property.

7. Calculations and payments are not made on sales unless one hundred percent (100.0%). Last Year's Income Before Management Fees and Fixed Charges is achieved.

8. General Managers who leave the company for reasons imputable to themselves are not entitled to any payments or withholdings due them under this incentive program.

9. In cases where termination is not related to any action or lace of action by the General Manager, he/she is entitled to the bonus earned through the prior quarter and the balance remaining in the previously withheld funds.

10. In cases where the General Manager resigns voluntarily, gives four weeks notice, performs the turnover in a professional manner and the hotel's operating results are maintained during the period of notice, he/she is entitled to the incentive program through the month in which he/she departs. Payment, however, will not be made until two full monthly accounting cycles are completed.

11. The year-end bonus of ten percent (10.0%) of base salary previously mentioned will only be awarded if the General manager has been at the hotel more than nine months.. All calculations are made on a pro rate basis based on the time at that property.

12. An anomaly or extraordinary event might occur which might affect this program in a negative or positive manner. In all cases, the President of the company reserves the right to adjust the program or an individual's results so that the program is fair to both the General Manager and the hotel. Any such adjustments are at the sole discretion of the President and are not subject to any appeal outside the company.

13. This program may be discontinued at any time by the company without reason and further payments and as a result of such discontinuance no retroactive or further liability shall exist to any current or previous participant or their heirs and/or successors.

14. By accepting this program and remaining in the employment of the hotel the participants acknowledge and accept the features of this incentive program.

The incentive program has the components necessary to motivate General Managers to generate revenue and control expenses. However, this magazine, the author and his company are not recommending this program for the reader's use nor are they intending to set industry standards or certify as to the legality of the policies outlines in this article. Prior to adapting this program to a specific hotel it is suggested that the formulas and percentages be tested and adjusted for the unique circumstances of a particular hotel.